In my experience, the number one indicator of success in a SaaS business is experience.
In a SaaS business, this equates to the number of times that the person running the business has done it in the past.
This is actually true of pretty much anything:
- Pilots measure basic skill and experience in the number of flight hours they’ve completed, with a minimum of 1500 hours (that’s 62.5 days, over two months straight, worth of time) required to become a commercial pilot
- World-class guitarists practice for hours every day to become world-class guitarists
- Surgeons must not only achieve a doctorate-level degree, but must meet certain post-doc requirements, usually entailing residencies which average five years of additional on-the-job training
The more times you’ve done something, the better you are at it. Building and running a SaaS Business is just like everything else: a career with a specific set of skills that you have to master.
A SaaS Founder Has To Know It All
Most SaaS systems start as a small team with big ambitions. The owner often serves as the lynchpin and has to have his or her hands in pretty much everything to ensure that the project continues to progress smoothly.
Because of this, you have to know everything:
- Information architecture
- Team Management
- Development Teams
- Non-Dev Teams (because they function entirely differently from Dev teams)
- Team Management Systems
- Team Composition (also different between Dev and Non-Dev Teams)
- Appraisement (Pricing)
- Affiliate Marketing
- Social Media
- Email Campaigns
- Adaptive Design
- Conversion Rate Optimization
- Effective Onboarding processes
- Customer Service
- Distribution (digital and otherwise)
Some of this, especially the more technical items, like Development, may be moved off of your plate if you have somebody on your team who is a strong technical founder or CTO, if you’re not that person.
But this list is still incomplete – it doesn’t include any of the legal items, such as paying for attorneys when necessary, contracts, insurance, and the business setup paperwork, among other things.
It Is Not At All Surprising to See How Many First-Time SaaS Businesses Fail
So many people are trying to get into development and they’ve never done it before. Maybe they have some skill as a designer, some skill as a developer. But I can tell you that, having done this multiple times and having skill as a designer and a developer and a project manager and a business manager, it takes so much “knowing what you’re doing” to do it right.
That’s the top indicator, in my experience, as to whether a SaaS project will succeed. And, to quote Dracula: “We learn from failure, not from success.” Failing is the only way to improve yourself and prepare to try again, and it is, most certainly, not the end of the journey.
How to avoid a SaaS failure?
You thought this part was going to be a sales pitch didn’t you? Well, it’s not.
My advice on building a successful SaaS business has a few legs though. If this is your first rodeo, I recommend ALL of these.
1. Don’t go all out on the first try.
Do you remember the first time you got on a bicycle or go swimming? You didn’t get started at a triathlon on those, did you? Of course not! You started by first getting comfortable in the water, then putting your face underwater, and on the bike by maybe having some training wheels on and probably having a parent hold your hand.
You probably already knew how to walk and had a basic understanding of what you were doing when you got on the bike or into the water. But you knew you were started out, so you probably didn’t expect to be winning a world-class race that first year and definitely not on that first day.
So if this is your first time running a SaaS business or a business at all, why are you expecting to be a millionaire?
How about instead of this, take it easy, start with a small tool with some basic features to get some experience, learn the ropes then grow from there.
2. Realize that you’re probably going to fail the first time, and that’s ok.
Soon after you got on that bike the first time, you probably fell at least once or twice and in the pool, you probably swallowed water more than a few times. Each time you failed, you learned something valuable and probably didn’t do it again, right? Same thing here.
Take a look at my buddy’s story about how he launched several SaaS platforms before it started working out. So don’t put all your hopes and dreams into one basket. Know it’s not going to work out right away and that is ok.
3. Get a mentor
If you don’t already have plenty of mentorship already, find a mentor who has done this before and been at least somewhat successful. You can also organize a group of SaaS founders in your area or via a weekly video call to chat about how things are going and the issues you’re running into. This can be immensely valuable in helping you grow your business.
4. Do plenty of reading (real books, not just blog articles)
Next, find places on the web and in actual written books on how to build and grow your SaaS. Here are a few of my favorites:
- How To Kick SaaS by Jason Long (me) – the book is in process, but I add to it all the time.
- Traction by Gino Wickman
- The Digital Project Manager – You need to know how to estimate, plan, and run your project, and this is one of my favorite resources for SaaS build and management.
- SaaS Pricing Guide – DEFINITELY read this.
- Startups.com – There is a ton of great info on this site for all sorts of startups.
- Profit First – This is a book about how to always and forever keep making money with your business.
This is a good start, but there are tons of other books out there. I have all of them listed in the How To Kick SaaS book noted above.
5. Get some help
Even with the mentorship, I recommend getting a business coach. This is someone who is PAID to help you. If you get the right person, they’ll tell you what you don’t want to hear, help push you in the right direction, and help you make the hard decisions that you couldn’t otherwise do.
My very strong recommendation is to get someone who specializes in SaaS if that’s what you’re doing. Those guys are out there, it just takes some time to find them.
If you don’t have a team member who has done this before, not just a technical founder, but someone who has actually launched and grown an at least somewhat successful SaaS business before, I cannot stress enough how valuable a business coach will be for you. It can make the difference between a personally fulfilling and successful venture that culminates with big dollars in your pocket versus years of wasted time and money.
Before we do the sales pitch part though, I used for years and still use sales coaches, mentors, regular mastermind groups on a weekly basis. Now for the pitch…
Want to learn more? Check out some of my other articles:
Jason Long is the founder and CEO Of JH Media Group as well as a number of other businesses. He is always interested in new businesses, new ideas, and new ways to change the world. He has over 18 years of experience in design and development, he has served in a variety of different roles ranging from designer to CEO. Most of his time is spent working on the build and development of new ventures while traveling the world.