# Don't Start a SaaS in 2026 Until You Watch This

Channel: Rob Walling
Video: https://www.youtube.com/watch?v=K448XtAsGJg
Duration: 12 min
Language: English
Words: 2444
Transcript page: https://viewrankai.com/tools/youtube-transcript/K448XtAsGJg

---

[0:00] Recurring revenue, high profit margins, and incredible exit multiples. There's no doubt SaaS is the best business model for building a multi-million dollar business. But there's a dark side to SaaS that people rarely mention. I'm Rob Walling and after 20 years of building, exiting, and now investing in hundreds of SaaS companies through TinySeed, I've

[0:20] seen where all the landmines are buried. In this video, I'm giving you the map. These are the uncomfortable truths you must know so you go in with your eyes wide open. And make sure you stick around to the end because the final truth might convince you not to start SaaS at all. Let's dive into the first brutal truth of starting SaaS. First one is a common misconception. Having an audience, like a social media audience that's following you, does very, very little for [snorts] your SaaS. You get a small initial launch bump and after that, it's irrelevant. So unless your audience is exactly your ideal customer profile, which in almost all cases a

[0:56] social media audience is not, social media audiences aren't going to do much for you. I say, build your network not your audience if you're going to build a SaaS. So then people say, well how do I build my network? And that's why I've recorded at least one YouTube video on this channel on how to do that. Not a week goes by that I don't see someone on X, Twitter, or LinkedIn saying, you should build your audience and then ask them what they want. And that works great if you're selling information, if you're selling tickets to an event, if you're selling books and courses. If you're building a SaaS, do not waste

[1:28] your time building an audience because it does almost nothing for you. Does very little at the start, but almost nothing for you as you build a SaaS. The second brutal truth of starting a SaaS is that you're going to have to do a lot of things that you don't want to do in order to be successful. Building SaaS inevitably has some element or some level of grind to it. So if you think that it's going to be writing a little bit of code, posting on X or LinkedIn, and that's going to build a great company, you are delusional. You are going to have to do marketing approaches

[1:59] that you probably don't have that much interest in. Maybe do cold outreach, maybe it's SEO, maybe it's going to in-person events, maybe it's partnerships and integrations and talking to humans and going on podcasts and YouTube channels and generally promoting what you're doing. In addition, it means launching something and sticking with it long enough to adjust and take feedback and iterate and make hard decisions with incomplete information and manage your own psychology along the way. You are going to have to do some things you don't want to do when building a SaaS. And there are folks, especially influencers online, who are telling you the opposite. That to me that's akin to

[2:36] telling you you can lose weight by eating ice cream. It sounds great and that you want to believe them because you want this to be fun. And overall, it is fun. But you're going to have to do a lot of things in the meantime as you grow this that you don't want to do. Get used to it. The third brutal truth is the long slow SaaS ramp of death. And this term was coined by Gail Goodman,

[2:57] who is the founder of Constant Contact. She did an amazing talk at Business of Software probably 10, 15 years ago now, where she talked about how building a business with one-time sales can actually grow really quickly. But when you're building SaaS and you're charging $10, $50, even $500 a month, recurring revenue compounds so slowly. Any type of meaningful momentum, any type of meaningful MRR, it usually takes a long time. Now, there should be some leading signals that you are having success, that people are interested. So I'm not saying you should grind for 5 or 10 years with no success and expect then to suddenly have growth. There is a long

[3:36] slow ramp of your revenue over time and it's going to take a lot longer than you want it to. I tell SaaS founders, think in terms of years, not months. I had a founder approach me at one point and say, well I want to be at 10K in 6 months. And I said, uh give yourself 2 years. Maybe you'll be pleasantly surprised and it'll happen sooner than that. But SaaS takes a long time and that's one of the brutal truths. The fourth brutal truth is that building something that people or businesses actually want to use is a lot harder than you think. Churn is the death of

[4:09] SaaS. This is why SaaS is like no other business model because if you go and sell a book or a course to a bunch of people and they never consume the course, you still have the money. But with SaaS, if they stop using your tool, they don't get value out of it, it doesn't do what they need it to, for whatever reason, they cancel. And it makes growing a SaaS company very difficult. Building something that actually not only attracts customers, but that keeps them using it month after month after month, and that you retain users to the point where you have approximately zero churn, is hard to do,

[4:43] but that's what the best SaaS companies do. They figure out how to find extremely strong product market fit. And all that means in my parlance is you've built something that people/businesses want and are willing to pay for. And not only is it hard to get people to just try your product, but to get them to stick around over the long term and pay you is really one of the keys of building an incredible SaaS company that

[5:07] can grow into the millions in revenue. Brutal truth number five is that churn will be the bane of your existence. It never fully goes away. You will constantly be thinking about it. And if you have high churn, meaning you haven't achieved product market fit, it will constantly erode your momentum. And no matter how many customers you sign up, no matter how many people come into the top of your sales or marketing funnel, if you have churn that's 8%, 10%, you just can't outrun that. It will never be a great business. It can be an interesting lifestyle business, but churn is going to be one of your biggest

[5:42] headwinds as you build your SaaS. Truth number six is that good engineering talent is expensive and hard to retain. Good engineers have a lot of options of where they can go. And so in the early days, you might be writing all the code yourself or maybe your co-founder is, but over the long term, you don't want to always be saddled in the code because that's one of the more certain parts of your business. But finding good engineers is challenging. It is totally possible and especially if you are hiring within your time zone, but maybe in cheaper countries. Like if you're in the US, you can hire in Canada or in

[6:13] Central or South America. But I find that it's a key to building an incredible SaaS product is hiring good engineering talent. And the same goes with marketing and sales talent, by the way, because they are sought after and they often know what they're worth. And so in the early days, this is why most founders have to do a lot of the

[6:30] development and the marketing and sales. These are the part of the core four SaaS competencies that I think that you need in order to be a successful as a founding team. But realize that even as you go forward, great engineers, great marketing, great sales, it's it's going to be expensive and hard to retain. Brutal truth number seven is that the work never stops. With SaaS, you are worried about uptime, you're worried about bugs, you're worried about incidents, you're worried about customer impacting issues and they follow you everywhere. And it just might be that you're lugging your laptop down to Cancun when you go on vacation over your

[7:03] holiday break. Because if it's just the two of you founders and you're the one that writes all the code, it never stops. It's 24/7 by 365. And that can start to impact your mental health a bit. It can make you feel like you're always on. And for the first few months, it's fun. And then after 6 months, it's not. And then after 12, 18 months, you kind of burn out on it. Speaking of that, point number eight is that stress and burnout, I don't want to say they're inevitable, but it it kind of feels that way. Like the complexity of building and growing your SaaS, the pressure to build

[7:33] it over time, the constant need for, as I said, uptime and bugs, it's really just a constant that I see SaaS founders kind of burning out from the pressure and how hard it is and having to always be on and then having the headwinds and a competitor or AI or something else, something's always going wrong. And SaaS, while it's an incredible business model, is also one of the most difficult to grow because there's a lot of competition and a lot of people are going after it because SaaS is so valuable. So I don't want to say burnout is inevitable. I do think that stress is inevitable because pretty much every

[8:10] SaaS founder I know who's done it has, you know, at the end after they sell, takes a deep breath and says, "Whoo, I don't know if I want to do that again." Now, a lot of them do go launch another one, but it's definitely a very stressful business to grow. I actually see a lot of founders on the edge of burnout for a particular reason. It's that they're trying to go it alone. And so for years, I've been recommending that serious founders need to be part of a mastermind. It's kind of like a personal board of advisors. They're peers who are in the trenches with you

[8:40] and they'll support you when you're struggling and they'll call you on your BS when, frankly, you probably need it. But finding the right mastermind group is really hard. I've cobbled together a few of my own over the years. And given how valuable masterminds have been for me and how hard it was to find a group, we solved that at MicroConf. We've successfully matched thousands of founders across 20 time zones and 50 countries. And we do mastermind matchmaking. And we match based on time zones, experience, revenue, team size, industries served. And applications are currently open for our next batch of mastermind matching. You can head to microconf.com/masterminds

[9:17] for all the details. The ninth brutal truth I'm going to talk about today, I actually heard in a great podcast episode from Arvid Kahl on his Bootstrapped Founder podcast. And I fully agree with him, which is why I wanted to bring it in here. It's that SaaS changes constantly. If you go start a dry cleaner down the street and you build up a clientele, you might run that for 10, 20, 30 years without a lot of change to the business. Now, that can get boring or that can feel very safe and stable. With SaaS, I don't know of anyone who feels safe and stable for very long at all. Technology changes,

[9:51] your stack changes, security things change, AI comes up and sideswipes you, new competitors, marketing channels start working, stop working. Google does a Google slap to you, so suddenly you have so many fewer customers. It's constant battles on all fronts. And customer expectations are another thing. UI/UX refreshes. You just get momentum and then you realize you have to redesign everything to fit in with the paradigms of the day. It can feel exhausting. It can lead to burnout and frustration and feeling like you're just never getting ahead. And it can feel like even if you have a company doing, I don't know, $100,000 a month, you're

[10:25] like, "Yeah, I'm in low seven figures." You still just feel this existential dread of like, "Well, everything's changing. I don't know how long this is going to stick around." There's so very, very few SaaS companies that are around longer than five years, seven years, where the founder hasn't sold and someone else is running it. It's pretty rare. And I think one of the reasons is because of the need for constant change and just how exhausting that gets. So, knowing all of this, is starting a SaaS still worth it at all? Well, I've started multiple SaaS companies and they have changed my life. So, yes, they were

[10:55] hard, they were a grind, I burned out, I experienced all of the things in this video, but it can still be life-changing for you, even if you don't have an incredible exit at the end. The satisfaction of building something incredible for customers, of making that money along the way if you're bootstrapped and you're able to pull 10, 20, 30,000 dollars a month out of a SaaS company, if you are able to have that exit, and just everything you learn along the way, along with the financial rewards, I think is pretty incredible. I can't imagine working at a full-time day job for all these years when I could

[11:26] have been doing what I've been doing with my life, which is starting SaaS companies. And it's not just me. I have seen thousands of founders completely change their lives by taking the uphill battle, doing the hard thing, and starting a SaaS. But with all that said, I don't recommend that you just dive headfirst into building a full-blown SaaS. I recommend that you follow a

[11:46] strategy I call the stair-step method. It's the single best way to de-risk your journey, and I've laid out the entire framework for you in this next video. If you got any value from this video, please give it a like and subscribe so you get more content just like this. Thanks for watching. I'll see you next

[12:03] time.

---

About this transcript
Read from YouTube's own caption track and laid out by ViewRank AI (https://viewrankai.com).
ViewRank AI finds the videos already beating a creator's own average on Instagram, TikTok and YouTube Shorts, transcribes them from the audio itself in more than 60 languages, and turns what worked into new ideas and scripts.
Free transcript tools, no account needed: https://viewrankai.com/tools
How to read any video this way: https://viewrankai.com/llms.txt