Under the conditions of globalization, more and more countries of the world are becoming IT outsourcing centers. Recent trends show that for many companies that want to delegate software development to an outsourcing company, geographic proximity, cost, and language skills are the determining factors in choosing a developer. As a result, the usual model of offshoring-onshoring is gradually giving way to nearshoring.
2023-01-0513 min read
CHAPTER #1 Why Focus on SaaS?
According to Statista, the global SaaS market is expected to reach $195 billion by 2023. Companies estimate that 70% of the business software they use is based on the SaaS model, demonstrating the growing use of this approach.
Here are some reasons for creating a SaaS product:
● Flexibility – the solution can be accessed from any device, doesn’t require installation, and all updates can be immediately applied without affecting the workflow;
● Profitability – SaaS companies frequently achieve gross margins in the 60–80% range with multiple pricing models and income possibilities;
● Security – SaaS software is located on the cloud and utilizes modern security measures, minimizing vulnerabilities and removing the possibility of piracy.
Examples of well-known software-as-a-service products include Netflix, Zoom, Trello, Shopify, and thousands of other vendors. It is most likely that you’ve used at least one of these products before.
CHAPTER #2 How to Start a SaaS Product in 10 Steps
The following steps will provide you with a successful product launching strategy to grow your software and gradually overcome the competition. Each point is crucial to achieving your goal.
1. Validate your idea
Understanding whether your idea is needed in the industry is one of the most important things to know before starting the development process. If you think that something must be interesting and profitable, it doesn’t always mean that the community will have the same opinion.
The best way to validate your idea is by:
● Talking to your customers. You can conduct surveys, one-on-one interviews, and run ads to see what people think about your product. This will give you real-world feedback that is essential for determining the most effective way to grow.
● Conducting independent research. Your product probably solves a certain problem, so you can search the web for similar solutions and customer opinions. People often tend to discuss their issues on various forums or social media, and those are the perfect data sources for you.
● Developing an MVP. A minimum viable product is the simplest version of your software that runs using only the must-have functionality. It is practically the best way to test your hypothesis in practice with real customers.
It isn’t necessary to strictly confirm or deny an idea. Sometimes, you might understand that you’re moving in the right direction but need to apply some adjustments. That’s absolutely fine as the validation stage is required to refine your product’s foundation.
2. Research your competitors
Promoting a SaaS product when there is so much competition is a great challenge. You have to understand the way the leading market players in your industry act to gain the attention of their audience. This includes following multiple strategies.
First of all, you must understand who is your competitor. This may be done by typing keywords that are relevant to your niche into Google search. Check out who appears on the first page. This covers both advertisements and organic results.
Then you must conduct deeper research on each brand:
- Define their products’ features to see what you need.
- Analyze their audience to determine the right approach.
- Read their reviews to understand potential weaknesses.
- Check their social media to see how they promote themselves.
Analyzing a single competitor may take several days. You must cope with the process and research each in detail because it’s an integral part of success.
3. Fund your project
The average funding of series A startups is $15 million. This money is needed to develop your SaaS product, maintain a team, and promote the application. If you have the required funds, then you can fund the project and maintain full control over it. However, if you don’t, you need to go the extra mile to find an investor and give up some control.
If you search for private investors, there will usually be two options:
- Venture capitalists – investors who fund your project in exchange for multiple benefits like a place on the board of directors, a percentage of future profits, or anything else.
- Angel investors – investors who fund your project only to make a significant profit, usually going for the long-term challenge.
There are many options where you could find one of these investors. They frequently attend networking events and startup accelerators, so try making as many acquaintances as possible.
Keep in mind that you must have a thorough business plan and a 30-second elevator pitch to increase your chances of success. You must get the investors interested in your project with a brief overview. After you grab their interest, the detailed plan will help them evaluate the product’s potential.
If you don’t like this idea, you could try crowdfunding. This is when multiple people invest small amounts of money in a business, usually getting a reward once the product is developed. Some popular crowdfunding platforms include Kickstarter and StartEngine. We’ve also covered several European startup accelerators in our previous article – check them out!
4. Choose a pricing model
SaaS products can provide different pricing models. These are usually divided into subscription-based access and lifetime access. The former is more popular because it is capable of generating a larger income when planning for the long run.
If you sell lifetime access to your software, let’s assume that the value would be $100 per customer. Consider this as a single sale opportunity because you are unlikely to be able to sell anything else to this same person later on.
A subscription-based model could be $10 per month, bringing you a constant income as long as the customer keeps on using your service. You could also provide different subscription packages that unlock various features, potentially increasing your income.
Here are some things to consider:
● Subscription period: weekly, monthly, annual;
● Subscription packages: number of features per each;
● Subscription price: determine the adequate pricing to cover the majority of your audience.
If you feel unsure about any of these points, then watch your competitors. They are likely to apply these points in their products and this could lead you to some ideas. Remember that you must build a better product. Otherwise, clients won’t see a reason to use your services.
5. Determine the MVP requirements
A minimum viable product is the basic version of your product that integrates only must-have features. It is developed very quickly without spending too much of your budget. This step is essential to test your idea and develop a successful SaaS product.
Here’s how to define the features of your MVP:
- Determine the biggest issues of your audience;
- Decide how your product will solve these issues;
- Analyze how your audience solves these issues now;
- Define your app’s unique features.
Usually, an MVP includes 2-3 core features that solve the user’s problem and demonstrate your product’s uniqueness. Adding more features would drastically increase the required time and costs. You can learn more about SaaS development and the points to consider in our previous article.
6. Set the must-have and nice-to-have features
While you already understand the core functionality of your SaaS product during the MVP stage, it is essential to create a list of must-have and nice-to-have features. This will help you build long-term plans for the future development process.
Imagine that you’re developing an online video-sharing platform. Here are some examples of the features:
Having a clear definition between these two types is useful to create a robust and well-balanced plan. This way, you’ll consider both the technical functionality and unique features of your software.
7. Involve real users
The best way to test your MVP is by collaborating with your target audience. This involves gathering their feedback and opinions to hone your product. However, finding customers who would be willing to participate in the test requires a developed marketing strategy.
Here is how you can find users to test your MVP:
● Run ads on social media like Facebook;
● Develop a landing page and advertise it on Google;
● Start a blog to attract organic traffic;
● Use cold calls to propose users to test your product that would solve their XYZ issue.
Once you get people to use your MVP, you will have to gather their feedback. This can be done with surveys and one-on-one interviews. The more data you get, the better.
8. Market your SaaS product
The active marketing phase usually starts 6-8 weeks before your SaaS product launch. This is required to generate interest and have a ready user base upon release.
Here are the most important steps to consider:
- Develop your website. You will need a well-made landing page that covers your product’s value for the customer. Also, you might want to consider launching a blog with robust SEO optimization. However, you must remember that blogs are usually used for long-term results.
- Utilize social media. Companies mostly use Facebook, Instagram, and LinkedIn to promote their products. This includes content marketing and targeted advertising.
- Use Google AdWords. This will help you appear first in the search results when users enter certain keywords while surfing the web. You could also use banner ads on other websites with this marketing tool.
Overall, there are many marketing channels that you can use to promote your SaaS product. Companies often spend more than 10% of their budgets to attract clients. It doesn’t end upon release. Marketing must support your product at each stage, constantly getting a larger user flow and increasing revenue.
9. Collaborate with a reliable SaaS partner
You have to collaborate with top-tier experts to develop a successful SaaS product. This will let you implement any features you want and keep the solution optimized. However, you have to ensure that you work with a trusted partner.
Here’s how to choose the best software development company:
- Check their case studies and experience.
- Read their client reviews.
- Find out their hourly rates.
These points will help you understand whether you’d be a good match with this company. You could try working with SapientPro. This company was awarded as the top B2B development company by Clutch. The vendor has a reliable team of industry experts who’ve developed dozens of robust SaaS products with different complexity. Contact them now to get an estimate!
10. Use feedback to grow
Bugs and issues are inevitable. Your users are likely to find some of them after you launch your product. That’s why it’s necessary to set up a feedback mechanism that would help you grow.
There are two key options that you could use:
- A “send us a message” form on your website.
- A pinned post on social media asking users to share their feedback.
You must consider both positive and negative feedback because each comment can help you improve your product. However, don’t follow all the ideas blindly. Discuss the possible changes with your team and adapt your strategy accordingly.
CHAPTER #3 What Expertise Does Your SaaS Product Need?
Creating a SaaS product requires assembling a professional team with experience in your industry. It’s the cornerstone of developing a successful solution that would attract customers and help your business grow.
Although the team composition may vary, these are the roles that you will need in most cases:
● UI/UX designer – creates the visuals for your app and ensures it’s user-friendly;
● Back-end developer – works on the server-side functions like security, data storage, etc.;
● Front-end developer – works on the client-side functions to build the elements a user interacts with;
● QA engineer – tests the software for performance, speed, usability, and bugs;
● Project manager – plans, organizes and monitors the completion of the project according to all the requirements.
Your software development partner will help you choose the right expertise when they get acquainted with your requirements and expectations.
CHAPTER #4 How to Choose a Software Development Team for SaaS?
Choosing the right software development partner for your SaaS project is challenging because there are hundreds of companies with similar offers. However, not all of them are a good match for you. You need people who can bring your a solution from their hands-on experience.
This is how to choose the best software development team:
- Check their case studies on Clutch.co. You should ensure the team has projects that are close to your idea. Keep in mind that some projects might be under an NDA, so they might not be listed.
- Read client reviews on Clutch.co. Customer testimonials are a great way to find out the benefits and pitfalls of a company. This will help you get an insider view of what’s going on there.
- Ensure your budget meets their rates. Not all companies share their rates online, so you might want to talk about budgets during your first interview. It’s important that the expectations of both parties are met.
- Ensure smooth communication. It’s necessary to know the frequency of team meetings, communication channels, and expected response speed. All these factors are discussed as a separate element in your contract.
Of course, there are many other factors to consider. We’ve mentioned the most important features that usually play a decisive role in decision-making.
CHAPTER #5 How Much Does it Cost to Develop a SaaS Product?
The costs of developing a SaaS product depend on its complexity, features, tech stack, third-party integrations, and many other factors. Your development team’s location also plays an important role in the formation of the price.
For example, a company from the US would charge anything between $150-250 per hour. Teams from Eastern European countries like Ukraine usually charge between $45-70 per hour. Considering the maximum possible rates, you could save 72% of your budget.
However, there is no way to calculate the precise SaaS development costs without analyzing your project’s requirements. You need to get a technical team to research the solution and provide an estimate. That’s the only way you would get an approximate understanding of the required budget.
CHAPTER #6 Partner with a Reliable SaaS Development Team!
SapientPro is your reliable SaaS development company for both large-scale and small projects. Our team has relevant experience and knows how to create scalable, efficient, and good-looking products that keep your customers engaged and help your business grow.
We help startups and businesses develop their products using the best practices in the industry. Our experts will guide you through the whole process, helping you avoid pitfalls and choose the most effective solutions. Your success is our success, so we do our best to achieve maximum results.
For example, our client Contentoo started as an MVP in 2018 and raised $1M of investments in 2021 & $5M in 2022. SapientPro keeps on collaborating with the platform, providing updates and supporting the service.
Let’s start building a powerful SaaS product for your business. Contact us today!