3 Biggest Challenges for SaaS startups


SaaS or Software-as-a-Service has become a magical buzzword of sorts. You read about all the poster children of SaaS such as Salesforce, Zoho, Qualitrics, Mulesoft or closely follow the 100s of new startups that spring up in new niches of SaaS. Micro-SaaS has apparently also become a thing where you try to build a feature or add-on around an existing full fledged product and sell it on subscription. Most people don’t undertsand that SaaS is just a delivery model for distributing your product to the end customer over internet. Enterprise software is the real market and SaaS one of the delivery models, so unless your product solves some real problem that businesses face, they simply won’t open up their wallets for you.

Another thing about building a successful SaaS business is that it is extremely. Building the product is easy part, but how would you distribute and get it in front of the people is the hard part of the equation. Among 1000s of challenges that every startup face when starting up , 3 top challenges that a SaaS startup typically faces are :

  1. SALES –  How do you reach your customers or how do they find your product, this is the million dollar question. Sales is the biggest bottleneck towards your success and growth.  You make beautiful projections and sales forecasts, but they all fall flat on their face because your sales pipeline and conversion just doesn’t live upto your initial assumptions. Now you are stuck with a product which apparently solves a real problem, and customers will hopefully pay for , but you would never really know as the first sequential step of finding the product-market fit is failed. To really solve the problem having an absolutely great product is necessary condition , but it is not really the sufficient one. A great sales product starts with a great product and then identifying your customer segment with a granular and in depth understanding. Then follow up with whatever sales process that you have defined for your company and stick to it with religious persistence.


  2. Customers –  Another major hurdle that every SaaS startup needs to jump isreducing customer churn. Because customer renewals are so important, reducing customer churn is naturally a concern for SaaS executives. To ensure customers keep coming back, you need to provide an unrivaled customer experience that delights your audience and differentiates your company. Knowing your audience, anticipating their needs, and providing solutions is the formula for happy, satisfied buyers—and when you continuously satisfy buyers, they become loyal customers and loyal customers become brand advocates. Fully maximizing the revenue stream from every customer will allow you to maintain growth, which leads us back to our earlier point about the importance of customer satisfaction.
  3. Product –You need to constantly innovate on the product side once basic foothold is established because new offerings are critical to keeping up with the rapid pace of technological innovation and competition. SaaS executives must always be thinking of the next new product—because a good idea starts a business, but innovation grows it.

There is no silver bullet to solve these challenges, but systematic evidence based inductive approach to tackle these structured and unstructured problems would be helpful.




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