Mistakes to avoid when building a successful SaaS startup in Nigeria: From the idea phase through scalability, building a SaaS (Software as a Service) startup goes through several stages.
According to statistics, most SaaS firms fail within three years, and this is even more true in Nigeria, where founders confront even more hurdles than their foreign counterparts. The good news is that, despite the challenges, it is quite possible to launch a profitable SaaS company. iROKO Partners, Kobo360, TradeDepot, and SeamlessHR, are just a few of the successful SaaS startups in Nigeria in recent years.
I’ve identified three primary phases that SaaS businesses go through in this article and the common mistakes that lead to failure during these periods. They are discussed below:
1. Value Creation / The right product
The usefulness of the product is a fundamental facilitator that should be considered immediately after the idea of a Saas product springs up. Founders with the intent of having Startups that become and remain lucrative should focus on solving a pressing problem.
Value Creation starts from an Idea; the idea must relate to an urgent need, and the urgent need must have a ready market. I’ve pointed out a few mistakes startups make in this phase and practical solutions
Mistake 1: The notion that there’s no unique idea out there.
Solution: Your idea must be a unique solution to a big problem. Do not be scared that you’ll never get any extraordinary idea; the world’s problems are growing bigger each day, and there must be solutions. However, make sure your idea solves a frequent problem; that’s where the market is.
Mistake 2: Tech guys are usually obsessed with how their products solve technical problems.
Solution: For SaaS startups to be profitable, they must make customers happy. Customers pay for products that satisfy them, not solve technical problems they might not know to exist.
Mistake 3: My network said it was a good idea.
Solution: Every idea you’ll think of selling is terrible unless the customers say otherwise. Profitable SaaS products are built based on market research. Your product must have a big market, or the startup is close to impending failure.
2. Monetization
Monetization is all about marketing. Good products do not sell themselves, and you can a fantastic product solving a relevant problem and huge market potential with no conversion. Here are a few mistakes startups make in this phase.
Mistake 1: Thinking fancy designs and terrific products will sell automatically.
Solution: No, it won’t! Fancy designs are just fabulous; SaaS startups must prioritize sales. You’ll have to go to your users and give them these fantastic solutions.
Mistake 2: I made a great pitch; he seems interested!
Solution: I made a great pitch; he bought/subscribed to our product! Every great pitch must convert to sales.
3. Scaling
You’re now expecting to hit those exponential growth objectives soon after you’ve built a great product from that great idea and got that increasing subscriber base.
Three years later and you realize, ‘we’re stuck!’ Most startups, especially SaaS startups, get stuck at this phase. Scalability is possible, and to help you, here are a few mistakes you should be on the lookout for and solutions.
Mistake 1: Startups spend 70% of their time and efforts fundraising.
Solution: It’s not wrong to spend time and effort fundraising; funds are vital to build and scale your products. The problem is every bit of technology, story, and resource is used for developing great concepts that make great pitches, not on products. It becomes ideation and no iteration.
Mistake 2: “There are seven billion people in the world, our app should get at least 100,000 subscribers“
Solution: There are probably over 20 companies providing similar services and selling similar products. Startups must avoid thinking that the market is sitting still waiting for them. Competition exists, and startups must focus on getting every one subscriber. Build from the ground up.
4. Final Words
I’ve covered just a few answers to why most SaaS startups fail? The mistakes covered in this article are prevalent mistakes most SaaS startups make in their early stages. SaaS startups on the lookout for these are headed towards success and profitability.