- An estimated 92% of SaaS companies fail within three years despite
initial growth and funding. Now, if you watch this channel, you've downloaded my five
point strategy guide, we all know this stat
and it's not inspiring, it's not inspiring to me. But here is what is inspiring. That means eight percent
of startups do well and SaaS is an incredible business model, an incredible category. It's more exciting than ever with AI. So it's worth going after being one of those eight
percent of companies that do incredibly well. But here's a big question. What are the companies that
fail, those 92% of companies? What are they doing wrong? But more importantly,
what are the eight percent that's doing it well? What are they doing right? So I asked myself the question, what are the top three things
that SaaS founders do wrong? What are the things that I did wrong when I was starting my
own SaaS businesses? So in this episode, I'm
gonna walk you through the three biggest mistakes that I see SaaS founders
make consistently. I made these mistakes, maybe TK did and founders I work with. Today I work with over 250 SaaS founders and I serve all the
founders in this channel, we're at over 43,000 subscribers now. I see these mistakes
over and over and over. I'm gonna distill it down to
the three biggest mistakes that I see that are connected
to this 92% failure rate. And what I'm gonna walk you through is what those three things are and how you can do the
opposite to actually win. And when you know about these
three most common mistakes, and you do the opposite, you will be able to accelerate your path to that next stage of growth. Intro. (upbeat music) What's up, everybody? Welcome to Unstoppable. I'm TK, and on this channel, help SaaS founders like you
grow your SaaS business faster with an unstoppable strategy. Now, if you are new to
this channel, welcome. I drop an episode every single Sunday with actionable strategies
and tactics from the trenches on how to grow your SaaS business faster. So be sure to hit that subscribe
button and that bell icon. You'll get notified every
single time I drop an episode with the TK Energy. Now, if you're already
part of this community, this fasts growing... It's going so fast, it's insane, and I'm very grateful for it. If you're part of my SaaS, go
to market coaching programs, my people, welcome back, it's really awesome to see you over here. So my last SaaS business, (indistinct), that was technically my second SaaS idea, my first one completely failed. And the reason (indistinct)
started to work, especially so quickly, is because I made these
two first mistakes, the two biggest mistakes that
I'm gonna be highlighting. I made them myself and
then I learned from it. But then (indistinct) started to grow. We raised funding, we were
backed by Andreessen Horowitz and then I made this third mistake, which I see founders make
all the time as well. So I'm gonna cover that. Eventually, we scaled (indistinct), we sold it to a company called Marketo, and then I worked at Marketo
and I saw these three mistakes across the board with
other SaaS companies. And now fast forward with this channel, I've worked with over 250 SaaS companies. I serve over 43,000
subscribers on this channel. So I see these three
mistakes over and over. So given my experience
across 15 years in SaaS, I'm gonna walk you through
the three biggest reasons startup companies and SaaS companies fail and how you can do the opposite to make sure that you succeed. So if you're excited to dig
into mistake number one, go and smash that like button for the YouTube algorithm,
it really likes it, and let's dig right into it. So the first mistake
that I see founders make that baby TK made even, is to fall into what we call
the one more feature trap. I see a lot of founders,
in fact I meet them, my team meets with them, they come in different inflection points, but they're like pre-revenue. They have a product built, but nothing's working,
there's no pipeline, there's no conversion,
there's no revenues. And they're like, no, no, no, no, no, we don't need to work on go-to-market, we're not ready to launch yet, we're gonna go build
this one more feature. So I see that all the time and I call it the one more feature trap because every founder thinks that they're just this one feature away from everyone lining up
and saying, oh my God, this is the best product ever. Please take my money. It never happens. And what they do is they avoid actually building out their
go-to-market strategy, their go-to-market machine and getting into customer conversation so that they can actually figure out what's missing in the product. They kind of stay within
their comfort zone. And what also happens, this
gets even worse at later stages when I see SaaS companies
that were doing well and all of a sudden they stop, the conversion's not there,
the pipeline's not there, the market dynamic shift, and they're like, oh, we've got to build
these five features, and they keep building those features and nothing fixes itself and
they go back into that trap. And what ends up happening with the one more feature trap is, A, they just never go do
the work that's necessary. They avoid go to market, but B, because they keep
adding more features, this is the worst part of this, they keep adding more features, the product becomes more complex, the way they try to sell the product becomes even more complex
and customers just are like, I don't know what you're
selling, this ain't it. I don't need it. And they fall into this perpetual cycle of never being able to escape it, and they have a monstrosity of a product with burn going up and
no revenues coming in. In case you are feeling this, don't worry, I made the same mistake. Smash that like button if you are with me, just so I know I'm not the only one. I know I'm not. But also the reason I get
so passionate about this is oh my God, from my perspective, having gone through it and like lived it, and then when I talk to people, it's like it drives me
nuts because I'm like, oh my God, this is so
painful, this is so painful. How do I get you to realize you were in the one more feature trap? And a lot of times I do
talk to founders like, oh my God, we were in
the one more feature trap when I saw on you videos,
I knew it right away. So the reason I get so
impassioned about this is because I see it and
I know how much it sucks to be in that one more feature trap. Because it's not like you're dumb. It's not like founders
are dumb or I'm dumb. It's that that's our comfort zone. We know we can always build
that one more feature. And you do that GitHub check-in
and you launch that feature. Like it's within your wheelhouse and so you just keep doing it because it's in your comfort zone. Whereas doing all the
stuff around go to market, talking to strangers, them saying no, sending emails, running ads, like all those things are not in the natural founder's wheelhouse. So we just don't do it, even though that's the real way, you can actually break through, because real customer conversations
gives you real problems and real features that
your product is lacking and real reasons why they're not buying, and you're able to actually go back in and build the right feature instead of the one more feature trap. So that's principle number one. The principle number two
or mistake number two, and I'll talk about
how to do the opposite, but they'll be pretty obvious. The second one that I see very often is the massive ICP trap. This one's not as obvious as this one. Like when I say the one more feature trap, founders immediately get it
and more than they get it, you can see it in their eyes and you can see that they're
feeling it in their gut because this is their
life and the pain is real. The massive ICP trap is a
little bit more deceiving. What ends up with a massive ICP trap is they've got a product,
they've got some revenues or they have been growing and
all of a sudden it stalls, but all of a sudden, they just don't know how
to continue it forward. They don't know how to grow it. And what they end up doing
is they try to make it where it's anything and
everything for everyone. They don't go after a specific
segment of the market. Now, what is really happening and I've seen this enough times, and I've gotten enough founders and I helped enough
founders to get out of it and I had to get out of it myself is we confuse our TAM for our ICP. So the TAM is your total
addressable market. This is all the people that
can possibly use your product. The ICP is a specific
segment of the market that's underserved, that has
an urgent and important problem that can use your product right now to help you get to that
next stage of growth. That's the difference. And as founders, we want
to build massive companies. We don't want to belittle
the solution we're building. We know what it's capable of. What we are often not
willing to admit is like, look, I need to be serving
this part of the market first so that I can earn the right to actually serve the bigger market because this part of the
market is where I can compete, this part of the market I'm not ready for. But when you're trying to do everything, you're trying to be everything to everyone and nothing works. It's counterintuitive. But the best example I can give you, the way I can get founders
to like snap out of it, is like, okay, look Amazon,
they started in 1999 or 1998 by selling books online at a time when no one bought anything
online, let alone books. Then they earned the right to
sell everything everywhere. So they knew they needed
to get hyper-focused on just books, just online, even though they wanted to
be earth's greatest store, but they focused on their ICP and then they expanded that ICP over time to fulfill their TAM and grow their TAM. Uber is a great example of this as well. They started with going after
the existing black car market and then they moved to providing transportation for everyone, everywhere. That's the power of an ICP. And when I work with
founders on their ICP, the 29 different points we look at, everyone thinks they have an ICP, until they actually work with me. But that's the power of it. That's why I'm so passionate about it because so many founders
fall into the ICP trap and they end up neither here nor there. The worst part of all
of this is these two. Remember how I told you my first startup, my first SaaS company that
I was trying to build? I learned these mistakes the hard way. These two compound on each other when you're making both these mistakes because you go after a massive ICP, so you're trying to be
everything to everyone and you talk to all those people and they say, I don't want to buy, so you go back and you say, oh, I just need to build
this one more feature because so-and-so said they'd
buy If I build this feature and you go build that feature and you try to go after
another group of people just in part of that massive
ICP or your total TAM and they're like, no, but
I need this one feature, so you keep building these features, keep going after a massive ICP, keep going building and you just die and that's what happens, and
that's what happened to me until I broke through. These are two that are the most common that I see even today. I started in this game. I started in SaaS, like baby
TK was back in like 2009, 2010. I really got into it. Even today, as I meet founders, I see this all the time. And it doesn't have to be that way. Like how do you actually
flip just these two? Well, you stop thinking in terms of the one more feature trap and you start talking to real customers through a proper go-to-market strategy. How do you get a proper
go-to-market strategy? Well, you actually build out an ICP and get much more focused
about what you're doing. Ironically, building a
go-to-market strategy and talking to customers and actually trying to sell the product helps you build a better product. And that's the crazy part about this. Now, before I keep going
and go to number three, which is the big one,
this one hurt the most, let me just pause here for a second. Are you starting to see the power in this? Are you starting to see the power on why these three or at least these two that I've shared so far,
hold back so many founders? And you're starting to see the power of, if you were to just flip this and stop thinking about one more feature, one more feature, one more feature and just start thinking about, well what does a customer want? Let's go build that. And you actually build out a
proper go-to-market strategy and get focused on your ICP and
get focused on the messaging and start to attract those people and then build around them. If you're starting to see the power of how that's such a
better way to do this, can't I just get a yes
in the comments below and also smash that like button
for the YouTube algorithm. It really loves it when you do that. Now, if you're at this stage, either you're pre-revenue
or you're at that stage where you've exceeded the existing network of people that you can sell
to and no one else is buying, or you were selling and all of a sudden, you just hit an inflection
point, it's no longer selling, then you need a revamp
go-to-market strategy. And this is exactly
what I do with founders inside of my SaaS
go-to-market coaching program. You don't have to go anywhere right now. I'll tell you more about it
at the end of this video, but I'll link to it below as well. But that's just something
I want you to know, because there are solutions to this and that's what I work on all day long and that's what I love, doing what I do. All right, so let's go to number three because this problem comes
up and it came up for me a little bit later. Once I learned these two, I was still hit with this
number three problem. And this number three problem is that we didn't do the math trap. We didn't do the math trap. This is the math for every single business and also every single SaaS business. If you generate 100 leads,
this is the math, okay? If you generate 100
leads, the law of averages means that 10 of them will
lead to real opportunities. Meaning 10% will become real opportunities that would actually qualify
to purchase your product. This could be where they're at actual fit or it could be like they're
actually interested. Either way, 10%. Out of those 10 opportunities,
two will become customers. That's the 20% conversion. That is the math. And a lot of people don't do the math, which means that even to
just get one customer, if you're pre-revenue,
just to get one customer, you need to have 50 conversations. And guess what? This is not just in the early stages. This is even in the later stages. If you've all of a sudden
exhausted your current network of people that you can sell to, or you had this one channel
that was getting you revenues that it's no longer bearing
fruit, and you're like, how do we get more pipeline? How do we kickstart growth? Or you're just stuck at
a certain revenue level, just realize that there is math to this. In order to get one more customer, you roughly need to get
into 50 conversations with people in your ICP. And a lot of people don't do that math. I didn't do that math. I remember when we were scaling, I'm like, how do we grow and how come we're not going faster? The stuff that we did, it should be getting
us to this next level. What got me to, say, a million in ARR, I realized very quickly, wouldn't get me to three million in ARR. Different revenue stages need new and more scalable ways of growing. And ultimately, it's
because with larger numbers, you need more leverage
and you need more scale because this math does not change. It's the law of averages. And I see so many founders
struggle with this because they just don't do the math. This is the law of averages. This is not some TK's SaaS principle law. This is literally the law of averages, applies to everything in life. And that 10% will convert
to real opportunities and 20% will convert to real customers. Can these percentages be higher? Absolutely, it can. I've seen it, but this
is the bare minimum. Just to get one more customer, you need 50 quality
conversations in your ICP. So that essentially draws
this big line, right? Founders who actually
want to do the opposite of these top three mistakes can either choose one of two things. One, you can continue to
keep doing what you're doing, the one more feature trap, just
keep building more features, go after a massively
undifferentiated market in an undifferentiated way
and just ignore the math, or you can say, all right, you know what? I'm not going to do the features anymore. Instead, I'm actually gonna think about how do I get into 50
conversations every week or every day or every hour, depending on the scale you want to pursue? In order to do that, you actually need a proper strategy to actually drive this kind of scale, to get into 50 conversations so you actually stand a
chance at one customer. Now, I don't care if you are pre-revenue, you are at a million,
you're at a three million, this is what you need to do
to get to that next stage because you wouldn't
be watching this video if you weren't stuck. There's three core things
that you would need to do to actually do the opposite
of these three mistakes that every founder makes and baby TK made and learned the hard way. The first one I already told you. You want to get very specific about your ideal customer profile. Given your product, given
the problem you're solving, there's a specific segment of the market that's more likely to actually purchase. Now, this is not just a direct answer. You have to analyze this and
understand exactly what it is. It's not that complicated
if you follow a framework which is what I do with founders, but that's what you need to do. Once you have that, then you need to figure
out what your message is. I call this the manifesto. This is a combination of
your value proposition, your positioning, and
your strategic narrative. This is the thing that
you put on your website, your ads, your cold email copy, all the way down to your pitch deck. Now, this is built off of your ICP. The more focused and specific and detailed your ideal
customer profile is, the more effective your
messaging is going to be. The more unfocused it is, the worse it's gonna be
and it's not gonna work. And in the third piece, is you need to now mobilize this manifesto to your ICP. You need to figure out ways where you can bring this
manifesto to your ideal customers on a consistent basis
so you can consistently get these 50 conversations
to get that one customer. And that's what I call your Broadway Show. This is a consistent set of sales and marketing activities
that you are going to do to actually get into these conversations, which 10% of them will turn
into real opportunities. And by the way, this number does go up as you get better with your
message and with your leverage. And 20% of them will become customers. And it doesn't matter what
your revenue target is, these laws apply, and so
you'll have to figure out how to build the right scalable machine so you can do this effectively. And that's how you do the opposite. So to recap, number one, biggest mistake that founders make, even today and baby TK made, stay in the one more feature trap. Just keep coding because
we're comfortable with that. I'm an engineer. So much easier for me to
just put my headphones on, go back to my comfort zone and say I'm gonna build
this one more feature and they're gonna love
it when I put this up. Everyone's gonna want to buy it. You try that. Try that for a little bit or maybe you have already,
see how that goes. You can also just go after everyone instead of having a true ideal customer profile with specifics. And the other is you don't do the math. Those are the three biggest things that founders make a mistake on and that's why the
failure rate is so high. However, if you want to do the opposite, stop building more features, stop going after a massive ICP
and figure out your number. So you figure out what your
ideal customer profile is, get specific, then
flesh out your messaging so you can actually bring that to your ICP on a consistent basis and start adhering to the laws of averages and the math that applies to
actually generate revenues. And I've followed this framework a billion times in my own
life, in 15 years of SaaS, and now, with over 250 SaaS companies that I coach on this exact framework. And there's so many
letters I get from folks who watch this channel, across
anywhere from pre-revenue, all the way upwards of 100 million in revenue I've heard from people. In my coaching programs, I have people from pre-revenue,
they have a product built and they're trying to
get to the first dollar, upwards of 100 million in revenue. I've seen it across the board for these folks who understand, okay, I need to get out of
the one more feature trap, build a go-to-market strategy and understand the maths so I know how much
activity I need to drive, and that's what it takes to get to that next level of growth. So now you know what the top three mistakes
are for SaaS founders that we all make and what holds us back from getting to that next stage of growth. And now you also know how you can flip these
and do the opposite, instead of staying in the
one more feature trap, going after a massive ICP
and not doing the math, get specific on your ICP,
develop your message, get in front of these
people, and guess what? They'll tell you in a very specific way exactly what they need to buy and you'll know what features to build, you'll generate revenues, and it'll become a perpetual
motion machine from there. This will become a
flywheel for your business. And based off of this,
you're gonna get revenues and you're gonna get a better roadmap. So you'll never be in the
one more feature trap. And as you get more revenues, guess what? You can go back to this and grow your ICP and go after that world domination. Now you know what the
top three mistakes are and how to do the opposite to actually drive growth
for your SaaS business. What you may not know is, hey, TK, how do I flesh out my ICP? How do I flesh out my manifesto, and how do I run a Broadway show? This is exactly why I run my SaaS go-to market coaching program. Inside of this program, I give you the step-by-step framework on how to actually build out a
scalable go-to-market machine so you can drive growth
for your SaaS business. And when you join, you and I work together to make sure that you're
set up for success, you're actually driving that growth. So if you want to learn
more about the program, you want to work together, just go to tkkader.com/gtm. tkkader.com/gtm. If you want to start working together after you look at that page
where you get all the details, you just have to fill out a little form, we'll get on a call, we'll make sure that you're
a good fit for what I do. The better the fit, the better the results and then we're off to the races. It's an incredible program. I've been running it for years after having done this for over a decade. So that's why this works so well. This is literally me from the trenches working with founders like
you, implementing these pieces after I've done it myself in SaaS. It's an incredible program. Just go to tkkader.com/GTM. Also, if you got value from
these top three mistakes, if this resonates with you, smash that like button
for the YouTube algorithm. Also, comment below with your story, I'd love to hear from you. Also, if you have a fellow
founder or team member, if you're part of a Slack
group or a WhatsApp group with other SaaS founders, please
share this video with them, or help as many SaaS founders as possible in avoiding these mistakes and actually getting to
growing their SaaS companies. It would just mean the world to us. We put a lot of love into these videos. Also, I drop an episode
every single Sunday with actionable strategies and tactics on how to grow your SaaS business faster. So be sure to hit that subscribe
button and the bell icon and you'll get notified every
single time I do an episode. Lastly, remember,
everyone needs a strategy for their life and their business. When you are with us, yours,
it's gonna be unstoppable. I'm TK and I'll see
you on the next episode or inside the SaaS Go To
Market Coaching Program. Take care, everybody. (upbeat music) And when you follow these three principles and do the opposite of what the most... Blah.
