The Top 10 Mistakes SaaS Startups Make: The 2025 Edition (2025)

Dear SaaStr: What are the top mistakes SaaS start-ups make on the way to the first $10m ARR?

The list is of course endless but my Top 10 or so:

#1. Not hiring a truly great co-founder.

The world in tech is just so competitive now. You can’t settle for “the best I could get” co-founder.

#2. Not hiring a 100+% truly committed co-founder.

I see so many founders just quit now, even just in the first few months. Make sure they are at least as committed as you are. Don’t just assume it.

#3. Not carefully managing the burn rate.

Too many founders let the burn rate creep up just a little bit … and then it compounds. 3, 4, 6 months down the road, the burn rate is far higher than they’d planned. Even if doesn’t feel like they are spending all that much.

#4. Hiring any VP you don’t truly 100% believe is great.

Everyone cuts corners here, gets tired, hires for the logo. And then that mediocre VP spends all the money, and hired 3–10 mediocre folks under them.

#5. Getting too tired.

You need help. At a minimum, you need two great leaders besides yourself to truly scale, IMHE. Doing it all yourself is OK in the early days for a little while. But not forever. Not for years.

#6. Being too slow.

This is highly correlated and related to the quality of your team, but the world in software is just too competitive today in 99% of categories. You can’t push out features slowly. The competition will pull ahead. Maybe not this week or this quarter, but feature output does compound. In 18–24 months, you’re left behind. Faster in AI.

#7. Not wanting to “do sales”.

Some products do sell themselves, and/or can be 100% self-serve. Canva scaled to well over $1B ARR without a real sales team. But most of us need to embrace sales to scale, at least in part.

#8. Not going all-in on business development and partners.

So many business software leaders get 40% or more of their revenue from partners. Most of us start off selling 100% direct, but as you build partnerships, you have to staff them. Not just invest an hour or two here and there.

#9. Not being where your customers are.

Yes, most of us work in at least a partially distributed and work-from-home world. But if your customers are all in the SF Bay Area, or in the U.S., or in New York, and you aren’t … you lose. More often than not. Especially when a competitor is there in person. This doesn’t mean everyone needs to be where your customers are. But the customer-facing team (sales, CEO, customer success) probably does be to really win, at least in a competitive segment. Some will challenge this, but … everyone senior in sales that is honest knows it’s true.

#10. Raising too much, or too little, capital.

Bootstrapping is great, but 95%+ of B2B companies that scale to nine figures in revenue do raise at least some venture capital. How much is complicated. Not enough, and you may underinvest. But too much, you may end up just burning it all without much to show but a ton of unnecessary dilution. There’s no one size fits all answer here. But one rule that seems to hold is that you need 50% of your ARR on your balance sheet to really invest and make the hires you need to go big.