Failed SaaS post-mortem: validate your pricing model like I didn't
In this postmortem from 2020, @elliotbnvl candidly breaks down the dissolution of their startup, examining the fatal assumptions, misallocated resources, and market dynamics that led to its shutdown.
Core Principles for Independent Builders:
Early signals were often rationalized away instead of prompting an immediate pivot in distribution or pricing.
The psychological toll of running out of capital compounds operational friction in a solo or small team setup.
Key Antidote: Validate paying willingness before committing months to building sophisticated product features.
Community Debate Themes:
Community discussions on HN centered on identifying product-market fit early, avoiding vanity metrics, and the emotional recovery process after shutting down.
CATEGORY Postmortems & Failures →
HISTORICAL ERA Pandemic Bubble (2020–2022)
COMMUNITY SCORE 123 points
TOTAL DISCUSSIONS 70 comments
Amazing job on building something, but you're giving up way too soon. With respect to Jason, there's no guarantee that every SaaS charging less than $50 / month is going to drown in support costs. Let's do the math, shall we?
Suppose you want to make $10k MRR with this. You need 500 monthly users, right? Realistically, a good chunk of them aren't going to even use the product very often, despite paying for it. This is even more true since it's cheap. You could easily end up with fewer than 100 of the 500 logging in and using the product on any given day. Of those, maybe 5-10 are going to actually need support, and you could easily cover half of that with an FAQ, training videos, etc. So on any given day, you might get 2-5 emails from your 500 customers. Even if it's 10x that, you could probably churn through 20-30 support emails in 1-2 hours just by yourself, or you could hire someone for $500 / month to do it for you. And support requests are going to drop over time as you improve the product, fix bugs, etc.
For the record, none of this is theoretical. I've run multiple profitable saas / recurring revenue projects and I've never had to deal with "drowning" in ongoing support requests. Supporting free users is a different question, and freemium can genuinely be challenging in terms of support requests, but even there it's not that difficult to handle larger volumes of support requests with automated methods to cut down 90% of it. And if you have a handful of problematic customers who are a constant source of stress, you can fire them. They're not worth your sanity, especially for $20 / month.
A better question might be: why are you giving up so quickly? Is it really that you think it's not possible? Or maybe something else going on here?
I get the impression that you're rushing - rushing to build it, rushing to get a customer, rushing to get to some MRR. Why?
Why the 90 hour weeks? Why make critical business decisions without any metrics after hearing some guy on the internet talk about $50/user? Because he's famous?
Most experienced people know to have patience: patience to find the right solution, patience to find the right users and patience to make the right connections. It all takes time and you only gave it 3 weeks?
Sorry but you sound like you want to make a quick buck and retire early, or maybe you need the money now. Nothing wrong with that, but it's not really a "SaaS post-mortem", it's more of a "I don't have the time or patience to invest in this SaaS".
All I can say is, have more patience, don't rush into things and don't throw your hands up in the air and give up when it's not going as well as you imagined in your mind. You have to persevere if you're going to run a startup. Good luck!
Hum, that's not really why you failed in my opinion.
I feel like you think building a company is only about following the good rules. This is wrong, there is best rules to follow to create a successful company, you need to take risks and do new things. Following the 'best practices' is the best way to no be successful.
Regarding your pricing, you are selling to individual developers, so, to people who never buy any professional products, and as other have said, after 3 weeks you can only say that you have not waited long enough to know if you are failing or not.
Also you are too sure about what you are doing. If things are that obvious for you, it means you are very likely missing something
My advice to you, forget about money, build something which satisfies your target users for free an when you will have several of them you will understand what they are willing to pay for. Startup life is long, you need to be patient and persistent, you have not failed, this is only the beginning ;), good luck
... wow, that's crazy fast. I'd argue you didn't validate anything with that time frame. It takes months to build a reputation or awareness around a product to give people time to make a decision. As SaaStr says, give your product/startup TWO YEARS.[1]
Three weeks isn't enough time to even pretend you're bootstrapping. That's a vacation from work...
... ESPECIALLY IN B2B.
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[1] https://www.saastr.com/if-youre-going-to-do-a-saas-start-up-you-have-to-give-it-24-months/ ↗
Your objective was to close a sale. If you closed a sale you could keep learning. If you close a sale it validates you're solving a problem people are willing to pay to solve. At that point you're already ahead of 30% of startups.
Jason Cohen's essays are a major influence on me and I've been doing this SaaS stuff for over twenty years. But you can always raise your price, especially after doing a lot of learning with a handful of early customers. But it's very difficult to lower your price after losing the sale the first time, I've got first hand experience here.
Three weeks is a ridiculous amount of time to judge success of a startup, you need to invest a minimum of two years and at times during that period it will be an absolute grind. That's why you need to be absolutely in love with your idea or you won't have the energy to continue.