What is it like to build a SaaS company? Do you consider it easier or harder than other startups?

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JASON LEMKIN

Both.

SaaS is harder than a successful B2C company because you are always selling. You never get a break. Each quarter, the gauges in Salesforce go back to zero. Every quarter, you have to sell more than the last one. And sales is hard, human capital-driven work. Not tweaks to algorithms. It never gets easier. Yes, upsell and retention and recurring revenue helps a ton. But still, each year for a long time you have to sell as much as you sold in all your prior history. And later, you have to sell an entire unicorn of sales each year. This is hard in that you never get a break. You never get the Snap-like or even Dropbox-like viral boost 99.5 times out of 100.

But …

SaaS is enduring. As hard as it is to always have to sell and close, if you have happy customers, it’s very hard to kill a SaaS company once it’s at scale. SaaS companies that cross $20m, $40m, $100m+ in ARR … last decades, if done right. They aren’t faddy.

Which is “better”? I’m still not sure. I think the journey picks you. But SaaS is probably more enduring.

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Published on March 23, 2018

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