What makes a SaaS company successful? What are the key challenges and pitfalls that founders face? How can you go about building your business in these uncertain times in which we live? In this post, we’ll discuss some of the most common mistakes made by startups when it comes to growth. We asked SaaS experts about their insights!

Scaling lead generation before you’ve identified your target audience, product use cases, acquisition channels, and monetization model. There’s a concept of “product-market fit”, that contains 4 key elements: -Product -Market -Channel -Monetization So, before you find the “fit” among all of these elements with smaller amount of leads, trying to scale up means wasting your budget and efforts by attracting leads that simply won’t convert. You can’t rely solely on your gut feeling when entering the market. Not having a clear go-to-market strategy. This includes the details on how to win over the market and how to differentiate yourself from the competition, along with the lead generation strategy (acquisition channels) and the audience you’re going to target. Doing exactly what your competitors do is the worst strategy. Rapidly growing your headcount without a clear objective in mind. In other words, it’s best to test the ideas/approaches/channel yourself and if it turns out to work well, hire people to do the job.

Rimma Sytnik, senior digital marketing manager, reply.io

Strange but true fact of life: most people do not know how to optimize their own websites. So if you ask investors for help, be ready for the feedback that can’t yet offer good recommendations on faster growth. Bottom line: trust your instincts and use “best in class” and realistic techniques with final results to reassure the investor.
If you want marketing or sales success, don’t start relying exclusively on social media; it’s great for some businesses but it always needs a plan B. Mailing lists are usually a better way to go because they are controlled by the company and are responsive while social media is uncontrolled in unpredictable ways.

Maciej Biegajewski, LiveWebinar

SaaS founders make product decisions based on gut feeling and anecdote. Instead, they should get customer feedback, and make it part of the product development life cycle: listen, learn, improve, and evaluate!

William Perlmutter, Digital Marketer, UserSnap 

It’s natural to want a person with close relationships and expertise in sales. It seems intuitive that the founder could “sell” themselves, their vision, and the project to investors by leveraging their knowledge of what is needed to do it best. But- founders should really stay in being builders, developers, coders etc. They know how things work, implement day-to-day or want it will much more quickly than someone who just knows selling skills but nothing about what they are trying to sell.

Matej Kukucka, LiveAgent

SaaS companies are successful because they focus on high-valued activities. To do this, you need to keep track of your key metrics and ensure that the team has the resources it needs to achieve those goals.

Successful SaaS companies have a clear understanding of their goal metric, or what success looks like for their business model – and then work backwards from this goal metric to provide adequate support services around hitting that metric. They also make sure that there is an ongoing system in place where everyone records what they’re doing each day to stay accountable for how much time is spent on high versus low-value tasks, and how many hours are spent working.

Jack Wizmur, Scalac

Use a hosted CRM, which can provide the flexibility to scale and be agile quickly.
Premium products will win out over lower priced versions in the long term. Customers aren’t stupid – they know that cheap is possible if you’re cutting corners. Giving customers “what they want” (a reasonable but not premium product) now won’t take off in the future when everyone gets tired of your low-cost option; if you’re just building it for yourself, make it available as an acqui-hire instead of trying to monetize right away.
Review how satisfied new customers have been with their purchase and ensure that there are post-sales resources available 24/7 including customer service agents.

Andrej Csimandia, Post Affiliate Pro

SaaS founders shouldn’t worry about diversifying their marketing channels too early on in their journey. Plenty of world-class SaaS companies scaled to $1M ARR with one core growth channel (e.g. outbound sales, partnerships, paid ads, SEO, community-first, etc.)

Chances are, you already have 1-2 core growth channels that have brought you amazing customers already. Double down on what’s working and avoid chasing shiny objects.

Zach Grove, GM, ClickFlow, www.zachgrove.com

This is a difficult question, as there are many things that founders should not be doing.
Among the common things one shouldn’t do are: target only non-technical people to sell your product, do everything yourself and scope out your business incorrectly. Swapping in a new founder who has more of the skillset required, or partnering with someone who does would likely solve this problem. Conversely, you need to realize when it’s time for you to relinquish control of developing ideas and handing that responsibility over to other team members so that you can focus on larger strategy related goals for the company instead.

Julien Roy, Sparkbay

One of the most growth many SaaS startups makes is overlooking the power of content marketing strategy. The old adage “content is king” is still relevant in today’s digital world, especially for SaaS businesses that have just started. A solid content marketing strategy can be such a powerful way to attract prospects’ attention, provide them value, and build awareness.

Before prospects invest in a SaaS product, they make sure that they understand its value and how it can solve their problems. In this case, content can be a handy way to do that. That being said, SaaS content strategy is not just about pumping out as much content as you can, because that will actually hurt your digital footprint. The key to a successful content marketing strategy is really in being able to educate prospects and tell them stories from valuable and reliable data.

Andre Oentoro, CEO of Breadnbeyond 

Researching the industry I found that one of the greatest mistakes SaaS founders do are focusing on much on net-new customers instead of new sales.

Why working so hard at acquiring “net new” (brand new) customers when there is already a goldmine right behind their back – the existing customers!*

When it comes to SaaS – Customer Retention is now more important than ever before!

Why? Because getting a new customer costs five times as much as keeping an existing one.

And it is a fact: The success rate of reselling to an existing customer is 60-70% whereas the probability rate of selling to a new prospect is 5-20%.

When you clients are satisfied with your service, they will stick around. And then, the profit will continue to increase considerably in the long-run.

On the flip side, when your clients are unhappy, they will churn. And might as well go around and spread their negative experience with your brand.

Not understanding this is how SaaS founders perform “a brand suicide” in the initial phase.

Focus on your existing clients. Always. They come first, the “net-new” come second.

Ivana Drakulewska, Sales Rocks

The main SaaS growth mistakes that come to my mind are hiring the wrong people, relying on just one growth channel (say, Quora), allowing the situation when one client brings you 20% of the revenue, being not able to say “no” to investors/co-founders, following all the clients’ wishes and suggestions, etc. The number one mistake that hurts the most is hiring the wrong people. In SaaS, many customers rely on your continuous service. What you can’t afford is the interruption or malfunctioning. Once the service stops meeting users’ needs, they unsubscribe immediately. Practically, there is no way back for them. Another mistake that probably raises a lot of questions is following customers’ wishes. Surely, customer-centricity should be your number one priority. However, users may not know the most efficient way on how to resolve their issues. As Henry Ford said, “If I had asked people what they wanted, they would have said faster horses.” So I recommend giving ear to customers’ problems rather than their suggestions. In other words, listen to your users but stay creative and look for the best way to serve them.

Pavel Pavlenko, CEO at HelpCrunch

The best factors for a SaaS company being successful is user experience, retention rate, and scalability.

User experience is a key part of any SaaS company’s success. Users expect to find what they need quickly and easily so frustration can lead them to churn very easily if expectations aren’t met. Retention rate is the percentage of users who continue using a product after their first subscription. If people are not staying on as active subscribers then they’re most likely unhappy with something about usage or about their interactions with the service provider, e.g. a headless CMS.

Gaetano Caruana, Early Parrot, a referral marketing platform

A successful Saas company will experience an ever-growing customer base, strong prices for their product or service, loads of investors knocking on their door with offers of capital infusions. They’ll also see the costs associated with managing this growth start to become more expensive. Hiring employees is costly in all ways imaginable – not only does it cost up front in salaries but you’ll need experienced people juggling administrative work that is often harder then actually running the business for most owners.

Michal Slupski, Angry Nerds

For an SaaS company to be successful, the product should be really good and solve a problem for many people. Marketing can help but ultimately it’s about making sure your customer experience is there for them.

Many other factors could affect the lifespan of a Saas company like competition, licensing, or sustainability; however, one key factor to running any business is having satisfied customers. Of course marketing may also play an important role in upselling consumers on future products or bringing new ones onboard; however, at the bottom line it must always be satisfying the customer first.

Michael Milner, YouMap

1) The idea has to be able to serve a need – There needs to be some unmet demand for this product or service.
2) The company has to execute it well – This might sound simple, but many companies fail because they either lack the proper resources, don’t research the idea deeply enough, or simply don’t work hard enough at building and maintaining their company.
3) They need an effective marketing strategy – If the potential customers can’t find your product then you’re not going to get any sales no matter how good your plan and execution is.
4) They need a sustainable revenue model for scale and growth – I’m not talking about whether they make money in the short term but instead

Wojciech Jasnos, RocketLink

A SaaS company will often tell you that adopting a metric driven culture is the key. They will help you set up dashboards, tracking, and analytics to ensure everyone in the company knows how they’re doing in relation to these metrics. And it’s true – by tracking the progress of these metrics, your team can start experimenting with new processes or send out new initiatives each month that have proven successful in other companies for things like increased revenue per user or increased engagement rates on site pages.

Iva Anusic, Mediatoolkit

There are many tools you can use for your SaaS growth. For example, RightInbox. Right Inbox is the number one productivity tool that can be used with a Gmail account. It allows you to schedule emails, track them, send mass emails, recurring emails and much more right from a Gmail inbox. It also offers great email templates and sequences, allowing to perform email marketing straight from a Gmail account. With Right Inbox you can also add different signatures to each email. The tool is free, with limits on some features that reset each month.