Have you been trying to grow your SaaS-based startup but still find yourself at the starting point, but worse?

I know how that feels.

When I first jumped into the entrepreneurial journey, my focus was clear. I wanted to grow a SaaS business that led me, and my environment, to the moon and beyond. Technology was my thing, and I couldn’t stop seeing startup successes everywhere around me. I had lived that firsthand as the first hire and CTO of Facephi —a brand-new startup in the AI space. It seemed obvious. Innovating in tech was my key to success.

But here’s the (counterintuitive) thing: a SaaS is often the wrong type of product to begin your entrepreneurial career.

It Usually Entails High Maintenance and Evolution Costs.

When you launch a SaaS, two things can happen.

Either you succeed, or you fail, right? But what’s success exactly? And what is failure? What if you’re just growing slowly? Should you keep going? Should you stop? 

Its demands are open-ended, and there is no clear definition of done.

Creating a SaaS is not just a matter of building the thing. Once you put it into the market, it carries a hidden, indirect commitment.

When you have customers, you’ll have to fix bugs, attend to new feature requests, solve customer questions, and a whole other bunch of issues. You’ll suffer if things don’t move as fast as you need to. And even if you declare it a failure, you may find yourself stuck with just a handful of customers, which you have to support until the end of the Internet.

It’s hard to quit when you already have customers on board, and you just can rely on a languishing product, your time, and your energy to find a way out.

• You could try to sell it. But that’s not guaranteed at all. A stagnated product with no growth seems complicated to deal with.
• You could try to delegate it. However, that means you have the financial capacity to have others to delegate to. But reaching the required level of wealth is hard when you condemn your time and energy right from the start. Not to mention that onboarding more people is not free of charge —but that’s a topic for another time.
• You could look for external funding. But it won’t be easy with a slow-growing product. And even if you make it, you’ll likely lose the most valuable thing that got you onto the entrepreneurial path: your freedom and independence.
• Naturally, you could also quit. Still, this is not free of charge either. Your current customers will likely feel betrayed, talk bad things about you (for very good reasons), and dramatically damage your reputation and credibility.

Of course, these points greatly depend on the specifics of the tool you build and how critical it is for the customer’s workflow. E.g., it’s not the same to abandon when you’ve made Xnapper (a screenshot tool for social sharing) as when you’ve built Phatom (a website analytics cloud service). The latter would be very disturbing for many. The former, probably not that much.

But problems do not stop here.

A SaaS Can Hamper Your Capacity to Attempt Other Things (And You’ll Likely Have to Attempt Many Things).

SaaS is a scalable activity.

You put in some limited resources (mainly your time and energy at first) and expect to get a big, ideally unlimited reward. But that’s a tough game. Scalable activities are highly competitive, random, and highly reliant on luck. From everything that’s put into the market, just a few succeed. 

The rest languish in silence.

Despite the best efforts and wisdom in the world, you can’t certainly predict what will work and what won’t.

So, like a VC, you’ll likely have to attempt many things before finding success.

But SaaS creates a capacity problem for you. Suppose you get locked in with a slow-growing product (as we saw above). In that case, you’ll see your time and energy severely lessened to act on other, potentially better things.

As a result, it can indefinitely lock you into a cycle of misery. You can’t get any meaningful reward from what you’re doing and can’t find more time and energy to try other things that could play out better.

Definitely, not good.

Harness Other Low-Maintenance Instruments Instead.

Open your mind.

As tech people, we often suffer from tunnel vision. But there is life beyond SaaS.

• You can build educational products. Things like e-books, online courses, cohort-based courses, workshops, etc., can give you an excellent ROI with little ongoing effort.
• You can trade instead of creating. Instruments like fiat and cryptocurrencies, ETFs, commodities, company stocks, real estate…and any asset you can trade with are fantastic options to invest into.
• And, of course, you can also build SaaS products. But do it with care. Shape and pick projects that will pose low demands on you after launching —at least for now. Xnapper, RemoteOK, and NomadList are perfect examples of what makes a good product when you’re just starting.

These are all liquid assets you can withdraw from at any time.

And this property is crucial when you’re just starting up. Your time and energy don’t scale. They are your main assets but also your main constraints. There is only so much time in a day and so much energy you have to spend. Unlike money, you can’t find more out there.

Luckily, these types of products do not lock you up.

But that’s not the only benefit.

They are all potential sources of passive (or nearly passive) income that you can combine and diversify for maximum results.

Together, they’ll help you stay more adaptive and have more space to attempt other things. And they’ll help you get increasingly stronger to fund more speculative matters further down the road. All while preserving your freedom and independence. Definitely, a more sustainable road to success.

So harness passive liquid instruments first.

Be like water, my friend.

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