Mistakes You Should Avoid In SaaS

mistakes to avoid in saas

Software-as-a-service, like any industry, is not perfect and infallible. It’s important to remember that SaaS too has hurdles its industry figures have to continuously solve, and it has to constantly thrive in quite a volatile environment in order to survive. If you want to start tapping into SaaS as an industry, or if you want to leverage on an SaaS software for your company, you’ve got to make the right moves.

Perhaps a lot of attention should be given towards making the right moves in SaaS because it’s such a flexible and volatile industry. Software producers and creators are expected to be able to create applications and improvements faster than competitors, and not just themselves.

In fact, while other companies might be happy with a consistent 20-percent growth, this much growth can kill entire companies in the SaaS industry when sustained. According to Jason Lemkin of Storm Ventures, Echosign, and Adobe Systems, this means SaaS is always in the cusp of innovating the way industries do their work. If this is something you want to invest in, here are some SaaS mistakes you should avoid.

  • Don’t get your VP of Sales too early, get 2-3 reps instead: One of the most challenging aspects of a starting SaaS company is that it’s sometimes difficult to approximate how many sales reps you need until you get your own VP of Sales. Lemkin says the best approach is to hire two (2) to three (3) you can leverage on not just to get the right leads, but to get recurring ones and know exactly how they did it.
  • Don’t hire people you wouldn’t buy from: An essential piece of advice is perhaps to never hire a representative you wouldn’t buy from. If you’re not confident with the skills of your sales rep from a customer standpoint, then you shouldn’t probably get that person. Likewise, it’s important to consider that sales will work best if they’re done on a recurring rate, and this can’t be done with one person alone. Finding people that will synergize well with the team can give you a fighting chance while starting out.
  • Don’t just focus on today: One of the biggest mistakes an SaaS company is to mistakes in saasfocus too much on how they’re going to make it “today” that they forget about continuity. Your approach to your SaaS performance isn’t about releasing a product people will buy today, but rather a product people will be buying next year, and the year after that.
  • Don’t ignore your strengths: It’s often said that the sign of company growth is if you’re expanding your niches, demographics, and areas of interest. Lemkin said this much is true, but if you continue doing the same process all over again, your structure at a certain revenue will more or less have the same ratio as when you had a lower revenue. In short, if your original numbers were 40 freemium-60 enterprise sales at $100K a year, it’s likely the ratio is the same at $1-million a year. However, if you know enterprise is your strength, tap into that market and expand it further.
  • Don’t forget to upmarket fast: Sometimes, it’s understandable that it may take some time to reach a particular sales target. Lemkin said in cases like these, try to use the Power of 10s – as in, if you can attract one person willing to pay X money for your product, there should be nine (9) more willing to do the same thing. If talking principle, this means expanding marketing as much as possible to be able to reach ten (10) times as much your current marketing estimates all the time. This might seem like an impossible endeavor, but that’s the point – you may fail, but you’ll fail to your advantage.

  • Don’t neglect the mini-brand: You understand what a brand is, but a mini-brand can be just as powerful in having a hand in the success of your sales. The mini-brand is what happens when you reach that point in sales where certain people – say, big figures such as yourself, or your employees – can be recognized as members of the brand; ro when the brand in itself can be recognized by people at least in the industry. You’ve got to tap in the power of how one person – be it an employee or a customer – to support the brand by themselves. Try to find a way to make customers want to consciously support you.

  • Don’t forget to invest in customer success: Remember, the goal here isn’t to sell today, but rather to sell this year, and the year after that, and the year after that. One of the biggest ways you could do this is by investing in customer success. This can be difficult, given SaaS and its nature as an extremely-competitive industry. When you make plans, however, don’t neglect focusing on how you could help your customers grow – because if they grow, you can make your brand grow.

  • Don’t wait to make a change: If you think your system isn’t currently working, and if you can have the people in your company (or even yourself) prepare a plan to try and fix everything, execute the plan immediately. Don’t wait for your sales to plateau and be too constant. Being stuck in one place can kill and company, and as such if there’s a way for you to innovate and deliver, tap into that opportunity immediately.


The Takeaway: Safety First in SaaS

SaaS has become quite a popular industry today that a lot of companies are beginning to see various perks in investments. However, if you do plan on integrating an SaaS software into your company, or if you’re planning to approach the market as part of the competition, then you’ve got to be familiar with what SaaS offers and what it doesn’t. Part of this includes knowing what mistakes you should avoid in SaaS. If you have other tips for viewers of this piece, feel free to provide your insights below.




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