Why Do Most SaaS Startups Fail? Here Are The 5 Major Reasons

Why Do Most SaaS Startups Fail? Here Are The 5 Major Reasons

“You’re not suppose to succeed!”

“The numbers are against you from day one.”

Those were the words hurled at me across the board room from one of my mentors.

Encouraging, right?

Up until that point I had so much confidence that failure wasn’t an option.

But the truth is – and you hear it all the time – most startups fail.

His words set me down a path of learning and implementing strategies to help protect me, my stakeholders, and my coaching clients  from the 5 highest leading causes of startup death.

Over the years, I’ve had the chance to see the inner workings of 1000+ companies.

I’ve listened to the intimate, behind-the-scenes details and decisions from the founders behind them.  

After seeing what works, what doesn’t, and what gives you a one-way ticket to the SaaS graveyard…

I’ve distilled those lessons into the big five for this week’s video.



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● No Cost Product Development & True Customer Validation
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● How to Engineer Your Big Money Exit

When I sit back and look at my failures and those of my friends, I believe they can be traced back to one or more of these.

  1. Market Problems
  2. Business Model Failure
  3. Poor Management Team
  4. Running out of Cash
  5. Product Problems

What’s hilarious, and part of #3, is the amount of companies that fail due to co-founder in-fighting…

… meaning they couldn’t see eye to eye on a critical part of the business (funding, product roadmap, market strategy, etc).

The one I see the most often when it comes to technology and innovation is #1…

… founders running around with some cool tech, with no clear customer problem to solve.

It’s a solution in search of a problem.

Always a scary proposition and the opposite of the way I encourage first time founders to start off (find customers before you develop your tech).

If you’ve got questions about either one of these five, be sure to leave a comment with the specifics and I’ll help you turn things around.

Keep up the hustle!


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