Q: What are the biggest mistakes new founders make when they start a business?
- Not budgeting 24 months to get to a viable business. Most founders assume 6–8–12 months is enough. It almost never is, especially in B2B/SaaS. It almost always takes 24 months from “go”, or longer, to build a real business in SaaS. More here: If You’re Going to Do a SaaS Start-Up … You Have to Give it 24 Months | SaaStr
- Not having committed enough co-founders. A co-founder that quits after 6–8–12–18 months not only take a big chunk of equity out the door, but often leaves you far worse off than if you’d held out for a more committed co-founder. More here: A Simple Commitment Test For You And Your Co-Founders | SaaStr
- Not doing enough real market research. Did you really talk to 20-30+ potential customers? For real? Not just Google research. But real, serious interviews. If you haven’t, that’s the bare minimum to learn about a market. Even if it’s one you think you already know well. More here: Planning to Do a SaaS Startup? Don’t Forget the 20 Interview Rule. | SaaStr
- Not building a 10x better product — at least in one key area. No one needs more business software. Slack, Office, Photoshop, Salesforce are all fine products. Obviously, you can’t build something broad and deep in just 1 year. But you have to find one key feature — that customers value and will pay for — that the established folks don’t. What is your 10x feature? Many founders don’t actually know. More here: On Not Forgetting to be 10x Better | SaaStr
- Not closing the customers that will have you. This is a subtler point, but an important one. You wanted to go freemium, but the value turns out to be in $100k+ deals? Not excited to have to fly to London/Korea/Perth for a potential prospect? Didn’t really want to sell into HR teams? Many founders push back when the prospects they do have aren’t the same ones they’d sort of hoped and planned for. Instead of leaning in heavily wherever they have any early traction. More here: In SaaS, You Have to Love the One You’re With | SaaStr
Published on December 20, 2019