Getting to Initial Traction

If You’re Going to Do a SaaS Start-Up … You Have to Give it 24 Months'

Jason Lemkin

It seems like everyone wants to be a SaaS founder these days.  I meet with great VPs of Sales and Product in particular who are Ready.  It’s time.  To go out on their own.  Start their own SaaS company.


I get it.  I’d like to recruit you to be a VP at one of my companies, but I get it.  No one ambitious wants to work for The Man.  I mean, not really.

But should you?  There are three things I ask folks who want to start their own SaaS company:

1.  First, are you prepared to give it a full 24 month commitment to hit Initial Traction?  Not 12.  Not 18.  But — 24?  6 months isn’t enough.  12 isn’t.  It’s going to take you 9-12 months just to get the product right.  And another 6-12 to get any material revenues.

Maybe an Instagram or a WhatsApp or a Pinterest or a Meerkat can explode in just 12 months.  That just doesn’t happen in paid SaaS apps.

>> Can you “afford” to commit for 24 months just to get to Something, to real Initial Traction?  If not, you should pass.

Slack went from $0 to $12m ARR in ’14.  Woah.   But it wasn’t founded on 1/1/14.  It took them a year to get to a Minimum Sellable Product.  And it was really founded as a company many years earlier, see the Crunchbase chart to the right:

In any event, giving yourself 12 months to get to Initial Traction just won’t cut it.  You’ll quit.  Because you won’t have enough revenue just 12 months in … if you have any.

And the honest truth is most folks can’t really commit for 24 months.  For financial, or personal, or whatever reasons.  That makes sense.  But you’ll fail in SaaS if you don’t commit to 24 months to Initial Traction.

2. Are you able to commit to 8,760 hours a year?  That’s 24 x 365.  I don’t mean committing to being in the office 14 hours days.  That’s not really necessary.  That’s for the YC kids 🙂  But can you really, honestly, commit to obsessively thinking, worrying, futzing, stressing about how to do The Impossible.  Every.  Single.  Moment of the day.

Nothing else, but work.  Even when you are playing with the kids.  Having dinner with your husband.  Because that’s what it’s going to take.

>> If you don’t have the mental bandwidth — you should pass.  Because everything in SaaS is just insanely competitive.  And also because SaaS is so multi-faceted.  You’re going to have to be the VP of Sales, Customer Success, Marketing and probably Product in the early days.  There’s endless drama with paying customers.  You’ll almost lose your Best Logo Accounts.  You have to be intensely, painfully committed to do all this.

Later, there will be fat, once you get to $5m ARR or so.  The cavalry will come.  More on that here.  But in SaaS, it takes a long time until then.  Because it’s just so hard to get recurring revenue engines going.

3.  You have to have Zero Optionality. This is perhaps most important.  If you maintain optionality, it never works.  “I’ll try for a while and go back to Salesforce if it doesn’t work.”  or  “I’ll do a lot of consulting while I see if it works.”  or “I’ll raise $500k and see how it works.”

This just never works.  Not for high-growth start-ups at least.  Great founders maintain Zero Optionality.  Not because they are crazy risk takers.  But because they just don’t see the huge risk.  They have no back-up plans.  They see The Future.

If you need to maintain optionality — you aren’t ready to do your own SaaS startup.


Ok, now what if you aren’t quite there.   You can’t pass tests 1, 2 and 3 above.  But you are … close.

Then take a pause.  But don’t say no yet.  Instead, go do some more homework.  Do 20 customer interviews (more on that here).  Find a great co-founder that also can commit for 7-10 years overall, and for 24+ months to get to Initial Traction.  Because he or she has to pass tests 1, 2, and 3 above.  You almost certainly can’t do it alone.  And see how it feels after that.

Because again, the great founders can see The Future.  But sometimes they need a little help to get there.  I did, in both my start-ups.  20 interviews and a just amazing co-founder can be the missing pieces, to show you how to really do your own SaaS start-up.

Going back to one of our Dreamforce presentations, look at Guidespark and Talkdesk.  Both are on their way to being Unicorns.  But man, both took far longer than 24 months to get to Initial Traction.  But now, they’re killing it.  Can that be you?

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Published on March 6, 2015


  1. Thanks Jason for this reassuring post. Understanding the problem & pain-points of Businesses is the biggest hurdle. 2 reasons I have found in travel industry –
    a) Tour operators are not much forthright when talking about their problems/inefficiencies. They don’t trust you to come-up with a viable solution.
    b) Identifying and getting hold of some ‘insider’ willing to help, consumes time.

  2. Thanks for the helpful information Jason. I’m sure not everyone is going to agree with it, but I think it gives a realistic look at what it really takes to be successful in the SaaS industry. I do tend to believe though that it’s a lot more difficult for people to have Zero Optionality once they have established careers and have families. So I’m wondering if that’s why more young people tend to be successful in the SaaS arena. Your second point is right on the money too. You may not be working 24 hours a day, but the business can never be far from your mind if you’re going to rise above the competition.

  3. Hey Jason, this article is full of truth about Entrepreneurship in the SaaS environment. It’s great to read posts like this. After reading this, you better be confident that your idea is worth the investment. You therefore avoided people to get into projects they don’t feel fully committed to. Great post!

  4. I’ve been thinking about this a lot recently. What does it take to become a startup founder? Does it start with the idea? Nope, it’s as you say, something as simple as, I’m tired of working for the man. That is more important. An idea is worth as much as the napkin you wrote it on or the 5 seconds you thought about it. Likely, 10 other people thought of exactly the same thing in that span of 5 seconds. But it is easy to simply want. Has she thought about what it would take and how long it would take to even validate she might be on to something? So you nailed it. Desire alone is not enough. Fortitude is crucial.

  5. 24 months makes the most since.

    `3 months to get off the napkin and into a demo of what your company is solving.
    `Next 6 months to test with your first 5-15 customer.
    `Month 9 you should be able to have a MSP.
    `Next 3 months of figuring out your best repeatable sales pitch.

    So now you have the kinks kind of worked out, and 12 months to focus on growth and product development based on feedback from your customers.

    I agree with Jason on this set of time. If you think it will be faster, you will short cut, and eventually have a product and team that most likely will crumble under the weight of stress, pain, and customers.

  6. I found this very encouraging. I read it to mean if we stick to our knitting we are on the right track. And as long as our market validations are correct, then only time and execution need endured and tackled. That’s just another 12 months to over night success!

  7. Great article. This is true. Our bootstrapped Healthcare IT saas startup was founded 2013, we have pivoted, iterated until we have got a mvp, then 2015, we are making five figure revenue in the first three months of the year + more pipeline deals which will lead to more revenue.

  8. That is a great insight. Just a clarification. You refer to the initial 24 months to get traction and if you can’t afford this period of time it’s not worth it. I guess you seperate the fact that one might have secured some funding for the business to cover the basic costs like salaries and product development for the first 12 or 24 months. In this case you have the luxury to actually dedicate yourself fulltime. Would this change things?

  9. Spot on. I joined a start up a few years back, and that’s pretty much the way it went. I do think more startups need to build something that has a chance to be profitable at least by year two, and stop continually reaching out to others for money.

  10. Pingback: FG Newsletter #303
  11. The first 2-3 years of an early stage start up for an employee is very similar. The same questions and tests are also valid even if you are not the co-founder. “…But can you really, honestly, commit to obsessively thinking, worrying, futzing, stressing about how to do The Impossible. Every. Single. Moment of the day.” These sentences exactly depicts me during my previous role at a SaaS start up. It is fulfilling, still a very big commitment. And one should always be comfortable in answering the questions you recommend to ask and even more before diving in.

  12. So here’s the real question: how can anyone start a company who’s not already “wealthy” – that is, someone who can forgo 24 months of income? Since there’s no investor (minus friends & family) who’s going to invest before $1MM ARR, that’s really THREE years of ZERO income. Thomas Edison “discovered 1000 ways not to invent a lightbulb” but he did it with financial backing in under 12 months. This is perhaps the most interesting riddle to solve…

      1. Great in theory, but there’s no way you could save enough living in the valley with a family, even over 5-10 years unless you’re lucky to be employee number 10 at Uber or something. Even then you need a liquidity event to exercise your options.

        1. It’s feasible if you add extra income streams and consider moving to somewhere with a lower cost of living. If any of this were feasible without making sacrifices I’m guessing a lot more people would make the leap.

          1. I’ll add — I house hack in Las Vegas. I live for $155 / month. I bought an easily affordable condo and rent the other room out for market rate, which just so happens to pay my mortgage. My monthly expenses are only like $800 because of this. Something to consider.

    1. The most important thing you can do to make this easier on yourself is to CUT YOUR PERSONAL BURN RATE WAY DOWN. You will be surprised at how long you can afford to go without a paycheck (even in the Bay area) if your expenses aren’t more than $3K-$4K per month. You only need about $70K-$100K in net worth to make that happen (you don’t need to be wealthy).

      Plus, Jason is referring to INITIAL TRACTION of $1M+ in ARR. Initial traction is the point at which you can generally start to raise an A round, or at the very least, a Seed Plus round. However, if you have even ANY kind of traction (like even $20K/month in MRR), you should be able to raise a seed round of $500K-$1M, and pay yourself enough to cover your living expenses, which will extend your runway even further.

      Great entrepreneurs are scrappy when it comes to making sacrifices in their personal life to do a startup. It’s not for the faint of heart, otherwise everyone would be doing it . . .

      1. I’m not making excuses I’m just hoping the community can be honest with the fact that “vc” has become growth equity. Nobody is raising $1MM with $20K MRR unless they’re very well connected.

        1. That my friend just isn’t necisarily true. $20k is a solid base and there are plenty of guys out there that can raise close to, if not a million based on it.

          I’m 3/4 way through raising half a million with only $2k in Mrr (didn’t have connections to start with). You just have to work at it hard and long enough. I literally had to spend 8 hours one day practicing my pitch. I didn’t realize it was as tough as it was when I first started.

          Once you get momentum, it all changes.


          The market is so damn good for raising money out there today. Find angels; family and friends to get off the ground. Raise $50k. Go back to them once you hit better numbers (I.e. $20k mrr+) theyl happily kickin more if you’re doing well

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