How to Build a SaaS Business in 2026: 5 Lessons That Actually Work

Why Most SaaS Businesses Fail (And How to Avoid It)

Building a SaaS business sounds perfect. Customers pay you every month. You're not trading hours for dollars. It's the dream.

But here's what nobody tells you: most SaaS businesses fail before they even launch.

The reason? They build something nobody wants to pay for. This mistake costs years of your life and can burn through millions of dollars.

Dan Martell knows this better than anyone. He's built and sold three software companies. He's invested in over 60 more. And he's watched countless founders make the same mistakes over and over.

His insight? Most advice about building SaaS will actually hurt you.

"Move fast and break things"? That breaks your bank account.

"Build it and they will come"? They won't come.

"Listen to all your customers"? That's how you build something for nobody.

Instead, Martell created a simple framework. It replaces guessing with proof. It gets you customers before you spend months coding. It helps you avoid the mistakes that kill most startups.

This guide shares five lessons from that framework. These aren't the usual startup platitudes. They're practical steps that separate successful founders from those who burn through their savings building products nobody uses.

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1. Find Your Idea: Look in Someone's Spreadsheet

What this means: Don't brainstorm ideas. Find real problems that people are already trying to solve.

Who does this: You, by talking directly to people in your target market.

The goal: Find problems that are so painful, people have already built their own solutions.

Why brainstorming fails

Most founders sit in coffee shops and brainstorm "the next big thing." They read trend reports. They analyze market gaps. They convince themselves they found something nobody else sees.

Then they spend months building. And they discover nobody wants what they made.

The spreadsheet method

Here's what works instead: Ask professionals a simple question.

"Can you show me your spreadsheets?"

Not the simple ones. The complex ones. The ones with 47 tabs, crazy formulas, and manual data entry. The ones they spend hours maintaining every week.

These spreadsheets are gold mines.

Why this works

A complex spreadsheet tells you three things:

• The pain is real (they built their own solution)

• They'll pay for something better (they're already "paying" with their time)

• You know exactly what to build (the spreadsheet shows what matters)

Real example

A marketing manager shows you her spreadsheet. It has 47 tabs. It tracks campaigns across five platforms. She manually calculates which ads are working. Every Monday, she spends 6 hours updating it.

She built this because nothing else does what she needs.

That spreadsheet? It's a $10 million SaaS business waiting to happen.

> "I don't think you find a huge problem in the market you find a customer that has a huge pain Point."

What this means for you

Stop trying to invent problems. Start discovering them. The best SaaS ideas aren't created in brainstorming sessions. They're discovered in the tools people already built out of desperation.

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2. Get Validation: Make Them Pay Before You Build

What this does: Proves people will actually pay for your solution before you invest months building it.

Who benefits: Anyone who can't afford to build the wrong product.

The goal: Replace polite interest with real commitment.

The problem with feedback

You can talk to 100 potential customers. They'll all say your idea is great.

"I'd definitely use that!"

"Let me know when it's ready!"

"This would be so helpful!"

But none of this matters. Polite enthusiasm means nothing. The only real validation is when someone opens their wallet.

The crowdfunding proof

Think about Kickstarter. People pay for products that don't exist yet. They fund board games, gadgets, and apps based on a description and some mockups.

If consumers will pay for ideas, so will businesses.

How to do this

After you show your prototype (even rough wireframes), make this offer:

"I'm creating an early adopter program. Pay for a year upfront at 50% off. You'll help fund development and get lifetime priority support."

Real example

You've talked to five companies about your project management tool. They all love the idea.

Instead of spending six months building and hoping, you make the offer. Annual license: $5,000 (50% off the normal $10,000).

Four companies say yes. You just raised $20,000 and validated real demand. All before writing production code.

The critical mistake to avoid

Here's where most founders mess up.

Customer A wants Slack integration. Customer B needs mobile apps. Customer C requires custom reports.

You promise all of it just to get the sales.

Suddenly, you're not building a SaaS. You're running a custom development shop. You'll spend a year building five different products. You'll satisfy nobody.

The rule

Build the same thing for everyone. If someone needs customization, they can wait or look elsewhere.

The customers with real pain will say yes anyway.

What rejection tells you

If people won't pay even at 50% off, you've learned something valuable: the pain isn't that bad.

Better to learn this now than after six months of building.

> "...if they don't pay they won't pay attention they don't pay they won't invest and when you go to launch they're just going to tell you it's nice but they're not going to actually use the product."

Why this matters

Pre-payment gives you three things:

• Real proof people want this

• Money to build without giving away equity

• Customers who will actually use what you make

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3. Build Fast: Launch in 90 Days or Shrink Your Idea

What this prevents: Building too many features and never launching.

Who enforces this: You, from day one.

The goal: Force yourself to focus on the one core feature that solves the main problem.

Where this rule came from

Martell and his co-founder kept arguing about what to build. Every meeting turned into a debate.

So they made a rule: any new idea had to be something they could build and launch in three months. Maximum.

The cautionary tale

Martell has a friend who spent three years and $5 million building a SaaS. No customers. No revenue. Just endless refinement.

Meanwhile, most successful SaaS products with paying customers? Built for under $100,000.

What the 90-day rule does

This time limit changes everything. It eliminates:

• "We also need..." feature creep

• "Users might want..." speculation

• "Let's make it perfect" perfectionism

• "We should support..." scope expansion

Real example

Your initial vision for a project management tool includes:

• Task management

• Time tracking

• Invoicing

• Team chat

• File storage

• Client portals

• Reporting

That's a 12-month build.

The 90-day rule forces you to ask: "What's the ONE thing that solves the core pain?"

Answer: Task management with dependencies. That's it.

Everything else waits until you have paying customers and real usage data.

Why this works

Speed beats perfection. Every month you spend building is a month without:

• Customers

• Revenue

• Real feedback

• Learning what actually matters

The 90-day rule ensures you learn from real users, not your imagination.

What you're actually launching

You're not launching something embarrassing. You're launching something that works and solves the main problem.

Then you improve it based on what actual paying customers tell you they need.

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4. Focus Smart: Ignore Non-Users and Complainers

What to do: Split users into three groups and focus only on the middle group.

Who this helps: Founders trying to please everyone and satisfying nobody.

The goal: Get maximum results by focusing on users most likely to become fans.

The instinctive mistake

When your product launches and adoption is slow, you focus on:

• People not using your product (convert the skeptics!)

• The loudest complainers (the squeaky wheel!)

Both instincts are wrong.

The three groups

Split your users into three categories:

Reds: Don't use your product at all

Greens: Power users who log in daily and love it

Yellows: Casual users who log in occasionally and get some value

Why not focus on reds?

If someone isn't using your product, they probably don't have the problem you're solving.

Trying to convert them means building features you shouldn't or convincing people who don't need you.

Why not focus on greens?

Your power users already love you. They don't need more features to stay.

Why not focus on loud complainers?

Two customers out of a hundred have unusual needs. They're loud because you're not meeting those needs.

But building for them means ignoring the other 98 customers.

Where to focus: Yellows

Your casual users are the opportunity. They already see some value. They're just not hooked yet.

Converting someone who's already using your product a little is way easier than convincing a skeptic.

The million-dollar question

"What one or two features would turn casual users into power users?"

Real example

You look at your project management tool:

• 30% are reds (signed up, never came back)

• 10% are greens (log in daily, manage 50+ tasks)

• 60% are yellows (log in weekly, manage 5-10 tasks)

You interview 20 yellows and learn: they'd use it more if they could assign tasks to teammates.

They're already managing their own work. They just need collaboration.

You build team assignments and notifications. Within two months, 40% of your yellows become greens.

You just doubled your engaged users without acquiring anyone new.

Why this matters

Converting existing users who already see value is exponentially easier than convincing skeptics.

This is where your SaaS actually takes off.

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5. Get Traction: Use Growth Hacks, Not Ads

What this means: Find creative ways to reach your ideal customers instead of spending money on ads.

Who does this: You and your early team, doing things that don't scale.

The goal: Get your first customers through an unfair advantage.

Why traditional marketing fails early

Most founders think: once the product is built, start marketing. Run Google Ads. Do some SEO. Post on social media.

These channels work eventually. But early on, they're too slow and too expensive.

What a growth hack actually is

A growth hack isn't just marketing. It's a creative way to reach customers that gives you an advantage.

It's something competitors won't copy because it seems too complicated or too manual.

The key question

"Who already has access to my ideal customers?"

Someone has a list, a community, or a platform where your customers hang out. Your job is to figure out who and how to tap into it.

Real example 1: Clarity

When building his expert marketplace, Martell's team discovered something others missed.

Experts put their contact information on the last slide of their SlideShare presentations.

While competitors were cold emailing, Martell's team mined this public data. They built their marketplace by reaching out to experts who had already proven themselves publicly.

Real example 2: Uber

When launching in new cities, Uber partnered with event organizers.

They put gift cards in attendee bags at conferences and festivals. One partnership generated thousands of app installs from exactly the right people—professionals in a specific city.

Competitors couldn't easily copy this. It required relationships, negotiation, and coordination that didn't fit their scalable playbook.

What makes a good growth hack

• Non-obvious: Competitors aren't doing it

• Targeted: Reaches exactly your ideal customer

• Efficient: High return for the effort

• Temporary: Won't scale forever, but gets you started

• Unique: Uses something specific about your market

Your example

You built a tool for marketing managers. Instead of running ads:

• Find LinkedIn groups where marketing managers ask questions

• Provide genuinely helpful answers (not spam)

• Mention in your profile that you built a tool for this

• Message people whose questions show they have the exact problem

• Offer early adopter pricing in exchange for feedback

This won't get you 10,000 customers. But it can get you your first 50.

And those 50 give you testimonials, case studies, and feedback that make all future marketing easier.

Why this matters

Your first customers are the hardest to get and the most valuable.

Growth hacks get you in front of them before you have money for traditional marketing.

They give you the traction to survive long enough to build real marketing channels.

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How These Five Lessons Work Together

Think of building a SaaS as reducing risk step by step:

The spreadsheet search ensures you're solving a real problem.

The pre-payment proves people will pay before you invest in building.

The 90-day limit forces you to ship fast and learn from real usage.

The user focus directs your limited time to customers most likely to become fans.

The growth hack gets your first customers without burning cash on ads.

Each step builds on the previous one. Skip one, and you add unnecessary risk. Follow them all, and you dramatically increase your odds of success.

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Common Questions

Q: What if I can't find customers with spreadsheets?

That might be a warning sign. If people aren't building their own solutions, the pain might not be bad enough. Look in different industries or reconsider whether the problem is worth solving.

Q: What if people won't pre-pay?

That's valuable feedback. Either the pain isn't severe enough, your solution doesn't solve it well enough, or your pricing is wrong. Adjust and test again before building.

Q: Isn't 90 days too fast for complex solutions?

If it feels too complex for 90 days, you're trying to solve too many problems. Find the one core feature that delivers value. Everything else is unnecessary right now.

Q: How do I know which casual users to focus on?

Talk to them. Ask what's stopping them from using your product more. Look for patterns. The feature that 60% mention is what you should build next.

Q: What if my growth hack stops working?

That's expected. Growth hacks are temporary. They get you started. By the time yours stops working, you should have enough traction to fund real marketing.

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Action Steps You Can Take Today

Start with five spreadsheet interviews. Don't build anything until you've talked to five people in your target market. Ask to see their workflows.

Make the pre-payment ask. If you're not slightly scared when asking for money, you're not asking early enough. Rejection now saves you months of wasted work.

Set a 90-day deadline. Put the launch date on your calendar before you write code. Work backward from that date. Cut features ruthlessly.

Talk to ten casual users monthly. Make this a routine. Regular conversations with casual users become your product roadmap.

Document your growth hack. When you find something that works, write down every step. You'll need to train others eventually.

Expect to change direction. These constraints don't prevent pivoting. They make pivots faster and cheaper. You can test a new direction in 90 days instead of a year.

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The Bottom Line

Building a successful SaaS isn't about one brilliant idea. It's about discipline.

Listen to wallets, not words. Shrink your ideas to fit 90 days. Find customers where competitors aren't looking.

The conventional wisdom leads to expensive mistakes:

• Brainstorm revolutionary ideas ❌

• Build comprehensive solutions ❌

• Listen to all feedback ❌

• Launch big marketing campaigns ❌

The approach that works:

• Discover validated problems ✅

• Get paid before building ✅

• Ship in 90 days ✅

• Focus on casual users ✅

• Hack your way to traction ✅

This framework won't guarantee success. Nothing can. But it helps you fail faster, learn cheaper, and dramatically improve your odds.

Your next step: Look at your own work. What frustrating task do you repeat every week? What complex spreadsheet do you maintain?

That might be exactly where your SaaS business begins.

The question isn't whether you can build software. The question is: will you build something people actually want to pay for? 💡