SaaStr Workshop Wednesdays- Jason Lemkin - 9 Signs A StartUp Isn't Going to Make It

9 Signs A StartUp Isn't Going to Make It
Jason Lemkin, Founder & CEO @ SaaStr

1. Jason Lemkin
Founder & CEO
SaaStr
@jasonlk
9 Signs A StartUp Isn't Going
to Make It ... and 5 Things Not
To Worry About So Much

2. #1. Founders’ understanding of market
doesn’t get deeper over time

I really worry when 9–12 months later, the founders do not understand their
market better. Especially, when they are a bit too arrogant about how they will kill
the leaders — when they don’t really understand why they win.

3. #2. Too slow to hire VPs.

Hiring is tough, but if 12 months have gone by and you haven’t added 2 strong
senior execs to the team, I get worried. I worry if you can even recruit them at all. If
you can’t — you will never scale. At least, you will struggle to scale. When others
fly.

4. #3. Too slow in general.

Too slow in general. Startups that are just too slow get eclipsed by the competition.
No matter what else great they have going for them.

5. #4. Excuses for misses. Often, again
and again

This is maybe the biggest flag. You will have rough months and quarters. Probably
even a rough year or two. It’s a bummer, but it happens to us all. When the
“excuses” come out, though … confidence goes out the door.

6. #5. Surprises
There’s no need for surprises at the investor / board level in SaaS. Let everyone know ahead of time. In
SaaS, the revenue recurs. You’ll know when a big customer is at risk. When the burn rate may grow larger
than plan. When the year plan is at risk. When a VP may not be the right one. The best CEOs telegraph
these risks, without drama, but plainly and ahead of time.

7. #6. Slowdown in transparency,
especially during tougher times.
This is maybe the second biggest flag. When transparency slows down, especially
in tough times, confidence goes out the door. Congrats on the great quarter. But not
sending a prompt investor update when the next quarter is soft? That’s
confidence-wrecking.

8. #7. Lack of deep understanding of the
competitive landscape
You should get better and better at this. When I hear a CEO say a competitor is “imploding” — usually they
aren’t. Sometimes, but usually not. The best CEOs are very respectful of their competitors. The best CEOs
update you first on what the competition is doing well, and importantly. where they are adding competitive
differentiation.

9. #8. Manipulation and sociopathic
behavior
Yes, as CEO, you are selling up. That’s part of the job. But venture is a confidence game. Don’t sell a line, or
a crock. Don’t spin a story that isn’t real — especially internally. Take the tough criticism, even and especially
when you don’t want to hear it. When the going gets tough, the tough get going. The manipulative, by
contrast, lash out.

10. #9. Unable to Get Burn Rate Under
Control
This sometimes kills startups, sometimes it more maims them. Sometimes it leads to a premature exit. But
one way or another, the best founders wrestle a too high burn rate into something manageable.

11. Thank You