Let’s talk about how to solve for what sinks most SaaS products.
Related Post – https://nxtstep.io/daily/everything-comes-down-to-time-and-money/
Deeper Dive on SaaS Economics – https://nxtstep.io/blog/how-the-world-of-saas-economics-is-changing/
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Hey folks, Sean here, and today what I wanna talk to you about is a better, more sustainable path to building a successful SaaS product that can ultimately turn into a healthy business. I’ve been talking a lot about SaaS economics lately. And I’ve been beating up quite a bit, the sassy unicorn model that’s startups that are trying to vie for ultimately a valuation of greater than a billion dollars.
I’ve talked about the ridiculously low odds of being able to do that successfully and why I think people should not vie for that or attempt that strategy. But one I wanna talk about today instead is essentially what you should do in place of a strategy like that. Cause that is so ineffective.
essentially, what’s the better way to do it? And I wanna talk more about that and my coming episodes are gonna dive in even deeper as well too. But before I do, I wanna talk about ultimately what are the biggest bottlenecks to success here, and ultimately why the majority of those startups that are trying to vie for that unicorn status ultimately fail.
And it’s two particular bottlenecks. It’s time, it’s money, or it can be both, as in most of. Either run out of time money, or both of those two de limiting factors in terms of being able to achieve success with their SaaS product or their startup company as such. I really think those are what we need to treat like those are at the root of ultimately what prevents those attempts from being successful.
I’ve been there many times with the study and the research that I’ve done around how many, just how many of these companies have. actually relatively close to reaching product market fit when they run out of one or both of these resources, which is super unfortunate. This timer starts if you go down the traditional path of raising through the investor community where you need to figure it out by a period of time.
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And I think that pressure is both unhealthy and also leads to significantly worse outcomes for these projects. So I’ve made that point. What I wanna talk about now is what’s a better way to do that? Well, first and foremost, I wanna put control. I wanna take control out of the hands of the investor community indirectly through what they’re providing you with in order to run your company.
Because in my opinion, there’s so much wrong with that model. But I want to give that control back to you. I want you to have the time that you need, and I want you to have the budget that you need to invest successfully and build a SaaS product. Or this as a business, but with you in control essentially the whole time.
So I wanna share a strategy that I know works because I’ve leveraged it myself to build several of my own product companies, and that’s, I recommend folks work in the industry for which they’re intending to build their SaaS or the product in this question. In this case, this gives you the opportunity to continually learn more about the.
So you’ll be regularly doing research and getting greater context around the problems worth solving as I like to refer to them. But at the same time, you’re solving for these elder bottlenecks because you will be earning what you need to essentially earmark what you can invest into your project. as well as enabling your lifestyle.
You don’t have to put your life entirely on hold and eat only ramen noodles every night for however long until you crash and burn, which is what happens to most of the companies trying this model. It will be much more sustainable. Right. So that solves for kind of the money element. Let’s talk about the time piece as well too.
Now, a certain amount of discovery. A really critically important factor when you’re starting a project like this. So working in industry is gonna give you an opportunity to gather some of that naturally as you’re doing the work that that job essentially requires. But at the same time, you are gonna have a balance of time and the choice in terms of what you want to do with it.
So with that balance of time that you. Outside of working in industry, you can invest that in your project as little or as much as you want over time. So this essentially stops the clock on the time limit as well as it puts you in control of the funding source that goes into your project until you can reach a certain level of scale or progress, and then ultimately decide whether or not you want to shift the balance of working in industry and working on your SaaS product and building that into a successful.
I think this transition and this strategy makes a lot more sense, and like I said earlier, I’ve leveraged it to build my product companies, both staff geek and podcast chef, using this very same model with much greater success and bonus points. I’ve also done it without any outside investment from the investor community.