Nick Birch - Surviving as a Software as a Service (SaaS) Startup

Gompers and Lerner (2001) reveal that a growing body of research shows that individuals make decisions based on biased assessments of information. These assessments are powerfully influenced by people's beliefs about themselves and the workings of business. Most entrepreneurs are certain that their venture will succeed despite the fact that nearly half of all venture capital-backed companies don't fulfil their potential and nearly one-third go out of business. For newly launched enterprises without venture capital backing, failure is almost assured: nearly 90 percent fail within three years .

The following excerpt shows that historically, major business mistakes have ended fledging software companies since the beginnings of personal computer software development:

In the early 1980s, Tom Gregory and a group of his colleagues from a minicomputer software company decided to enter the personal computer software market and compete head-to-head with Lotus and Microsoft. The company they founded, OvationTechnology, raised over $6 million in venture capital financing. Gregory and his founding team possessed extensive marketing backgrounds but scant technical skills. So, perhaps not surprisingly, Gregory's team decided to spend substantial resources on marketing at the expense of research and product development.

Out of the gate, Ovation began spreading the word about major improvements in functionality that their program would offer over their competitors. Its polished advertising campaign excited the imaginations of potential customers and investors, and gave them the impression that the company was thriving. Current investors, however, found it difficult to gauge the progress of the company. Although Ovation gave them glowing reports of the company's supposedly significant strides, they never presented a completed prototype. In fact, the company never finished developing its product and never made a significant sale. If the founders had shared the necessary information with investors, perhaps Ovation's venture capitalists could have guided Gregory along the development path and this failure could have been averted.

(Gompers and Lerner, 2001)

Gompers and Lerner (2001) are of the opinion that entrepreneurs will almost always choose to continue spending money to market their product or develop their technology even when the evidence clearly shows that they should abandon their efforts. Similarly, overly optimistic entrepreneurs may feel compelled to expand their firm's capacity beyond its requirements because they overestimate the future demand for their products . It s what Agrawal (2014) calls the difference between short-term capitalism and long-term capitalism. You have to optimise your strategy for the society we live in, not a theoretical perfect market .

Evernote VS Springpad

With the ever-growing noise and mess of content on the Web and on social networks, people are increasingly looking for better ways to curate their digital experiences and channel that white noise into signal.