10 Deadly Mistakes Made By The SaaS Startups

10 Deadly Mistakes Made By The SaaS Startups

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SaaS startups come along with an amazing kit of innovation and feasibility. The Software-as-a-service model allows you to have multiple advantages which you can never avail in a traditional enterprise.

From being a low-cost business in terms of infrastructure and hiring to being a far more friendly business model in terms of software upgrading and sharing the interests with the buyer.

SaaS definitely gives a super-cool platform for both buyer and the seller to be benefited from every angle, provided both parties work intelligently.

You might be wondering:

If a SaaS startup is so easy to build up, then…

Why are these guides being published? How is it difficult to enter into this market? Why do some SaaS models fail?

It is true that SaaS companies require less startup capital, less workforce at times, lesser resources along with many other advantages which a normal business doesn’t have. It’s a cloud based business model where most of your work is done on computers using apps, digital media and sponsored programs; you do not have to put in so many physical resources.

However, it also has some highly sensitive factors which need to be taken care of. Today, in this post I’m going to make you visit through some of the very common mistakes that we make while starting up a SaaS company.

Here you go with the 10 deadly SaaS startups Mistakes that you have to avoid now onwards:

1. Mixing up SaaS startup with a Traditional Enterprise Software Company:

SaaS companies must make financial structures to take advantage of a model based on recurring revenues. The financial processes of a SaaS company are far more different than traditional set up. A SaaS company’s initial cost is comparatively low; the proceeds are advanced and far more optimized. You might not need a large workforce or a large office and only few people can design an app and sell it to become a hit of the time.

So, a SaaS company operates differently than a traditional business. The later stages might be the same as the product matures but at the start it is the utmost requirement to consider the difference between the two business models and operate accordingly.

Delivery and Deployment in SaaS

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The diagram shows the ease of delivery and deployment in each software sector.

2. Not thinking of the Actual existing Pain Points and Solutions:

The main problem with today’s startups is that they do not properly look into the  “Customer Pain-points”.

Many customers continue to do their tasks in the old-fashioned way just out of  their habit, like using an older software, or performing their tasks manually that lots of new software programs have started automating.

Today, consumers are living happily in their own bubble, basically ignorant of the highly productive and faster options that have been introduced by technology.

Now, the entrepreneurs are also not able to identify the ‘Pain-Points’ among their consumers..

And with this lack of brainstorming, SaaS startups end up failing by opening up the previous typical services and not thinking out of the box.

Buffer Loves To Answer the Customer Queries

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Example shows Buffer loves to chat and provide answers to their customer’s queries and issues.

Consumers when told about the new stuff they do listen and start developing a certain level of interest in it. New startups need to educate people about their needs and create opportunities for them.

3. Having the Philosophy that One-size-fits-all:

A strategy working well for an organization does not mean that it will succeed for every other business as well. Being skeptical about things and taking steps after thinking and pondering is the best option.

Having the Philosophy that One-size-fits-all

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All the businesses work in their own way. This is a big mistake that we make by copying other business models and assuming that the same strategies would work for us as well.

No, this can’t be the case. The approach has to be different for different models, even for the same model. Your surrounding factors can be different and the same strategies might not work on your plans.

4. Having One Price for Everyone:

Trust me, having only one price for all is a horrible idea. Never try to adopt this theory because it is not going to work at all.

Offering the same price to everyone means you are putting them all under one category and that can never be a realistic approach. Offer them a variety; variety of price packages! Try applying price differentiation. It is considered to be the art of selling when you sell the same product for different prices to different customer personas.

Price bundling and price segmentation through demographics, geographic, lifestyle, psychological and various other factors, is the best way to offer a wide range of prices and grab all the segments of your market. It’s to become affordable for everyone.

Various Price Bundles

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The picture shows how you can add features and make various bundles of prices for the same product with some added features to the subsequent bundle.

5. Rushing to Hire people too fast:

A common mistake that SaaS startups usually make is hiring people instantly without thinking and analyzing what the company actually requires.

Companies do not get the right skill-set for the business and fail to hire someone who is in line with the culture of the company.

Rushing to Hire people too fast

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Hiring people who do not sync with the demand of the position or in other words, hiring wrong people is of no use, in fact it is just a waste of time and resources. This time spent in hiring the people your company does not even need, can be spent in something fruitful.

Here’s a guide on how to hire right people at the right time: When Is the Right Time for a Small Business to Hire?

(Note: Join my Free Newsletter to get my weekly tips on Business Growth, Marketing, Technology and overcoming the challenges faced by me and other fellow entrepreneurs…Join Free Newsletter Now.)

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6. Hiring People who shouldn’t be talking to the Public:

The new platforms, tools and metrics that are available to drive customer support might seem too much automated but the real fact is that it’s still a people-powered business.

Hire Smart People

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The latest processes, apps and the digital age of marketing might seem new, different and robotic but this is not the case. Nothing can be done without human power. It’s the workforce which completes everything, which gives a proper finishing to each process.

So, you need to hire the most suitable people who would represent your company.

7. Not focusing on Customer Service:

Times have changed and so are the processes. The product categories have also changed and now it is all about ‘H2H- Human to Human’ dealing rather than B2B or B2C.

It is extremely important for businesses to interact with the customers, provide them with full customer service so they would not think about leaving your site or switching to any other site.

Live Chats, messages, emails and follow ups are some of the most effective ways in which you can build a bond with your customers.

Importance of Customer Support

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This picture shows how important customer support is for a company.

8. Overlooking Promotion:

The saying, “If a tree falls in the forest, does anybody hear?” is not a myth but a fact for sure. Along with selecting the content, formatting and production schedule, a lot of time and resources need to be spent on the promotion and distribution of the service.

Overlooking Promotions

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Some heavy and worthy ideas are needed to be thought of and implemented with the help of the emerging digital marketing platform. Today, there are hundreds of platforms where a new SaaS startup can be marketed. Use them wisely!

9. Assuming Content Marketing is Expensive:

Content Marketing other than being expensive has also become the need of the hour. One simply can’t go without it. A SaaS startup would do great with the help of a Blog. The blog will eventually help you generate your leads.

Have a solid relevant content, have some good authentic backlinks and the link building will make you and your company famous all around. Content marketing has become the need now and it surely is a great way to promote your company among the relevant audience.

You will have to pay to the writers but trust me, it is way less than the amount you spend on other traditional modes of marketing.  Ignoring content marketing is a mistake which you really need to avoid.

10. Neglecting User Communities:

By empowering the user community, you help customers get the most from your product, which in turn boosts user adoption. You also get a ready-made user group for real-time focus testing and you can reduce support costs.

Community members will eventually help each other instead of relying on you. You’ll find that leaders will emerge from your user population. Empower them with the resources they need and listen to them!

User Communities

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Community building and community management has become the need of the hour too because nowadays ‘Word of Mouth’ is everything. You cannot simply proceed without it.

These are some of the major mistakes which can turn a SaaS startup into a failure. This article will help you identify these mistakes and rectify them for your new venture. So, avoid them to make your SaaS Startup a success.

Good Luck with your future SaaS startups, Guys!

(Note: Join my Free Newsletter to get my weekly tips on Business Growth, Marketing, Technology and overcoming the challenges faced by me and other fellow entrepreneurs…Join Free Newsletter Now.)

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2 Responses

  • 7 Mistakes To Avoid In Your SaaS Startup | Bannersnack blog August 5, 2016 at 7:48 am

    […] changing, there are enduring factors that have plagued SaaS startups for years. It is true that a startup is very unpredictable, but anticipating these problems gives you the chance to stand the test of time and build a firm […]

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  • Guide to LinkedIn Advanced People Search | Bannersnack blog November 10, 2016 at 3:37 pm

    […] when it couldn’t help you in searching that particular person from another network…  Or that entrepreneur who just launched a startup of your niche in another […]

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