What is the SaaS Growth Pyramid?

The SaaS Growth Pyramid

The SaaS Growth Pyramid is a framework I use to diagnose why a SaaS company stalls or fails to scale. Think of it like Maslow’s hierarchy, you can’t move to the next level sustainably until the one below it is solid.

Level 1: Product–Market Fit (PMF)

Product–Market Fit (PMF) is all about asking the core question: Do people truly need this?

If your consumer lacks a deep, painful problem that you solve, then you don’t have a clear consumer base who has strong enough demand.

Symptoms of this are:

Customers churn after a few months
Sales cycles are long and rely on discounts
Founders still “explain” what the product does rather than buyers instantly “getting it”
Feedback is inconsistent or contradictory

To overcome this, try narrowing your ICP (ideal customer profile) and focus on solving one specific use case until retention exceeds 80–90%. Once you identify that thing that makes customers have that ‘aha’ moment, then you can optimize the onboarding process to drive users there faster.

Level 2: Positioning & Messaging

Positioning & messaging often get confused, but they are distinctly unique. Positioning is all about creating a clear story and differentiation. Why should customers choose you. If you don’t have that clear distinction, and you look exactly like your competitors, you don’t have a brand, you have a commodity, and there’s no reason to choose you other than price. So it becomes a race to the bottom as they say.

If prospects compare you feature-for-feature with competitors, then it’ll be harder to charge premium prices.

Unsure you define your category and frame competitors as outdated or incomplete. Then you can craft messaging that speaks to emotional outcomes (not just features). Use customer language, not your own, in marketing copy.

Level 3: Go-To-Market Alignment

Part of finding product-market fit is being able to predictably acquire and retain customers. Often this comes down to a misalignment between marketing, sales, and success.

Leads are unqualified or churn quickly, sales blames marketing; marketing blames sales, and customer success is firefighting, not expanding accounts.

Instead, build a feedback loop between acquisition → activation → retention.

Use a single metric (e.g., LTV:CAC (customer acquisition cost) or NRR (net reoccurring revenue)) to align the org.

Ensure you optimize for retention before scaling acquisition.

Level 4: Growth Loops

I’m a firm believer in growth loops, and have written about it before – What is the Biggest Limiting Factor for SaaS Growth?

Essentially, you want growth to compound automatically and have less of a reliance on paid acquisition or one-off campaigns.

If CAC rises faster than LTV and marketing feels like constant reinvention (where virality, community, or integrations aren’t leveraged) then you don’t have a sustainable business. You have a flash in the pan that eventually will fizzle out.

Identify self-reinforcing systems:

Viral Loop: Users invite others (Slack, Loom, Notion)
Content Loop: Users generate content that attracts more (Webflow, Figma)
Data Loop: Usage creates insights others value (Ahrefs, HubSpot)

Invest in community, education, and brand trust.

Level 5: Capital Efficiency & Scale

Is your growth sustainable – that’s the million-dollar question.

Growth is fragile, expensive, or unprofitable. In so many cases, businesses need constant fundraising to maintain burn, metrics look good top-line, but margins or cash flow lag, hiring outpaces culture or operational maturity, etc.

The most successful companies prioritize Net Revenue Retention (NRR) over new MRR, they automate internal processes (billing, onboarding, renewals), and invest in brand to lower future CAC.