If you are dreaming about building the next unicorn startup, SaaS is a great industry to explore. The SaaS market is growing steadily — it was valued at $165.9 billion in 2021 and is expected to reach $720.44 billion by 2028.
This article will provide you with seven essential tips for starting your SaaS business and ensuring its success.
What Is SaaS?
Software as a Service is a delivery method for software applications where the company makes apps available over the web. Customers can access these applications from different types of devices at any time without having to install them first.
SaaS can go by many other names, so it is also commonly known as on-demand software, cloud-based, or hosted solution.
But, instead of just starting to build your product out of the first idea that pops into your mind, it’s crucial to take a strategic approach to launching your SaaS business.
Here are the seven helpful tips to follow.
Research the Market
It’s important to research the market before you dive in. An excellent way to do this is by looking at your competitors and customers, as well as understanding the industry trends and legal requirements.
Researching this market will help you determine if it’s a good fit for your business goals.
Do you have expertise in this field? Do you have sufficient capital to invest in building out infrastructure? Are there enough people willing to pay for such an application?
Once you’ve done enough preliminary research into whether or not there’s room in this space for another player, then comes finding new ideas within those niches.
Find Your Niche
Finding your niche is the first step to building a successful SaaS business.
If you have an idea for a service that can be implemented through software, it’s time to start thinking about who will be using it and how you can refine your concept so that it addresses their needs in a unique way.
Here are some questions you should ask yourself:
What problem does this product solve?
How does my solution differ from what’s already out there?
Why would someone choose my product instead of others on the market?
By answering these questions, you’ll gain insight into your product’s target customer base, find a potential market gap, and begin identifying where there may be an opportunity within that audience.
Write Up a Plan
Before you decide to hit the market, you’ll need to write up a business plan. However, instead of working on a traditional 40-page plan, you can take a lean business planning approach with a single-page pitch and get your ideas onto paper.
Your plan needs to cover some basic things:
- Strategy: your unique value proposition, description of the problem and your solution, description of the target market, and finally, how you differ from your competitors.
- Tactics: sales channels, marketing activities, resources you need.
- The business model: start with your primary revenue streams and key expenses. Later, you will create an accurate sales forecast, cash flow forecast, and expense budget.
- Timeline: outline your action plan with dates, responsibilities, and budgets.
Over time, your plan will change. It will become more detailed as your idea develops, especially while considering your funding options.
Test Your Idea with an MVP
Creating a minimal viable product — or the simplest version of your product — is a necessary testing method in the SaaS space. An MVP is used to test a product or a feature quickly and quantitatively.
Besides software prototypes, you can use explainer videos, mockups, or landing pages to showcase your MVP.
A minimal viable product will save time and money before you go ahead and build anything. It will also allow for feedback from your potential customers so that you can tailor the product that will cater to their needs before hitting the market.
Develop a Marketing Strategy
To stand out in an already-crowded market, figuring out how to position and brand your SaaS business is a must.
There are many ways to market your SaaS product — from affiliate partnerships and paid advertising to content marketing.
Content marketing is one of the most efficient ways SaaS businesses can find their prospects and offer a solution to their problems. Using a company blog, you can share helpful content on a relevant topic and attract prospects by addressing their pain points.
Besides running a blog, it’s crucial to implement a link-building strategy. In other words, you should get authority websites to link to web pages on your website. This will help your content gain more visibility and credibility, thus improving your company’s reputation and consequently boosting your bottom line.
Ensure You Have the Right Technology and Tools
There are a few tools that you’ll need to get your business started. The most important thing is to ensure that you have the right technology and tools in place before you start selling anything.
This will help ensure your success as a SaaS startup and can even save money down the line. For example, if you run a subscription-based service but don’t have any billing software set up yet, it’s going to be much harder for customers to manage their accounts once they sign up.
Focus on Customer Feedback
Your customers can be your best guide in building a successful SaaS business.
If you’re not listening to their needs and wants, or if you’re making changes without considering them, then you’ve already lost your focus on what matters most for success: the customer.
The key to making great products is understanding what the market wants and how that aligns with what’s feasible, given your resources and timeline. If you find that something isn’t working—or if there’s an opportunity for improvement—listen closely to what customers are saying and make necessary adjustments as soon as possible.
There are many challenges that come with starting a SaaS business, but you can rest assured that if you follow the advice we discussed and put a lot of effort into every aspect of your startup, you’ll be well on your way to success.