4 variables that make or break a startup

After working with over 50 early-stage B2B SaaS startups, I've noticed a pattern: most founders focus on the wrong problems in their business.

They're building features nobody wants, targeting low-value customers who inevitably churn, or communicating propositions that simply don't justify their price point.

The difference between modest 10-20% improvements and explosive 50-100x returns often comes down to just four critical variables. In today's post, I'll break down these factors that determined whether our client startups struggled or went on to generate tens of millions in profit (not just revenue).

Variable 1: Customer - Your market defines everything

Marc Andreessen famously said, "Market matters most. A great product and team can't save you if your market sucks."

The most poisonous mistake I see repeatedly is a lack of focus. Founders chase multiple market segments, target different personas, and try to be everything to everyone. As the old saying goes, he who chases two rabbits catches none.

Each persona has unique problems and motivations. When you attempt to serve marketers, salespeople, AND operations teams simultaneously, you'll deliver a mediocre 5/10 experience to all of them rather than the exceptional 9/10 experience to one that builds remarkable companies.

Every great software company started narrow:

• Stripe began as payment infrastructure for developers

• Twilio launched as just an SMS API

• Clay pivoted to focus exclusively on the outbound persona when they saw traction

The sniff test: Can you stand up and give a 40-minute presentation on the professional life of your customer? That's how deeply you need to understand them.

Variable 2: Problem - Urgent, pervasive, and expensive

Finding the perfect customer means nothing if you're not solving problems they're willing to pay for. The best problems are:

1. Urgent - "Take my money right now" problems where delays create serious consequences

2. Pervasive - Widespread issues affecting many in your target market

3. Expensive - If you want to build a £10 million business, solve problems that the market deems to be worth £10 million

But here's the critical nuance most founders miss: focus on jobs to be done, not just problems.

People go to work every day to complete specific tasks and workflows that help meet quarterly objectives and annual goals. Your software doesn't help them "increase revenue" directly - it helps them send cold emails more efficiently, manage their inbox better, or report performance to managers more effectively. These are all workflow-related tasks. Go too high, you’ll sound like everyone else making revenue promises, go too low, and you’ll be targeting problems that buyers aren’t excited about.

Look at your ICP's job description. What specific tasks must they complete? Where are the friction points that software could improve?

Variable 3: Proposition - Communicating your solution

Once you understand your customers and their problems, you must articulate how you solve them. This requires two key elements:

The promised land

Paint a vivid picture of Point B - where customers want to go. This is where their cold email campaigns perform better, their website conversions increase, and they hit their targets. Your proposition must clearly communicate that you're the vehicle to get them there.

Unique mechanism

With tens of thousands of software products making similar promises, what makes yours different? What's your "secret sauce"?

Take my client Instantly, who grew from 0 to $20 million in just 3 years. Their unique mechanism was "inbox rotation" - allowing unlimited sending through multiple inboxes for a fixed price ($97/month) when competitors charged per inbox. This completely disrupted the cold email space because customers could send 100 or 2,000 emails daily for the same price, where previously they would be paying up to $1,000/mo or locked into $15k/yr annual deals.

Your value proposition should be expressible in one sentence: "We help [ICP] solve [problem] by [unique approach] so they can [outcome]." If you can't articulate this clearly, you don't understand your own offering.

Most startups really struggle to do this. Instead, when you ask what problem they solve or what makes them unique, they tell you a 3-minute story. Be specific and succinct.

Variable 4: Product - Fulfilling your promise

Your product must deliver on your proposition. No amount of brilliant marketing can overcome a product that fails to get customers to their Promised Land.

We're seeing this play out in the AI SDR market right now. The proposition sounds brilliant (automate cold outreach without SDRs), but reported 70% churn rates indicate serious product failures.

Build for stickiness - become so embedded in customers' workflows that removing you would be painful. This happens through:

• Cross-team adoption

• Deep integration with essential tools

• Irreplaceable data or networks (these also build moats)

Finally, consider Product-Channel Fit - designing your product specifically for your distribution channels. Clay succeeded because they built features that incentivised users to share templates and workflows on social platforms, creating a UGC flywheel.

The path forward

Each of these variables will likely require multiple iterations before you find the perfect balance. You might iterate on your target customer 3-5 times before discovering who values your solution most. The same applies to problem focus, value proposition, and product features.

This isn't a one-time exercise but an ongoing evolution. The most successful founders I've worked with aren't necessarily the smartest - they're the ones who systematically validate these four variables and quickly adjust when the data has changed.

Finding the right formula for you

At GrowSaaS, we've helped early-stage B2B SaaS founders identify and optimise these four variables through our structured methodology. We've seen our clients grow from zero to tens of millions in profit by getting these fundamentals right.

If you're an early-stage founder (under $1M ARR) struggling to find traction or looking to improve growth, book a free strategy session. We'll help you identify which of these four variables needs attention in your business and outline the fastest path to sustainable growth.

Book Your Free Strategy Session →

Liam