SaaStr · 2012-11-16 · 4947d

4 Good Reasons Not to Start a SaaS Start-Up

Jason Lemkin argues that starting a SaaS company from scratch is rarely the optimal career choice unless it's a calling, despite the glamorization of entrepreneurship. He presents four reasons against founding: high failure rates with no credit, poor risk-adjusted economics compared to joining established tech companies, difficulty assembling great teams, and extreme personal hardship. He advocates for joining existing successful startups or established companies instead.

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Metrics in this report

First Year Revenue

$100,000,000$

historical inflation-adjusted

Lotus 1-2-3 first year performance

Lifestyle SaaS Business Revenue

$300,000$

annual

Attainable single-person SaaS business

Promissory Note Amount

$750,000$

personal example

Full recourse note signed by author for payroll funding

Success Rate (implied)

0.00001%%

estimated

SaaS startup success probability