Avoid These BIG Risks When Building SaaS (Wish I Knew This Sooner)

our ecosystem of SAS startups is our ecosystem of SAS startups is littered with failures there are so many littered with failures there are so many littered with failures there are so many mistakes that are easy to make and that mistakes that are easy to make and that mistakes that are easy to make and that are very commonly made by people who are very commonly made by people who are very commonly made by people who haven't been listening to those of us haven't been listening to those of us haven't been listening to those of us who have gone before them you know there who have gone before them you know there who have gone before them you know there were Pioneers that have the arrows in were Pioneers that have the arrows in were Pioneers that have the arrows in their back so to speak and you don't their back so to speak and you don't their back so to speak and you don't have to learn all these hard lessons on have to learn all these hard lessons on have to learn all these hard lessons on your own that's why in this video I'm your own that's why in this video I'm your own that's why in this video I'm going to talk about major mistakes that going to talk about major mistakes that going to talk about major mistakes that I see Killing most SAS efforts these are I see Killing most SAS efforts these are I see Killing most SAS efforts these are things I wish I knew years ago I'm Rob things I wish I knew years ago I'm Rob things I wish I knew years ago I'm Rob Walling I'm a Serial entrepreneur with Walling I'm a Serial entrepreneur with Walling I'm a Serial entrepreneur with multiple exits I've written four books multiple exits I've written four books multiple exits I've written four books on building startups and I've invested on building startups and I've invested on building startups and I've invested in almost in almost in almost 150 companies so the traditional wisdom 150 companies so the traditional wisdom 150 companies so the traditional wisdom around Silicon Valley about the risks of around Silicon Valley about the risks of around Silicon Valley about the risks of tech startups is that there are three tech startups is that there are three tech startups is that there are three risks Market technology and execution so risks Market technology and execution so risks Market technology and execution so Market is whether there are enough Market is whether there are enough Market is whether there are enough people or businesses that want to use people or businesses that want to use people or businesses that want to use your product to make it financially your product to make it financially your product to make it financially viable technology is whether you are viable technology is whether you are viable technology is whether you are able to build this technology you can able to build this technology you can able to build this technology you can imagine trying to build Google in 1998 imagine trying to build Google in 1998 imagine trying to build Google in 1998 you can imagine trying to to build open you can imagine trying to to build open you can imagine trying to to build open AI or chat GPT five years ago there's a AI or chat GPT five years ago there's a AI or chat GPT five years ago there's a real question of do we have the ability real question of do we have the ability real question of do we have the ability to build this is it even possible or to build this is it even possible or to build this is it even possible or trying to build Tesla a purely electric trying to build Tesla a purely electric trying to build Tesla a purely electric car that actually has great performance car that actually has great performance car that actually has great performance and decent range back in whatever 2010 and decent range back in whatever 2010 and decent range back in whatever 2010 or 2005 before it was done there's a or 2005 before it was done there's a or 2005 before it was done there's a real question in those startups of real question in those startups of real question in those startups of whether those things can be built at all whether those things can be built at all whether those things can be built at all and the third risk is execution can you and the third risk is execution can you and the third risk is execution can you build an amazing team that can build it build an amazing team that can build it build an amazing team that can build it and then can Market it can get it out and then can Market it can get it out and then can Market it can get it out there market sell it go to market all there market sell it go to market all there market sell it go to market all the things we talk about on this channel the things we talk about on this channel the things we talk about on this channel but if we narrow our Focus to mostly

but if we narrow our Focus to mostly but if we narrow our Focus to mostly bootstrap SAS and software companies the bootstrap SAS and software companies the bootstrap SAS and software companies the technology risk pretty much goes out the technology risk pretty much goes out the technology risk pretty much goes out the window there are probably a handful of window there are probably a handful of window there are probably a handful of the thousands and thousands of B2B SAS the thousands and thousands of B2B SAS the thousands and thousands of B2B SAS companies that I've seen over the past companies that I've seen over the past companies that I've seen over the past several years that actually have several years that actually have several years that actually have technology risk because building B2B SAS technology risk because building B2B SAS technology risk because building B2B SAS is a solved problem now I'm not saying is a solved problem now I'm not saying is a solved problem now I'm not saying it's not difficult to do I'm not saying it's not difficult to do I'm not saying it's not difficult to do I'm not saying it's not complicated but the question of it's not complicated but the question of it's not complicated but the question of can I build this project management can I build this project management can I build this project management software for car dealerships can I build software for car dealerships can I build software for car dealerships can I build this invoicing software for construction this invoicing software for construction this invoicing software for construction managers the answer is inevitably yes managers the answer is inevitably yes managers the answer is inevitably yes you can the risk of you being able to you can the risk of you being able to you can the risk of you being able to build it is not something we should even build it is not something we should even build it is not something we should even be discussing by far the two major risks be discussing by far the two major risks be discussing by far the two major risks when you're talking about mostly when you're talking about mostly when you're talking about mostly bootstrap SAS companies is market and bootstrap SAS companies is market and bootstrap SAS companies is market and the ability to sell it I'll say it's the ability to sell it I'll say it's the ability to sell it I'll say it's marketing slash sales so let's start by marketing slash sales so let's start by marketing slash sales so let's start by looking at the market the real question looking at the market the real question looking at the market the real question is do enough people have the problem is do enough people have the problem is do enough people have the problem that you're trying to solve and then are that you're trying to solve and then are that you're trying to solve and then are they willing to pay for that and that's they willing to pay for that and that's they willing to pay for that and that's why on this channel and on my podcast why on this channel and on my podcast why on this channel and on my podcast startups for the rest of us and at startups for the rest of us and at startups for the rest of us and at microconf a lot of discussion is given microconf a lot of discussion is given microconf a lot of discussion is given to are you building something that to are you building something that to are you building something that people want and are willing to pay for people want and are willing to pay for people want and are willing to pay for answering that question is a lot harder answering that question is a lot harder answering that question is a lot harder than you might think one reason is that than you might think one reason is that than you might think one reason is that as Founders we often get a little too as Founders we often get a little too as Founders we often get a little too clever and we don't just want to build clever and we don't just want to build clever and we don't just want to build an incremental Improvement on an an incremental Improvement on an an incremental Improvement on an existing SAS app or an existing startup existing SAS app or an existing startup existing SAS app or an existing startup we want to build something completely we want to build something completely we want to build something completely new completely novel something no one's new completely novel something no one's new completely novel something no one's ever used before no other product is in ever used before no other product is in ever used before no other product is in this category we want to build our own this category we want to build our own this category we want to build our own category because then we'll have no category because then we'll have no category because then we'll have no competition I've done this I've seen

competition I've done this I've seen competition I've done this I've seen Founders do it unless you have years and Founders do it unless you have years and Founders do it unless you have years and years and millions of dollars to educate years and millions of dollars to educate years and millions of dollars to educate an entire Market on a brand new category an entire Market on a brand new category an entire Market on a brand new category don't do it many of the most successful don't do it many of the most successful don't do it many of the most successful bootstrapped and mostly bootstrap SAS bootstrapped and mostly bootstrap SAS bootstrapped and mostly bootstrap SAS companies that I encounter through companies that I encounter through companies that I encounter through microcomp tinyseed this YouTube channel microcomp tinyseed this YouTube channel microcomp tinyseed this YouTube channel and my podcast are folks who either take and my podcast are folks who either take and my podcast are folks who either take an idea and improve upon it enough to an idea and improve upon it enough to an idea and improve upon it enough to make it unique and then they market and make it unique and then they market and make it unique and then they market and sell the hell out of it or it's folks sell the hell out of it or it's folks sell the hell out of it or it's folks who enter a crowded space against big who enter a crowded space against big who enter a crowded space against big competitors and they figure out what competitors and they figure out what competitors and they figure out what everyone hates about those competitors everyone hates about those competitors everyone hates about those competitors and they carve out their positioning and they carve out their positioning and they carve out their positioning their corner of the market where they their corner of the market where they their corner of the market where they have competition in the broader space have competition in the broader space have competition in the broader space but they don't have competition in their but they don't have competition in their but they don't have competition in their little corner of the market they are the little corner of the market they are the little corner of the market they are the best and what they do now that's for best and what they do now that's for best and what they do now that's for multi-million dollar SAS companies multi-million dollar SAS companies multi-million dollar SAS companies obviously there are step one businesses obviously there are step one businesses obviously there are step one businesses where you can find your little corner of where you can find your little corner of where you can find your little corner of an ecosystem an existing App Store so to an ecosystem an existing App Store so to an ecosystem an existing App Store so to speak with Shopify Heroku or WordPress speak with Shopify Heroku or WordPress speak with Shopify Heroku or WordPress and in those you don't necessarily need and in those you don't necessarily need and in those you don't necessarily need to have the best positioning you can to have the best positioning you can to have the best positioning you can often just rank number one in the App often just rank number one in the App often just rank number one in the App Store but I'm talking about being an Store but I'm talking about being an Store but I'm talking about being an ambitious bootstrapper and wanting to ambitious bootstrapper and wanting to ambitious bootstrapper and wanting to grow into the millions But to answer grow into the millions But to answer grow into the millions But to answer this question of if I build this will this question of if I build this will this question of if I build this will people want it and will they pay for it people want it and will they pay for it people want it and will they pay for it we go back to validation right and we go back to validation right and we go back to validation right and that's why we have more than one video that's why we have more than one video that's why we have more than one video on how to validate SAS ideas whether on how to validate SAS ideas whether on how to validate SAS ideas whether you're doing High touch or low touch you're doing High touch or low touch you're doing High touch or low touch there are ways using landing pages I've there are ways using landing pages I've there are ways using landing pages I've talked about as well as having talked about as well as having talked about as well as having one-on-one conversations and trying to one-on-one conversations and trying to one-on-one conversations and trying to figure that out this will never get you figure that out this will never get you figure that out this will never get you to 100 certainty don't expect that to 100 certainty don't expect that to 100 certainty don't expect that you'll have 100 confidence because being you'll have 100 confidence because being you'll have 100 confidence because being a startup founder is doing hard things a startup founder is doing hard things a startup founder is doing hard things and making hard decisions with and making hard decisions with and making hard decisions with incomplete information it's inevitable

incomplete information it's inevitable incomplete information it's inevitable at best you will get to 40 50 maybe 60 at best you will get to 40 50 maybe 60 at best you will get to 40 50 maybe 60 validation but no matter how many people validation but no matter how many people validation but no matter how many people tell you yes and how many email tell you yes and how many email tell you yes and how many email subscribers you get to your landing page subscribers you get to your landing page subscribers you get to your landing page you can still fail so this part is you can still fail so this part is you can still fail so this part is difficult but I think it's something difficult but I think it's something difficult but I think it's something that the most people struggle with that the most people struggle with that the most people struggle with because they come up with an idea and because they come up with an idea and because they come up with an idea and they build it without validating they build it without validating they build it without validating therefore this huge Market risk is just therefore this huge Market risk is just therefore this huge Market risk is just looming over them the entire time so I looming over them the entire time so I looming over them the entire time so I mentioned our two risks are Market which mentioned our two risks are Market which mentioned our two risks are Market which I just discussed test and then marketing I just discussed test and then marketing I just discussed test and then marketing slash sales which I think will summarize slash sales which I think will summarize slash sales which I think will summarize as can you sell it based on this great as can you sell it based on this great as can you sell it based on this great tweet from Ruben Gomez the founder of tweet from Ruben Gomez the founder of tweet from Ruben Gomez the founder of sign well in his tweet Reuben says when sign well in his tweet Reuben says when sign well in his tweet Reuben says when starting a new SAS everyone tries to starting a new SAS everyone tries to starting a new SAS everyone tries to answer the question will people buy this answer the question will people buy this answer the question will people buy this that's really what I was talking about that's really what I was talking about that's really what I was talking about in the first part of this video then in the first part of this video then in the first part of this video then Reuben says not enough people are asking Reuben says not enough people are asking Reuben says not enough people are asking can I sell this which is number one can can I sell this which is number one can can I sell this which is number one can I sell in the ways it's most likely to I sell in the ways it's most likely to I sell in the ways it's most likely to be bought by ideal customers and number be bought by ideal customers and number be bought by ideal customers and number two can I sell enough at the price point two can I sell enough at the price point two can I sell enough at the price point it will be sold at and he goes on in a it will be sold at and he goes on in a it will be sold at and he goes on in a later tweet to say these things are not later tweet to say these things are not later tweet to say these things are not binary and there's always an element of binary and there's always an element of binary and there's always an element of having to figure it out this is why having to figure it out this is why having to figure it out this is why although I love the sentiment and the although I love the sentiment and the although I love the sentiment and the Simplicity of Paul Graham's quote he's Simplicity of Paul Graham's quote he's Simplicity of Paul Graham's quote he's the founder of Y combinator and his the founder of Y combinator and his the founder of Y combinator and his quote is build something people want and quote is build something people want and quote is build something people want and they have it on a T-shirt and I love it they have it on a T-shirt and I love it they have it on a T-shirt and I love it but I've always added and are willing to but I've always added and are willing to but I've always added and are willing to pay for build something people want and pay for build something people want and pay for build something people want and are willing to pay for because for us in are willing to pay for because for us in are willing to pay for because for us in our B2B SAS world we need companies our B2B SAS world we need companies our B2B SAS world we need companies willing to pay for our solution we don't willing to pay for our solution we don't willing to pay for our solution we don't make money money based on daily active make money money based on daily active make money money based on daily active users or running advertising in our SAS users or running advertising in our SAS users or running advertising in our SAS apps if no one is willing to pay for it apps if no one is willing to pay for it apps if no one is willing to pay for it even if you solve a problem that they

even if you solve a problem that they even if you solve a problem that they need solved but they're not willing to need solved but they're not willing to need solved but they're not willing to Fork over enough money to keep you Fork over enough money to keep you Fork over enough money to keep you financially viable you don't have a financially viable you don't have a financially viable you don't have a business and that's where this selling business and that's where this selling business and that's where this selling risk or this marketing risk comes into risk or this marketing risk comes into risk or this marketing risk comes into play it is completely possible to build play it is completely possible to build play it is completely possible to build something that solves a real problem and something that solves a real problem and something that solves a real problem and you clear the first hurdle of the race you clear the first hurdle of the race you clear the first hurdle of the race but then as a Founder you can't actually but then as a Founder you can't actually but then as a Founder you can't actually get in front of enough prospects or find get in front of enough prospects or find get in front of enough prospects or find a sales channel to make this work and a a sales channel to make this work and a a sales channel to make this work and a big part of this is stages of awareness big part of this is stages of awareness big part of this is stages of awareness so I'm gonna go into this amazing so I'm gonna go into this amazing so I'm gonna go into this amazing concept that was introduced by Eugene concept that was introduced by Eugene concept that was introduced by Eugene Schwartz in his book breakthrough Schwartz in his book breakthrough Schwartz in his book breakthrough advertising Schwartz was an advertising advertising Schwartz was an advertising advertising Schwartz was an advertising exec in the 1960s and he came up with exec in the 1960s and he came up with exec in the 1960s and he came up with these stages of awareness there are five these stages of awareness there are five these stages of awareness there are five of them and depending on where your of them and depending on where your of them and depending on where your Market is in terms of your solution your Market is in terms of your solution your Market is in terms of your solution your product that you've built the climb up product that you've built the climb up product that you've built the climb up that mountain pushing the boulder that mountain pushing the boulder that mountain pushing the boulder getting people to use your product and getting people to use your product and getting people to use your product and pay for it will be harder or easier pay for it will be harder or easier pay for it will be harder or easier depending on which stage people are at depending on which stage people are at depending on which stage people are at and the further along they get the and the further along they get the and the further along they get the easier it gets so the first stage is easier it gets so the first stage is easier it gets so the first stage is being unaware people don't know they being unaware people don't know they being unaware people don't know they even have this problem so I like to even have this problem so I like to even have this problem so I like to think about podcasting for example these think about podcasting for example these think about podcasting for example these days a lot of businesses have podcasts days a lot of businesses have podcasts days a lot of businesses have podcasts even as recent as 2015 2016 did even as recent as 2015 2016 did even as recent as 2015 2016 did businesses know that they should start a businesses know that they should start a businesses know that they should start a podcast to promote their business most podcast to promote their business most podcast to promote their business most didn't they were completely unaware that didn't they were completely unaware that didn't they were completely unaware that they had this quote-unquote problem they had this quote-unquote problem they had this quote-unquote problem right or that they had this need or this right or that they had this need or this right or that they had this need or this marketing channel that they could marketing channel that they could marketing channel that they could potentially take advantage of and in potentially take advantage of and in potentially take advantage of and in this case if they're unaware education this case if they're unaware education this case if they're unaware education is very expensive just to get them to is very expensive just to get them to is very expensive just to get them to believe that they have a problem is a believe that they have a problem is a believe that they have a problem is a huge uphill battle but if your prospects

huge uphill battle but if your prospects huge uphill battle but if your prospects your leads your Market is already aware your leads your Market is already aware your leads your Market is already aware of the problem it gets a little easier of the problem it gets a little easier of the problem it gets a little easier because then all you have to do is because then all you have to do is because then all you have to do is educate them on the solutions that exist educate them on the solutions that exist educate them on the solutions that exist so people and businesses and markets so people and businesses and markets so people and businesses and markets often move independently but kind of as often move independently but kind of as often move independently but kind of as a group from unaware to being problem a group from unaware to being problem a group from unaware to being problem aware then to being solution aware and aware then to being solution aware and aware then to being solution aware and this is where they know they have a this is where they know they have a this is where they know they have a problem maybe it's I need more customers problem maybe it's I need more customers problem maybe it's I need more customers or I need to communicate or we want to or I need to communicate or we want to or I need to communicate or we want to communicate our mission or you know communicate our mission or you know communicate our mission or you know communicate our product to more people communicate our product to more people communicate our product to more people and then they start realizing oh one and then they start realizing oh one and then they start realizing oh one solution is to start a podcast and so in solution is to start a podcast and so in solution is to start a podcast and so in 2020 as the pandemic descended upon all 2020 as the pandemic descended upon all 2020 as the pandemic descended upon all of our lives and put us into quarantine of our lives and put us into quarantine of our lives and put us into quarantine suddenly there's became this need I need suddenly there's became this need I need suddenly there's became this need I need to start a podcast for my business now to start a podcast for my business now to start a podcast for my business now I'm aware that's the solution and a lot I'm aware that's the solution and a lot I'm aware that's the solution and a lot of people and businesses move from that of people and businesses move from that of people and businesses move from that third step of solution aware to product third step of solution aware to product third step of solution aware to product aware right that's stage four which is aware right that's stage four which is aware right that's stage four which is going to Google or going these days to going to Google or going these days to going to Google or going these days to chat TPT typing in what software do I chat TPT typing in what software do I chat TPT typing in what software do I need to start a podcast right they had need to start a podcast right they had need to start a podcast right they had search intent and if you think about search intent and if you think about search intent and if you think about someone who doesn't even know that there someone who doesn't even know that there someone who doesn't even know that there are podcasts they're completely aware are podcasts they're completely aware are podcasts they're completely aware they have a problem they aren't aware of they have a problem they aren't aware of they have a problem they aren't aware of any solutions and then they get to the any solutions and then they get to the any solutions and then they get to the point where oh I'm now searching how do point where oh I'm now searching how do point where oh I'm now searching how do I host a podcast what software do I need I host a podcast what software do I need I host a podcast what software do I need what equipment do I need that intent is what equipment do I need that intent is what equipment do I need that intent is huge and this is one reason why Google huge and this is one reason why Google huge and this is one reason why Google has made one of the most incredible has made one of the most incredible has made one of the most incredible money printing machines in the world and money printing machines in the world and money printing machines in the world and in the history of of humankind Google is in the history of of humankind Google is in the history of of humankind Google is an incredible product because once an incredible product because once an incredible product because once people start to become solution aware people start to become solution aware people start to become solution aware and product aware often go to a search and product aware often go to a search and product aware often go to a search engine and this is where you want to get engine and this is where you want to get engine and this is where you want to get in front of them this is where people in front of them this is where people in front of them this is where people need much less education you just need

need much less education you just need need much less education you just need to educate them on how they need to get to educate them on how they need to get to educate them on how they need to get from y to Z rather than a to z because from y to Z rather than a to z because from y to Z rather than a to z because they're already so close to taking they're already so close to taking they're already so close to taking action they're way further down the action they're way further down the action they're way further down the purchase funnel and then just to cap it purchase funnel and then just to cap it purchase funnel and then just to cap it off most aware which is stage five is off most aware which is stage five is off most aware which is stage five is where you become kind of an expert in where you become kind of an expert in where you become kind of an expert in the space maybe you're a consultant in the space maybe you're a consultant in the space maybe you're a consultant in the podcast hosting space or you are the the podcast hosting space or you are the the podcast hosting space or you are the founder of a company in the space such founder of a company in the space such founder of a company in the space such as let's say Craig Hewitt who runs as let's say Craig Hewitt who runs as let's say Craig Hewitt who runs castos which is podcast hosting or the castos which is podcast hosting or the castos which is podcast hosting or the founders of Squad cast which is studio founders of Squad cast which is studio founders of Squad cast which is studio quality podcast recording it's the quality podcast recording it's the quality podcast recording it's the software that I use to record all of my software that I use to record all of my software that I use to record all of my podcasts so with all of this in mind podcasts so with all of this in mind podcasts so with all of this in mind this question of Can You Reach enough of this question of Can You Reach enough of this question of Can You Reach enough of your Market in a way that makes your your Market in a way that makes your your Market in a way that makes your business financially viable and the business financially viable and the business financially viable and the question is often difficult to answer question is often difficult to answer question is often difficult to answer but envisioning your Market as a certain but envisioning your Market as a certain but envisioning your Market as a certain percentage being unaware certain percentage being unaware certain percentage being unaware certain percentage being problem aware solution percentage being problem aware solution percentage being problem aware solution aware product aware can be really aware product aware can be really aware product aware can be really helpful and if you look at a super early helpful and if you look at a super early helpful and if you look at a super early space let's say the internet or the space let's say the internet or the space let's say the internet or the world wide web in the 1990s a lot of world wide web in the 1990s a lot of world wide web in the 1990s a lot of people just on aware that they had a people just on aware that they had a people just on aware that they had a problem right so they weren't out problem right so they weren't out problem right so they weren't out looking for Solutions I'm going to go to looking for Solutions I'm going to go to looking for Solutions I'm going to go to a website and buy books for example but a website and buy books for example but a website and buy books for example but Amazon raised a bunch of money got in Amazon raised a bunch of money got in Amazon raised a bunch of money got in first and then they were there once first and then they were there once first and then they were there once enough people realized that they needed enough people realized that they needed enough people realized that they needed a solution same can be said for crypto a solution same can be said for crypto a solution same can be said for crypto web 3 AI even drones electric cars you web 3 AI even drones electric cars you web 3 AI even drones electric cars you know there's all these waves of know there's all these waves of know there's all these waves of technology that start with people being technology that start with people being technology that start with people being unaware that they need it and frankly if unaware that they need it and frankly if unaware that they need it and frankly if you're gonna build for the unaware or you're gonna build for the unaware or you're gonna build for the unaware or maybe the problem aware you tend to need maybe the problem aware you tend to need maybe the problem aware you tend to need a lot of money because you need a lot of a lot of money because you need a lot of a lot of money because you need a lot of education and one way to tell that hey education and one way to tell that hey education and one way to tell that hey people are solution aware and product people are solution aware and product people are solution aware and product aware is to go look at Google search aware is to go look at Google search aware is to go look at Google search volumes for Solutions in the space if no volumes for Solutions in the space if no volumes for Solutions in the space if no one is searching for the type of one is searching for the type of one is searching for the type of software you're building or the numbers

software you're building or the numbers software you're building or the numbers are very low it's going to be a lot more are very low it's going to be a lot more are very low it's going to be a lot more expensive and it's going to be a lot expensive and it's going to be a lot expensive and it's going to be a lot riskier to build your product and if riskier to build your product and if riskier to build your product and if you've enjoyed what I've said in this you've enjoyed what I've said in this you've enjoyed what I've said in this video so far you're going to want to video so far you're going to want to video so far you're going to want to watch another video on this channel watch another video on this channel watch another video on this channel called Eight myths SAS Founders should called Eight myths SAS Founders should called Eight myths SAS Founders should never fall for hope you enjoy it