Most founders think they need more customers walking through the front door. The real problem? They’re all walking out the back.
The Uncomfortable Math Your Board Doesn’t Want to See
Here’s a story that’ll make you wince.
Last month, I sat in a meeting where the CEO proudly announced they’d hit 1,000 trial signups. Virtual champagne corks popped. Zoom high-fives all around. The CMO was practically glowing with joy.
I pulled up their conversion dashboard. Of those 1,000 people who raised their hand and said “yes, I want to try this,” exactly 73 became paying customers.
Seventy-three.
That means 927 people took the time to sign up, create an account, and then decided that the product wasn’t worth paying for. These weren’t tire kickers or freebie hunters. These were real humans with real problems who believed, even for a moment, that you might solve them.
And you failed them.
The zoom went quiet when I shared that number. Not the good kind of quiet where everyone’s thinking deeply. The uncomfortable kind where everyone suddenly finds their phones very interesting or that their wifi connection is spotty.
“We need more qualified leads,” someone eventually mumbled.
Wrong answer.
The Myth of the Magic Traffic Machine
Here’s what most SaaS founders believe, deep in their bones: if they could just get more people to try their product, everything would work out. More trials equals more customers equals more revenue equals happier investors equals founder paradise.
This is like a restaurant owner with a dining room full of customers who take one bite and leave, concluding the problem is they need more people to walk through the door.
The human brain loves simple explanations for complex problems. “We need more leads” is beautifully simple. It’s measurable. It’s something you can throw money at. It makes everyone feel productive and important.
“We’re terrible at helping people understand our product” is much harder to swallow. It requires admitting you might have built something confusing. It means looking at systems you’re proud of and calling them broken. It’s personal.
But here’s the thing about reality: it doesn’t care about your feelings.
After spending 13 years watching companies scale from garage startups to public offerings, I’ve learned that most growth problems aren’t input problems. They’re conversion problems. You don’t need more people saying yes to trying your product. You need more people saying yes to paying for it.
The Three Ways You’re Accidentally Torturing Your Users
Let me tell you about the three most common ways SaaS companies turn eager prospects into frustrated ex-prospects.
Torture Method #1: The Museum Tour Nobody Asked For
“Welcome to our platform! We’re so excited to show you everything we’ve built!”
Stop right there. Please for the love of good, stop.
Your new user didn’t sign up to admire your craftsmanship. They signed up because they have a specific problem they need solved, probably today, and they’re hoping you can solve it faster than your competitors.
But instead of solving their problem, you’re giving them a tour of your engineering department.
I once audited a project management tool that had a 17-step onboarding flow. Seventeen steps. They walked users through team setup, permission levels, custom fields, reporting dashboards, integration options, and notification preferences before letting them create a single task.
It was like forcing someone to learn the complete history of hammers before letting them hang a picture.
Their conversion rate was 6%. Six percent.
We rebuilt their onboarding around one simple question: “What’s the first task you need to track?” Thirty seconds later, users had created a task, marked it complete, and experienced the core value of the product.
New conversion rate: 11%.
The lesson isn’t that features are bad. The lesson is that timing matters. Show people value first. Show them features after they care.
Torture Method #2: The Paperwork Mountain
“Just fill out these quick fields and you’ll be ready to go!”
Every form field you add is a small tax on someone’s attention. Every dropdown menu is a decision they’d rather not make. Every “optional but recommended” step is a choice between doing work and not doing work.
Guess which one wins?
I reviewed one SaaS tool that required new users to:
- Import their contact list
- Set up their company profile
- Choose their notification preferences
- Connect their calendar
- Invite team members
- Select their plan features
All before they could use the core product.
The completion rate for this setup flow was 31%. That means 69% of people who wanted to try the product looked at the setup requirements and said, “Never mind.”
This is the equivalent of a gym requiring you to fill out a detailed fitness history, choose your workout music preferences, and schedule next month’s sessions before you’re allowed to touch a treadmill.
People came to work out, not to do paperwork.
Torture Method #3: The “Figure It Out Yourself” Philosophy
This is my personal favorite form of user cruelty.
You drop people into your dashboard and assume they’ll figure it out because “the interface is intuitive” or “our users are smart people.”
Let me share a truth about smart people: they’re busy. They’re impatient. And they have exactly zero interest in learning your product for the intellectual challenge.
They’re not here to be educated. They’re here to get something done.
Your users are like people trying to catch a flight. They don’t want to explore the airport. They don’t want to appreciate the architecture. They want to find their gate as quickly as possible and get on with their lives.
But most SaaS products treat new users like tourists who showed up specifically to learn about the local customs and navigation systems.
The Real Numbers That Should Terrify You
Let’s talk about what bad onboarding actually costs, in cold, hard math.
Say you’re spending $5,000 per month on marketing to generate 200 trial signups. At a 10% conversion rate, you’re acquiring 20 new customers monthly.
Your competitor optimizes their onboarding and converts 20% of their trials. Same marketing spend, same traffic volume, but they’re getting 40 customers per month.
In one year:
- You: 240 customers
- Them: 480 customers
They’re growing exactly twice as fast as you with identical marketing budgets.
But the real cost isn’t just the customers you didn’t convert. It’s the reputation damage.
Every person who tries your product and leaves doesn’t just disappear into the ether. They form an opinion. They tell their colleagues. They answer questions on forums. They influence decisions at their next company.
You’re not just losing customers. You’re creating negative word-of-mouth, one confused trial user at a time.
How We Fixed Hubstaff (And How You Can Copy It)
When we rebuilt Hubstaff’s onboarding, we followed three principles that sound simple but require discipline to execute.
Principle 1: Value in Under Five Minutes
We mapped every possible path from “create account” to “understand why this matters” and ruthlessly optimized for speed.
For time tracking software, that meant: start timer → watch it count → stop timer → see the data.
Everything else, team management, detailed reports, integrations came later through progressive disclosure.
We literally used stopwatches during user testing. If someone couldn’t reach their first “aha moment” in under five minutes, we redesigned the flow.
Principle 2: Show, Don’t Explain
Instead of explaining how time tracking works, we had users track time on a sample project. They could see the timer running and immediately understand the value proposition.
Demonstration beats explanation every time.
We created fake projects with fake data so users could click around and see what their actual usage would look like without having to set up anything real.
Principle 3: Measure What Matters
We stopped caring about feature adoption metrics and started tracking value realization milestones:
- Time to first tracked hour
- Time to first timesheet view
- Time to first report generation
These behaviors predicted long term retention. Feature usage didn’t predict anything useful. Ever.
The Tracking Problem That’s Really Killing You
Here’s the uncomfortable truth about most SaaS founders: they’re making growth decisions based on vanity metrics and gut feelings.
They can tell you how many people visited their pricing page, but they can’t tell you why 90% of trial users never complete onboarding. They know their traffic sources, but they have no idea which onboarding steps correlate with retention.
When you can’t see where people drop off, you can’t fix it. When you can’t fix it, you blame the inputs.
“We need better leads” becomes the default explanation for everything because it’s easier than admitting “we don’t understand our own product experience.”
I built a dashboard for Hubstaff that tracked five critical metrics:
- Signup to first meaningful action
- First action to first value moment
- Trial conversion rate by onboarding completion
- 30 day retention by initial value realization
- Time to upgrade for successful trials
This dashboard saved us more money than every marketing campaign combined.
Your 30-Day Reality Check
Want to know if you have a leads problem or a conversion problem? Here’s how to find out:
Week 1: Face the Brutal Truth
Time your own onboarding experience. Pretend you’re a new user and go through your entire signup flow with a stopwatch.
How long until you reach genuine value? If it’s more than five minutes, you found your problem.
Pull your real numbers:
- Monthly trial signups
- Trial to paid conversion rate
- Exact drop off points in your onboarding
Survey 10 people who tried your product but didn’t convert. Ask one simple question: “What prevented you from becoming a customer?”
Their answers will hurt. Good. Pain is information.
Week 2: Design for Reality, Not Pride
Map the shortest possible path from “create account” to “holy shit, this solves my problem.”
Cut everything else. And I mean everything.
No setup wizards. No feature tours. No profile completion. No team invitations.
Just the core action that delivers core value.
The goal isn’t to show off your product. The goal is to create a believer.
Week 3: Build and Test
Create your minimum viable onboarding and A/B test it against your current flow.
Track what matters:
- Time to first value
- Onboarding completion rate
- Trial conversion rate
- 7 day retention
Simple wins over complex every time.
Week 4: Measure and Accept Reality
Compare the numbers. If your streamlined onboarding performs better (it will), make it permanent.
If conversion improves by even 5%, calculate the annual revenue impact. The number will be larger than you expect.
Plan your next iteration. Maybe you can get to value in three minutes instead of five. Maybe you can eliminate one more friction point.
Small improvements compound into massive advantages.
The Thing About Leaky Buckets
Most SaaS companies are like people trying to fill a bucket with a huge hole in the bottom. They keep pouring more water (leads) instead of fixing the hole (conversion).
You can spend infinite money on marketing and generate infinite trials, but if your product experience is broken, you’re just creating an infinite number of disappointed people.
The math is unforgiving: a 10% improvement in conversion usually beats a 50% improvement in traffic. And conversion improvements get easier over time while traffic gets more expensive.
Your product might be genuinely great. But if people can’t figure that out in their first session, your greatness is irrelevant.
Fix the experience first. Scale the acquisition second.
The order matters more than you think.
I help SaaS founders stop hemorrhaging trial users and start converting them into customers. If you’re tired of watching people sign up and disappear, we should talk. Because there’s no point in filling a broken bucket
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