SAAS startups: What are they doing wrong?
Phoenix. One of SAAS's startups founded by Enrique Benitez in 2017 designed as an application to say goodbyes, send final messages and give gratitude to family and loved ones ended up saying its own goodbye less than a year it started. So what went wrong? What needless move did Enrique and other failed SAAS startups make on their Chessboard?
Software as a service (SAAS) is an online automatic software delivery system that serves its client by providing several essential services which cover several niches and segments in the world. These include Application security, software updates, marketing, business models, Artificial intelligence, and technology among many others. After doing a little research on SAAS startups, I felt indisposed about how great and mind-boggling innovations and ideas literally went south in a space of years and some even months after discovery. So why do SAAS startups fail?
SAAS startups: A pawn in the system
There is a tremendous way SAAS startup fails. Below are a few active and excipient ingredients involved.
Money dilemma: No one wants to get ripped or highly devastated like ‘Watu’ who could have probably aced all barriers in the software and hardware industry except for its financial issues. Cash-flow vividly contributes as a dilemma for few SAAS startups. Most times, starting isn’t always the issue but keeping up with the goal is. The cash from personal pockets is often channeled to the branding and infrastructures before the idea itself makes headway. So to avoid running out of cash, future schematics, design, plans have to be laid down. My best nugget would be to avoid personal funding and get incorporated into the royal-based financing (RBF) which allows investors to throw money into the idea for a fixed percentage in the revenue.
Market failure: Here the product or service is not needed by the masses which is caused by inadequate research to find out if the service about to be offered is truly worth going for. Lack of product needed by the market can be curbed by building relationships and accommodating customer feedback as a way of reinvigorating appropriate services.
Management deficiency: Getting the right team and employee can’t be over-emphasized as a startup. Knowing who to hire and when to hire shouldn’t be based on personal feelings; because as a noob in the system, a weak sales team makes strategies and business models decline. Phil Knight (Founder of Nike) made sure of this even with Penny his wife, Bowerman his high school coach, and other members when he was about skyrocketing to being a wealthy Shoe-Dog in the world.
Bad business prototype: Startups need to bring their A-game to whatever service they are providing. Transpose, Adproval, and Ansaro are some of the victims of this limitation. The rate of attrition tends to exceed the growth rate of the service provided which affects the profit level due to reduction and termination of subscriptions from customers. This can be outclassed when the growth rate is of a higher proportion in contrast to the churn rate. By doing this, SAAS startups would surpass competitions in the market as well as work strategically to improve their business models.
