Save runway for 2-3 years minimum before starting a SaaS business
Most SaaS businesses take 2-3 years to generate enough revenue to pay basic living expenses. Founders who only save a few months of runway typically fail before reaching profitability. The SaaS model has excellent long-term economics, but the early period requires significant financial cushion to survive.
When to use
Before quitting your job to start a SaaS company, especially if bootstrapping without external funding. Critical for solo founders who can't split living expenses.
Don't do this
Quitting with only 3-6 months of savings and expecting to reach profitability quickly, then running out of money and returning to employment before the compounding effects kick in.
2 Founders Who Did This
Saved enough to survive 2-3 years with minimal revenue, worked extremely hard in years 1-2 while making barely any money
Saved 1-2 years of living expenses while working at AWS before quitting to go full-time on indie projects