Skip to content

Why SAAS Startups Fail

How To Ace An Interview

Although SAAS (Software as a Service) enterprises have grown in relevance as organizations increasingly rely on them, it is not that rosy for startups. In this post, we will look at some of the common mistakes startups make  and dig their early graves. So, why do startups fail?

The failure of many SAAS startups  can be traced to a fundamental misunderstanding of the need gap. The first step in beginning any business, including SAAS, is to identify a need gap. However, some startups have failed because they were serving the wrong need due to insufficient and improper research and market evaluation. Therefore, in order to prevent failure and embrace growth and stability, a firm must be built on solid foundations of accurately understanding the what and why of its product.

Another common mistake that lead to startups failure is choosing the wrong market. When considering who needs your product, thorough market research, case studies, and evaluation are required to determine why the proposed customers require the product, as well as government and economic policies surrounding such products in the target market, level of technological development in the target market, and educational and literacy rates. While a positive answer from these indicators indicates a healthy market, a negative response indicates an unfavorable market, and delving into it would be comparable to burying oneself early. 

Setting the wrong yardstick for the Minimum Variable Product (MVP). An MVP is simply a product with just enough minimum features for early users while giving room for further development. When more than necessary, it leads to misallocation of resources and abuse of unimportant features by customers. Falling below the requirement, on the other hand, reduces the chances of it leading to a successful final product. This highlights the significance of outsourcing, as outsourced development teams have a better understanding of the MVP standard.


Furthermore,startups alsofail due to  poor finance management. For example, if the MVP is incorrect, the company will devote all of its financial resources to developing the product, leaving essential issues such as marketing and strategy unaddressed. As a result, there is frequently a lack of cash and then, a gradual decline.

In addition, setting excessive sales objectives for sales reps, outsourcing first before doing it yourself, employing a slew of marketing firms, and outsourcing to a brand marketing business are all examples of common blunders in the area of marketing and sales strategy. It’s fine for a startup to concentrate on product development, but marketing and sales must not be overlooked. Public relations campaigns, determining where the product should be advertised, and determining which marketing tools would be necessary are all crucial. 

In summary, it takes work to get a SAAS product off the ground. But you would be far from failing if you got it right at the setup stage. Knowing the right need gap, choosing the right market, designing a concise MVP, proper budgeting of financial resources, and effective marketing and sales strategy were identified. 

Leave a Reply

Your email address will not be published. Required fields are marked *

error: Content is protected !!