How To Kick SaaS
  • Introduction
  • Forward
  • Who & How
  • The business of SaaS
    • The Business of SaaS
    • Basic Lessons of Saas
    • The Process
    • Parts of a SaaS
  • Validating You SaaS
    • Validating Your SaaS
    • What happens when you don't validate
    • The SaaS Validation Process
      • Why are you doing this?
      • Should you do this?
      • Competition Analysis
      • Buyer Analysis
      • Sales & Distribution
      • Time & Money
      • The Secret Sauce
      • Buyer Categorization By Sales Method
      • The Advisory Approach
    • Validation Success
  • SaaS Build Process
    • SaaS Build Lessons
    • Planning & Costing
      • The Costing Process
      • The Estimate
      • The Scope of Work
      • Information Architecture Development
      • Working Numbers
      • The Project Plan
    • Build Team Roles
      • What To Expect From Your SaaS Development Team
      • Build Teams
      • The Project Manager
      • Information Architect
      • UX Designer
      • Developers
      • Quality Assurance
    • Standard Tools
      • Project Management Tools in SaaS Development
      • Development Environment & Dependencies
      • Remote Development Environments
      • Code Repositories in SaaS Development
      • Monitoring Your SaaS
    • Steps to Developing a SaaS
      • What to expect in SaaS development
      • Systems Setup
      • Creative
      • Project Planning
      • SaaS User Experience (UX)
      • Concept Design
        • SaaS UX Design Case Study
      • Content Development
      • FrontEnd Development
      • BackEnd Development
      • Quality Assurance (QA)
      • Alpha Testing
      • Beta Testing
      • Launching Your SaaS
      • Continuous Integration
    • Things to know and expect
      • You MUST learn at least the basics of Project Management
      • Things you do and do not know
      • How to tell if your development team is working
      • Good, Cheap, Fast. Choose Two.
      • Positivity is Key in Management
      • Storytime: The Story of a Ton of Lost Users and Money!
      • Development is iterative
      • Development Time Increases As Complexity Increases
      • Storytime: Don't Send Me Shit
      • Story Time: The Best of the Best
      • Sunk Costs
    • Your SaaS MVP Pre-Development Build Checklist
  • Appraisement: Pricing Your SaaS
    • Appraisement: SaaS Pricing
    • SaaS Pricing Metrics
    • SaaS Pricing Metrics Glossary
    • Science of Pricing
    • What You Need To Know About Your Customers
    • How To Price Your SaaS
    • Customer Types Case Study
    • Storytime With Brennan
    • Pricing Page: The Most Valuable Page On Your Website
      • Pricing Page Examples
  • Acquisition: Gaining SaaS Users
    • Acquisition: Getting SaaS Users
    • SaaS Traction Lessons
    • Acquiring your first users
    • Getting ready for growth
    • Organic Search Marketing
      • Content Marketing Is An Investment
      • Step 1: Keyword Research
      • Step 2: Content Planning
      • Step 3: Writing, Formatting, & Beyond
    • Marketing Automation in SaaS
      • Marketing Automation Basics
      • Storytime: Learning about marketing automation the hard way
      • Lead Scoring, Tagging, & Triggers
      • Marketing Automation Systems
    • Lifetime Deals
    • Outbound Campaigns
    • Affiliates & Partnerships for SaaS Businesses
    • Narrowing Your Message With Adaptive Design
    • Social Media Marketing
      • Social Media Retargeting
      • Testing your social media ads
      • Social Media Ad Tricks
    • Pay Per Click (PPC)
    • SaaS Software Checklist
    • Email Marketing
    • The Marketing Website
  • Activiation
    • Activation
    • Getting Personal
    • Stalking Your Users
    • Onboarding
    • Training Webinars
    • Onboarding Emails
    • New User Tour
    • Setup Checklist
  • Attrition: Supporting Your Community and Growing Your Business
    • Supporting Your SaaS Customers
    • SaaS Community Building
    • Chatbots
    • Events
    • Swag
    • Education
    • The Knowledge Base
  • NOTES
    • NOTES
    • The best growth hacks no one wants you to know
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On this page
  • A ‘sunk cost’ is:
  • The status of my projects
  • Started but didn’t finish
  • Started and failed
  • Started and Growing
  1. SaaS Build Process
  2. Things to know and expect

Sunk Costs

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Last updated 6 years ago

Before you get started, I think it’s an important time to discuss my projects that got to the point of being built and never got off the ground. More than anything, we need to talk about the concept of ‘Sunk Costs’. If you think back to your Accounting 101 class in high school or college, this may sound familiar to you.

A ‘sunk cost’ is:

A cost that an entity has incurred, and which it can no longer recover by any means. Sunk costs should not be considered when making the decision to continue investing in an ongoing project, since these costs cannot be recovered. (taken from: )

What this means to you is that just because you spent all this money and time getting this thing ready to go doesn’t mean doing it is the right choice. This is also known as the “Sunk Cost Fallacy”. The misconception is that you make rational decisions based on the future value of investments and experiences. The truth is that your decisions are tainted by the emotional investments you accumulate, and the more you invest in something the harder it becomes to abandon it.

The status of my projects

To illustrate this, let’s take a look at my personal projects that did and didn’t get started at or before this point:

Started but didn’t finish

  • Incentivs - sales gamification, just like what is now Ambition.com

  • Dogwalkit - pretty much just like Rover.com.

  • Leadbutton - lead gen system

Started and failed

  • RIS - practice management system for diagnostics imaging

  • The GuideFor Platform - ratings and reviews system for specific industries

  • Guide for Seniors - Content platform for seniors and the caretakers of US senior citizens

Started and Growing

  • Map Dynamics - Web-based mapping, agenda management, and sales system for trade shows, focused on associations.

  • BrainLeaf - Project scoping, approval management, digital signatures, and financial reporting tool for digital agencies. We use this extensively at my agency, JHMG, so it is always growing.

  • Medrev - Reputation management for larger healthcare groups, outpatient care, and hospitals. Just getting started, but looking good so far.

  • Diagnostics Marketing - Marketing platform and productized services company for diagnostics imaging

Right now, we’re running 4 for 10. Not great -- or so it seems. What is important to note here is that I got started, realized I didn’t have some aspect of something I needed to do the project, and abandoned it. In most of these cases, had I gone forward, I would have failed. But I didn’t realize it until I did some or most of my planning and actually got going on the project.

PROTIP: If you don’t feel good about it, don’t do it. You’ll probably just be throwing your money away anyway.

The application build process should only be started in you have done all of your planning. I want to say it again for you so you don’t waste your money and time: THE APPLICATION BUILD PROCESS SHOULD ONLY BE STARTED IF YOU HAVE DONE ALL OF YOUR PLANNING. So don’t stop here and start building; read the rest of the book first.

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