---
title: "The Challenge Facing Mobile-First SaaS Companies"
description: "Explore why mobile-first SaaS startups face unique distribution challenges vs consumer apps, despite 1B+ mobile users. Key insights for founders \u0026 investors."
categories: ["SaaS","trends"]
keywords: ["mobile-first SaaS","SaaS distribution challenges","mobile app stores","enterprise software","consumer apps","Tomasz Tunguz","Theory Ventures","user acquisition","mobile engagement","B2B SaaS"]
ai_summary: "Mobile-first SaaS companies face unique distribution challenges compared to consumer apps, impacting user acquisition and revenue growth."
date: 2014-08-05
lastmod: 2026-07-30
canonical_url: https://www.tomtunguz.com/mobile-saas/
author: "Tomasz Tunguz"
---

For consumer products, the power of mobile distribution is hard to overstate. Facebook serves more than [1B mobile](http://mashable.com/2014/04/23/facebook-1-billion-mobile-users/) users each month. [Angry Birds reached 50M users in 35 days](http://visual.ly/reaching-50-million-users), a feat that took Instagram 18 months and Facebook more than 3 years.

But the distribution advantages of mobile app stores hasn't been observed as powerfully in SaaS or enterprise software for driving revenue. The majority of the [top 20 slots of the Business Apps Category in the iTunes store](http://www.appannie.com/apps/ios/top/united-states/business/?device=iphone) aren't occupied by startups. Nor has the story of a 3 year-to-10M user story been written about an enterprise application, yet. 

The difference between consumer and the SaaS startups' effectiveness leveraging mobile app store distribution hinges on the end user. In the case of consumer companies, the end user is the buyer. In SaaS, the end user is very infrequently the buyer. This is why mobile SaaS companies must employ a [two-step value proposition](http://tomtunguz.com/two-step-value-prop/), first convincing the end user to download and use the app, and second, using this data to initiate a sales process with the decision-maker within the enterprise. This second step, at least to date, has been the limiting factor in using mobile-app distribution to drive SaaS company growth.

However, SaaS mobile usage patterns are certainly following the lead of their consumer counterparts. It's not uncommon for many SaaS startups with mobile apps to see 30-50%+ of their usage on mobile, [a figure now common in ecommerce](http://www.businessinsider.com/the-three-leading-mobile-retailers-2-2014-1) and other consumer categories. 

There's no question that mobile has impacted SaaS companies' businesses. At the very least, SaaS companies must build a mobile application to maximize engagement with their userbase. Perhaps in the near future, an innovative startup will find a way to target both the end user and the enterprise decision maker through the mobile store. Until then, mobile app stores will remain great end-user acquisition channels, but won't replace the inside-sales process to close customers.