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Why You Can't Fake It Until You Make It

May 11, 2024
Why You Can't Fake It Until You Make It

Faking SaaS til you make SaaS doesn’t work. 

First they build a product. 

Then they get a few customers, usually low hanging fruit and lock them into pre-paid annual contracts. 

Annual contracts create the perception of PMF and low churn. 

Then they raise VC capital because the SaaS metrics look good. 

Then they hire a fleet of salespeople and task them with finding more customers and tripling revenue in one year. 

Then the original customer base churns out as their contracts expire. 

Now the sales team has to rebuild the existing base AND triple it. 

The sales team starts over-selling and over-marketing the product. 

New customers are sold a false illusion to force the deals in. 

Now they have a customer success problem and hire a CS team. 

They task them with finding ways to make the customers happy. 

They spin their wheels because 5 second response times can’t fix a crappy product. 

Now they invest in customer support because they need technical expertise to hack the product to (kind of) work. 

At this point the company has 100 employees and 5 years of technical debt. 

You really can’t fake it til you make it in SaaS. 

You can create that illusion, but it’s just a means to an end. 

Your product and engineering teams need to mature ahead of the rest. 

This never works well in reverse. 

You know the rest of the story.

For those who don’t know how this story ends...

Next they decide to downsize their GTM teams and reduce overhead costs while re-focusing attention to growing and maturing the product and engineering teams.

All with endless monthly pressure from impatient investors who want to see revenue growth, not lines of code. 

Imagine how much easier it would’ve been to focus on the product before taking too much venture capital and promising world-class growth rates for a half-baked product. 

Why does this happen?

I think 3 main reasons:  

1. Founders aren't always great product leaders and ego can stop them from hiring someone who is
2. Lack of patience 
3. Greed

Build first, obsess over customer feedback, and continue iterating the product until there's very few complaints.

Then (and only then) will you be truly ready to scale your GTM teams.

If you need help determining when your product is ready to scale into the market and how/when to make which hires schedule a consultation and I'll be happy to assist.

Happy Selling,

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