Dear SaaStr: What Are The Top Worries Founders Have As They Start to Scale?
B2B SaaS founders tend to share a lot of common concerns, especially as they navigate the different stages of growth.
Here are some of the big ones I’ve seen repeatedly:
1. Customer Concentration Risk:
Founders often worry about having too much revenue tied to a single customer. If one customer makes up 50%+ of your revenue, you’re at extreme risk. The solution? Keep that customer happy but aggressively find others like them. Use that big customer as a case study to land similar accounts—it works more often than not.
For every customer you have, there are always another 2-10 just like them. Even in the smallest and most niche markets. Go find them.
2. How To (Keep) Scaling Revenue:
Many founders struggle with how to scale from $1M to $10M ARR, and then from $10M to $100M ARR. Ok, almost all founders. The challenges shift as you grow—early on, it’s about finding product-market fit and landing those first 50-100 customers. Later, it’s about building a repeatable sales process and ensuring your infrastructure can handle the growth.
3. Burn Rate and Cash Management:
Managing cash burn is a constant concern for almost all of us. Founders often underestimate how quickly expenses compound. If your cash needs to last 24 months, you need to scrutinize every expense. So many founders get this just a little wrong … and end up running out of money 3-6 months earlier than they could have. And should have.
4. Hiring the Right Team:
A lot of founders wait too long to hire great VPs—VP of Sales, VP of Marketing, VP of Engineering. Even more founders settle. They hire VPs they know aren’t great, to finally get it domestically. By the time you hit $4M-$5M ARR, you need these leaders in place to scale effectively. Without them, things start to break, especially as you approach $10M ARR.
5. Going Upmarket:
Many founders are reluctant to sell to larger customers, even when the opportunity is there. If you have customers willing to pay you $500/month instead of $5/month, you need to seriously consider going upmarket. And $5000 vs $500. And so on. Some can stay SMB only to $100m ARR, even $1B ARR. But not most of us. It’s often the only way to scale meaningfully in SaaS.
6. Competition and Differentiation:
Founders worry about competitors copying their product or undercutting them on price. And you should. The pace here has accelerated even more with AI. The key here is to focus on your unique strengths—whether that’s customer success, product innovation, or a specific niche—and double down on them. And also to make sure your team can move … even faster.
Be ruthlessly honest about if you are getting more competitive .. or less. More on that here:
7. Fundraising Challenges:
Raising capital is always a concern, especially if you’re not growing fast enough or burning too much cash. For Series B, for example, you need to show 100%-125% YoY growth and a clear path to scaling to $100M ARR. If you’re not hitting those metrics, fundraising becomes a real struggle.
Be honest about if you are fundable today — or not. Ask your existing investors. They know.
8. Customer Churn:
Retaining customers is just as important as acquiring them. Founders worry about churn, especially in the early days when every customer matters. Investing in customer success early can make a huge difference here. And measuring it and driving it down every single quarter.
9. Technical Debt:
As you scale, the hacks you used to get your first customers start to break. Founders often face tough decisions about whether to refactor, rebuild, or keep patching things up. This becomes especially critical as you approach $10M ARR. Downtime, performance issues, etc. start to hit you just as things are getting good.
10. Founder Fatigue:
Building a SaaS company is a marathon, not a sprint. Founders often hit a wall around Years 4-5, when the initial excitement (and panic) wears off, and the grind sets in. It’s important to find ways to recharge and push through.
These concerns are pretty universal.
We’ve gotta a ton of tips in the posts above on how to avoid them 🙂
