The 4 things customer-obsessed SaaS founders have in common [+QUIZ]

Take the Customer Obsession Test to see if you’ve got what it takes to take your early-stage SaaS from half-baked to hypergrowth

A magnifying glass examining a human silhouette

I’m not here to ruin your day, but if you’re the founder of an early-stage SaaS startup, I have bad news: you’re probably going to fail.

I say probably, because the probability of you succeeding, according to a recent study by Small Biz Trends, is 10%.

Let’s put that into perspective.

Here are 15 new SaaS founders:

And here are how many whose SaaS companies will survive past launch:

Yowch. Looks like the other guy made it, but not without significant hair and weight loss.

So what sets the founder with the Afro (and half of the founder with the male pattern baldness) apart?

According to The Startup Genome Report, there are 14 key factors that distinguish successful startup companies from the rest of the pack. Of those 14 factors, four are focused on how founders validate and scale their business.

Here are the 4 main characteristics of founders who lead their SaaS startups to success:

1) Most successful founders are driven by impact rather than experience or money.

They don’t just want to show off their technical wizardry or sell a shit-ton of widgets, they want to make people’s lives easier. Which means they are intuitively approaching their product from a problem-solution fit mindset.

2) Founders that learn are more successful

According to the report, “Startups that have helpful mentors, track metrics effectively, and learn from startup thought leaders raise 7x more money and have 3.5x better user growth.”

In other words, in the case of startup founders, curiosity feeds the cat. Asking questions, having conversations, testing, seeking guidance: these are the signs of a person who doesn’t have it all figured out, and likes it that way. Because when you don’t have it figured out, the act of learning takes you to unexpected places. And going to unexpected places inspires disruptive ideas.

3) Founders who take their time validating product-market fit are less likely to scale prematurely

Most startup founders think they know who needs their product. They take a stab in the dark and burn through marketing and staffing dollars in an attempt to appease their investors with customer acquisition.

Successful founders understand that if your product isn’t helping the right people, all the marketing dollars in the world won’t save it.

4) Startup founders who pivot once or twice have 3.6x better user growth

They raise 2.5x more money and are 52% less likely to scale prematurely than startups that pivot more than 2 times or not at all.

That tells us that founders who are listening to their users and adapting to their needs while still staying true to their central mission are 90% more likely to succeed than other SaaS founders.

So what do all these characteristics have in common?

Customer Obsession.

What do I mean by “customer obsession”?

It’s the intense focus a SaaS company has on serving the needs of their target customer by delivering products that solve their problems while giving them a consistently delightful experience.

It’s the ability of SaaS companies to filter the noise of a saturated market and hone in on the one person who needs their product the most, and would be willing to pay for it.

It’s the willingness to avoid the lure of popularity and “creating buzz” in the early stages and instead building long-term relationships with a small group of customers, based on meaningful value.

It’s a dedication to building products and creating experiences designed to help your customer succeed, even if it means going back to the drawing board.

I’ll let Jeff “Richest Man Alive” Bezos in his 2016 Letter to Amazon Shareholders do the talking for me:

True Customer ObsessionThere are many ways to center a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.Why? There are many advantages to a customer-centric approach, but here’s the big one: customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf. No customer ever asked Amazon to create the Prime membership program, but it sure turns out they wanted it, and I could give you many such examples.

So what does a Customer Obsessed Founder look like?

If you pass the Customer Obsession Test, look in the mirror, because it looks a lot like you.

I, along with Nichole Elizabeth DeMeré, have created a quiz to help you determine if you’ve adopted a customer obsessed approach to building your products, validating your market, and reaching growth stage.

Don’t worry if you don’t get all the answers right: you aren’t doomed to startup failure yet. We’ll let you know about a few essential resources you can use to get on the right track for customer success-driven growth (hint: one is mentorship).

By the time you’re finished the quiz, you’ll have learned a bit more about the driving factors of Customer Obsessed SaaS companies..and a little bit more about yourself.

TAKE THE CUSTOMER OBSESSION TEST