A SaaS Failure Story: what we learned the hard way
About 8 months ago we started building a SaaS in the sales-tech space and raised a small angel round. Long story short: we failed to gain traction and shut down.
Here’s 3 lessons we learned from our failure:
Reduce the mental effort for customers to connect a product feature to more revenue
Our product delivered value. It was just not easy to grasp at first. We had to run demos and extensively explain it before seeing the “aha-moment” in our prospects’ faces.
We haven’t been able to simplify our value proposition and narrow down the use cases enough to instantly convey the value proposition by looking at our website.
Build distribution channels before you have the product
We did quite the opposite. We fell into one of the most famous founder traps: thinking that product is everything. We focused so much on building a polished product that we unconsciously thought that it would have sold by itself.
Don't just stick to your customers' exact words. Dig and get to the underlying core principle
We ran a lot of customer interviews but we didn’t really listen. When a customer told us “I don’t use it because of the UI” we thought we’d need to re-design the product. WRONG. We should have asked follow up questions to determine if he didn’t have a real problem, he didn’t know how to use the product or something else.
Now what?
We still have some runway so we’re working on a new product in the same space. It’s our last chance and we’re committed to do the opposite of what we previously did:
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The value proposition is plain simple: get full b2b contact info on your anonymous high-intent website visitors and build a new acquisition channel off your own website - yep, it’s fully compliant with US laws and regulations;
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Customers are already pre-ordering the product while we’re building it and we’re testing out new sales channels every day - Reddit is driving a lot of traffic
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We are building it entirely based on our experience - we are our own best customers
If you wanna check out our new product and give us a genuine feedback it'd be immensely valuable: www.warmflow.io
Now back to the grind.
Wish us luck!
Awesome Ed! Build distribution channels before is something I learnt in the bad way. Agree and glad to read it from other than me!
Awesome! Did you tested any channel that worked particularly well for you?
Currently I trying X (twitter) and I goes well
Warmflow.io sounds promising! I'll definitely check it out and provide genuine feedback.
Thanks a lot ❤️
Let me know what you think!
I'll check out Warmflow.io and share my thoughts. Good luck on this new endeavor!
Thanks! Let me know what you think :)
Thanks for sharing the learnings and good luck in the new thing! Some thoughts I had, which you can of course feel however about.
Since this is targeting B2B, I'm not sure how well perceived marketing terms like "automagically" and "spray and pray" will sit. Probably shouldn't say "him" specifically either. Maybe an overly uptight take but something I thought about.
The "How it works" section left me wanting more. The section makes sense for how to start using the tool, but I wanted to know at least a little bit more about how you actually get the data and make it useful. Maybe too much secret sauce to expose, though?
Minor UI thing, but there is horizontal scrolling on the whole page, so some element probably just spilling over.
Best of luck!
Ehy thanks so much for the extensive feedback!
Yeah we definitely need to adjust the tone of voice (we're not native).
Also thanks for nothing the horizontal scroll!
I've been there. I closed my data analytics SaaS after three years of struggle. The major challenge for me was determining whether the lack of sales was due to an absence of market demand for the product or if it was because we needed to develop one more feature, hire an additional sales representative, or launch a new campaign. There are always actions that can be taken, and this uncertainty ate away at me from the inside.
I'm curious, have any of you faced similar struggles? If so, how did you deal with them?
I definitely feel you. It was the same for us. In order to take that decision we tried to forecast our sales. We had a sales-led GTM motion and since i was the only one in charge of sales we understood that we would have grown too slowly (to forecast we used some data we had on our sales cycle lenght, conversion rates and made some assumptions). In addition all of our competitors raised millions and heavily invested on SEO and hired sales reps. It was clearly an unfair battle.
Ha, that sounds very familiar. We eventually realized that the target market for our product is like 30 companies. And we already had like 10. So the best we could hope for is x3 our sales which was not nearly enough to break even. And as I was exhausted, I decided to close shop instead of pivoting.
Oh well, you live, you learn! :)
Absolutely! I consider our failure to be one step forward. Now that we're building Warmflow.io we're going 10x faster and avoiding dumb mistakes.
Are you working on something too? :)
Nothing ready for sharing yet :)
The overarching strategy involves developing a distribution channel prior to creating a product. Hence, the primary focus for the upcoming year is to launch and scale an educational YouTube channel for indie hackers. The channel will cover topics such as building a product, analytics, and marketing.
It sounds like a great plan Alex! Pair that with posting on twitter and here and you got a big audience that trust you. That's something invaluable. We're working hard to reach that level of trust too