Authored by Martijn van der Hoeden, Founder & CEO at PSOhub. PSOhub were finalists in the Best SaaS Product for Project Management, Workflow Automation or PLM, and Best SaaS Product with 1,000+ Licensed Users categories at the 2023 SaaS Awards.

Launching any startup requires a tremendous amount of grit, no matter the industry. SaaS startup founders face their own specific set of challenges, especially when it comes to cash flow and finding a balanced pricing model. 

If you can anticipate some of these from the beginning, you’ll help set up your business to succeed, since countless things you don’t anticipate can happen at any time.

Someone recently asked me what tips I’d give to entrepreneurs who have a great idea and want to offer their solution on the SaaS market. While experience is the best teacher, learning from the adventures and misadventures of others who’ve walked similar paths can arm you with insights for down the road.

In that spirit, here are nine evergreen tips for anyone who is looking to fund and launch their own SaaS startup.

Nine Tips for Founding Your Own SaaS Startup

1. Be unique, but get proof

For your startup to succeed, you have to be unique in some way. I think it’s exceedingly important to prove to yourself that your idea, and your company, is relevant. The only way to get that proof is to have that first success with paying customers and a healthy growth rate.

In my case, PSOhub is an all-in-one project management solution and integrated with your favorite CRM. So that was a unique concept, a blue ocean. Even though that unique selling point is what sets us apart from our competition, it was nothing without the proof, which is happy, paying customers.

2. Go to market as soon as possible

That brings me to the next tip, which is to actually get your solution to market as soon as possible. This is the only way you can get that proof you need to grow and scale your company sustainably. Don’t wait too long to start growing your SaaS business by getting new customers and giving them a delightful experience.

3. After that, be patient

As an entrepreneur, you always expect that you will grow faster, but unfortunately, this is not always the case. I admit I was too positive at the beginning. The truth is that with PSOhub, in the startup phase I had cash flow challenges, more than I expected. I learned patience is important. The SaaS market needs time to absorb your company as a newcomer.

4. Measure your conversation rate obsessively

One of the challenges to founding a SaaS startup that surprised me is how important it is to measure your conversion rate, specifically your micro CTA’s and macro CTA’s. Micro conversions are positive steps that you want to lead to purchase, including ebook downloads, blog subscriptions, and demos (your demo conversion rate is a big one). Macro conversions for SaaS solutions are paid signups, free trial, and request a quote.

Measuring your conversion rates will alert you to how well your marketing is working and how well your website is funneling viewers to purchase. Tracking conversion rates obsessively is a key way for SaaS startups to improve both their sales funnels and their UX.

5. Don’t pay yourself

Be smart by finding people around you whom you need. If you can’t pay them, share some equity. This will keep everybody engaged.

Work on your SaaS startup next to your “normal” job, and go to market as soon as possible. If you personally are not willing to have skin in the game, how can you expect third-party investors to invest in your startup?

6. Invest in onboarding and customer success

Investing in onboarding and customer success is key. The most successful SaaS solutions out there are always user-friendly and easy to onboard across teams. Make sure to be there for your customers right out the gate, ready to help them customize the solution to do what they need it to do. Get friendly, knowledgeable people on board to walk your customers through everything, even if that means taking a call after hours. This will go a really long way in gaining loyalty.

7. Keep your majority in the beginning, if possible

In my own opinion, it’s best to hang on to your majority at the startup phase, if that’s possible. It wasn’t until 16 months that I wanted to accelerate, and I additionally wanted to validate that other investors would also be interested. This was indeed the case. This being said, keeping the majority in this stage was important to me to maintain the overall company vision. Maybe in the next stage I will let this go, if it’s beneficial for our growth rates.

8. Find a balanced pricing model

Keeping your startup afloat while also remaining competitive in your niche can be a tough line to walk, especially if you’re competing against more well-established SaaS solutions. As this HubSpot article aptly suggests, shoot for the best cost-to-value ratio when you’re developing your pricing model. That is, your subscription levels should reflect a high level of customer value for the price.

9. Develop grit

The last and perhaps most important tip for SaaS startup founders is to never give up. Develop grit into your personality. Grit is defined as ‘courage and resolve; strength of character’. This tenacity, this gumption, is what you will need if you want to see your dreams become a reality.

My Background

I spent most of the 90’s developing and perfecting automation software for professional services. This started before the internet and obviously, the widespread implementation of the cloud, so it didn’t fit the SaaS model exactly as we know it today. Still, it laid the foundation for such things to come.

I then sold this company in 2017. I chose to develop my next vision for a SaaS solution that combines PSA with project management. To launch my current brainchild, I used my own capital that I had earned with the sale of the previous software startup.

Admittedly, I was in the lucky circumstances that I had the financial maeans to make this choice. Directly looking for investors will always limit you in some way to follow your own vision.

We launched version 1 of PSOhub just before the pandemic in 2020, which understandably threw us for a loop. However I think ultimately the pandemic worked in our favor. It drove a bigger need for SaaS that would help people work from home, and maybe even work better and smarter than before…

Drawing on my own experience of over 20 years building software companies, I hope my nine tips for founding your own SaaS startup kickstarts your own journey.