Why Most Software Companies Struggle to Efficiently Get New Customers

The biggest challenge for 90% of software companies isn’t “building a better product.” The biggest problem is getting new customers, revenue, and growth–reliably and efficiently.

The growth side of the business is what makes or breaks software companies in the long run.

Almost no SaaS founder or software CEO has ever told me they couldn’t build a great product with enough time and investment.

Building products is hard, of course. But it’s figuroutable.

Once you have a valuable enough product to sell, the game is all about customer acquisition.

For many software companies, this is Sales or Marketing. Or both.

For other software companies, this is Product Virality, which is another way to say product-driven marketing and sales.

In the old days, business gurus used to say, “It’s all about Distribution.” How you find, engage, and sell new customers.

Most companies with sufficient products and services don’t grow forever. They get stuck and stop growing.

The continued growth game isn’t so figuroutable, apparently.

  • Great products aren’t enough if you can’t market and sell them well.
  • Expensive sales and marketing won’t work if your funding dries up and you have to become profitable.
  • Temporary tactics that work when you are small aren’t enough if they won’t work when you are bigger in a few years.

The fastest-growing software companies these days have unique and powerful customer acquisition strategies.

Startups with useful products that can’t efficiently acquire happy customers won’t make it for long.

Software founders who want to exit for above-average valuations have to prove they have an efficient growth strategy. Or that their acquirer will do that for them.

Getting into the game requires a great product.

Winning the game is about reliably and efficiently acquiring customers and growing revenue.

In Silicon Valley-speak, this is “find product-market fit before you scale.”

But SaaS founders need to start with a clear path to acquiring customers too. They are both required to succeed.

What do you think?


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