Most saas startup failures don’t come from one big disaster. They come from small, avoidable choices that compound over time: building the wrong thing, charging too little, hiding in “busy work,” or assuming growth will happen on its own.
The advice below comes from a founder who’s built and sold multiple companies, written three books on startups, and invested in 100+ businesses. It’s a practical list of mistakes that show up with brand-new founders and also with experienced teams who should know better.
If you’re early-stage, these are the kinds of errors that quietly drain months (and motivation) before you notice.
Why listen to this advice?
This perspective is grounded in real operator experience, not theory:
- Built startups and had multiple exits
- Wrote three books about building startups
- Invested in 100+ companies
- Runs a SaaS bootstrapper accelerator
Mistake #1: Building something no one cares about
The problem with “no external validation”
A common pattern goes like this: a founder disappears for months, builds in isolation, and comes back with a finished product they think people will want. The issue is simple: they didn’t confirm anyone else will use it, and they didn’t confirm anyone will pay for it.
Even if you’re scratch your own itch, that’s not the same thing as proof. You still need to know (1) who else has the problem and (2) whether you can reach them in a repeatable way.
This is the most common mistake because it feels productive. Shipping software feels like progress, even when it’s pointed at the wrong target.
If you’re working through early fit questions, this breakdown of common SaaS product-market-fit pitfalls pairs well with this section.
How to avoid it
Before you commit months of build time, get signals from the outside world:
- Talk to potential customers about the problem (not your solution)
- Test whether they’ll pay, not whether they “like the idea”
- Confirm you can actually reach these people consistently (content, outbound, partnerships, ads, community, etc.)
Mistake #2: Underpricing your product
Why pricing is the biggest multiplier in SaaS
In SaaS, subscription revenue is powerful because it stacks. The downside is that small pricing decisions can lock you into tiny revenue for a long time.
Founders often underprice because they undervalue:
- The results the product creates
- The time and effort invested in building it
Why cloning and undercutting usually fails
A lot of founders scan competitors and think, “If I’m 10% to 30% cheaper, customers will switch.” In B2B, price matters, but it’s rarely the only factor. Teams also care about trust, risk, support, switching costs, and whether the product actually improves outcomes.
Sometimes charging the same as competitors, or even more, can help. A higher price can signal quality, seriousness, and stability.
Mistake #3: Trying to be too innovative
Simple twists beat “reinventing everything”
There are tons of B2B SaaS opportunities where the best product is not a brand-new invention. It’s a better version of something clunky, outdated, or ignored for years.
A “simple twist” can be plenty:
- A cleaner user interface
- Faster workflows
- Better reporting
- A tighter focus on one segment
SaaS is rarely winner-take-all
In many SaaS categories, you don’t need to be the first player to build a great business. You can be second, third, or fourth and still grow fast, if the market is large enough and your positioning is sharp.
Excel is a signal, not a competitor
If a business is using Excel to manage a real workflow, that’s often a green light. Replacing spreadsheets doesn’t require building something massive. It often means being just better enough that teams can collaborate and move faster.
A good replacement usually does three things well:
- It’s a bit better than a spreadsheet
- It helps people coordinate (shared visibility, handoffs, reminders)
- It reduces time to get the job done
Mistake #4: Assuming a good product will sell itself
Marketing and sales still apply
Many founders believe that if the product is obviously better than pen-and-paper, Excel, or an old competitor, people will naturally show up. They won’t.
Two jobs still exist:
- Let people know it exists
- Convince them it’s a better option
That’s marketing and sales, even if you don’t call it that.
Don’t copy the exceptions
Some brands look like they “built it and customers came.” Those cases are rare. Most products need real promotion. Even companies that seem to avoid marketing are often doing marketing so well it doesn’t feel like marketing.
Mistake #5: Working on the easy things (instead of what grows the business)
It’s easy to spend weeks in your comfort zone:
- Redesign the homepage again
- Start a podcast because you’re good on a mic
- Build more features because you’re a developer
None of those are “bad.” They’re just often the wrong priority early on.
The harder work tends to be what produces growth:
- Trying new marketing approaches and sticking with them long enough to learn
- Analyzing and improving your funnel
- Running demos
- Asking for the sale (even when it feels awkward)
A useful mindset here is time compression: in a startup, every week is like a month, and every month is like a quarter. Slow weeks add up fast.
Mistake #6: Moving too slowly
Startups can’t match big incumbents on resources. They can win on speed.
That speed needs to show up everywhere:
- Shipping improvements
- Publishing content
- Testing acquisition channels
- Running ad experiments
- Tweaked onboarding and activation
If your pace looks like a Fortune 1000 cadence, you’re giving away one of the few real advantages you have.
Mistake #7: Waiting too long to hire
Even bootstrapped companies benefit from hiring earlier than feels comfortable.
A common reason founders delay hiring is control: “No one can do it as well as I can.” Sometimes that’s true, but it can still be the wrong choice. Holding everything keeps you strapped to support tickets, slows releases, and limits growth.
It also makes the business less enjoyable. Solo grinding can get lonely, and it’s hard to stay motivated when you’re the only one carrying the load.
A practical approach:
- Hire support early (someone technical enough to help customers and escalate patterns)
- Then add development help when you’re becoming the bottleneck
- Set up a system where customer insights still reach you
Mistake #8: Fundraising too early
The idea here is simple: build the business instead of the slide deck. The best pitch is traction, especially MRR.
Raising money with only an idea can backfire:
- You sell more of the company at a lower valuation
- You can burn cash before product-market fit
- You start “spending because it’s there,” not because the spend is proven
There’s a real risk in not knowing whether product-market fit will take 3 months or 27 months. Cash can disappear long before clarity arrives.
If you’re weighing funding paths, this guide on what investors really look for is a helpful reality check.
Mistake #9: Not vesting founder equity
This is a classic startup trap: founders split equity up front (50/50 or thirds), and nobody vests.
Then someone leaves six months later. Now a huge chunk of the cap table belongs to someone who isn’t working on the business.
Vesting fixes that by making equity earned over time. It protects the company and the founders who stay.
Mistake #10: Thinking in months, not years
SaaS grows differently than old-school software. You often can’t charge $1,000 up front. You might charge $30 a month and earn that over many months.
That means:
- Revenue builds slowly
- It takes more customers to reach meaningful MRR
- Product-market fit can take a long time
If you expect to hit product-market fit in a few months, or reach $10k MRR in a few months, you’re setting yourself up for frustration. Those “overnight” stories are rare.
The more realistic plan is to commit to years, and build systems that keep you in the game long enough to win.
What I learned from my own projects (the hard way)
On my first small SaaS attempt, I treated building as the job. I kept polishing flows, fixing edge cases, and adding “one more feature” because it felt safe. The uncomfortable work (asking for feedback, pitching, pricing) always got pushed to tomorrow.
Two things became obvious fast:
- Silence isn’t validation. If nobody is reacting, it’s not neutral. It’s a signal I’m not in the market enough.
- Busy work is a hiding place. A nicer homepage doesn’t fix unclear positioning.
- Momentum comes from hard conversations. The moments that actually moved things forward were user calls and direct asks.
If you tend to build alone, it also helps to notice how isolation slows decisions. This piece on why isolation kills startups captures that dynamic well.
Conclusion
A saas startup doesn’t need perfect decisions to succeed, but it does need avoidable mistakes kept to a minimum. Validate before you build, price like your product creates real outcomes, and don’t confuse comfort-zone work with growth. Move faster than incumbents, hire before you burn out, and don’t let fundraising distract you from traction. Most of all, plan in years, not months, because steady progress beats short bursts every time.
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