Many would-be entrepreneurs in the domain of Software as a Service (SaaS) are put off by the subject matter. This is unfortunate because SaaS can be a genuinely rewarding domain for anyone courageous enough to try it. This guide will outline seven easy steps to help you build your SaaS empire from the ground up.
Step 1: Start with the Problem
Once this is established, the first step in building a SaaS business is identifying the problem worth solving—the initial ‘problem space.’
Many would-be entrepreneurs mistakenly start with a product’s design and technical specifications without first establishing what they are designing and whether customers would pay for it. Begin by consulting with potential users to better understand their pain points. Ask questions such as: ‘If your current system had a deadly virus, how quickly would you require a new one?’
Try spending some time in the industry that you want to service. Talk to technology companies and ask them what their customer’s problems are. This will help you to identify market gaps without the huge risk of building something that no one will want to buy.
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Another thing that works is to maintain a ‘frustration list.’ Note everyday frustrations for you and others. Part of what will make your product appealing to people is that they can say: ‘Yes, I, too, get frustrated by that.’ Think of all the hapless assistants whose life tasks are admining their day to day via an overly complicated spreadsheet.
The key is to identify a pain point that are large enough for people to pay for the solution.
Step 2: Build a Prototype (Wireframe)
Having now identified a problem, you go on to map out a prototyped version of its solution, a wireframe that illustrates the potential flow of the software and gets user input before any money is spent on development.
Use tools like, Balsamiq or Figma. After you have finished your prototype, show it to potential users to collect their feedback. It is very costly to proceed further into the process and realize that your concept needed to be corrected.
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For example, if you’re thinking of building a system of property management for landlords, talk to both landlords and tenants. That way, you’ll know what’s working, what’s needed, and where there are issues or opportunities for improvement.
Step 3: Validate Your Product
You absolutely need validation. Creating an early adopter program is an excellent way to test your proposed product. Bring a prototype to potential users and ask them to commit to buying a license now, even before the production version of the software is created. Offer a discount for early-bird purchases.
For good measure and as an essential reality check, Crowdfunding also helps test the value of your idea. If you can get users to give up cash before your idea is even developed, chances are you’re on to something worth pursuing.
You can also ShadowBox your idea using an ‘authorization’ checkout. This method is similar to Crowdfunding but can provide feedback from your marketing channels by getting users to enter the purchase funnel without actually collecting a payment.
Crowdfunding is an effective way to raise funds early in a business’s life, and also generates an early community of invested users who can suggest useful ways to improve the product.
Step 4: Build Your Minimum Viable Product (MVP)
Now that you have validation, it’s time to build your MVP (‘Minimum Viable Product’). It’s important to remember that the ‘V’ in MVP also stands for valuable. You have not created an MVP if you can’t gather measurable value from your product’s iteration.
With an MVP, consider building the bare essential features that solve the core problem you’ve identified through your research. This will allow you to rapidly launch and start acquiring your users without overwhelming your time or your team.
Set a 90-day development deadline, as it forces you to be ruthlessly frugal (and will help ward off feature creep). Outsourcing your MVP’s construction to a freelance developer on a bidding platform such as Upwork can prolong your reserves (and keep it lean).
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To keep a strong foundation, the MVP must be built using something close to a development-quality codebase. While it is possible to tailor no-code solutions for specific purposes, as a rule, no-code should only be avoided if you are okay with the product potentially becoming less scalable and being unable to change functionality in the long run. These no-solutions are getting better but should not be used to develop the entire product and used sparingly in areas.
Step 5: Collect Customer Feedback
Once your MVP is in the market, focus on collecting user feedback. Direct customer interaction can give you insights that numbers alone won’t provide. Hold regular check-ins with customers and ask pointed questions about their experience with your product.
Set up a system for collecting and analyzing feedback and making changes to the product based on what users say. This process can rapidly increase user satisfaction and retention.
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Pay attention to areas of friction and opportunity, and aim to iterate your product based on actual user experience rather than assumptions.
Step 6: Generate Demand
With refined products, it’s time to generate demand. There are numerous strategies; however, one must be cautious. It is essential to assess market needs because understanding the target audience (is crucial).
This requires a thorough analysis; although some may overlook this step, it can prove vital. Furthermore, crafting a compelling narrative around the product (enhances its appeal), but it can take time to maintain consistency. Overall, careful planning and execution are crucial to success in this endeavor.
- Content Marketing: Publish valuable content related to your industry to attract potential customers.
- Paid Advertising: Use targeted ads to reach your ideal audience.
- Partnerships: Collaborate with businesses that already have access to your target market.
- Press Coverage: Seek out opportunities to be featured in relevant publications.
When done right, partnerships can be your most powerful form of distribution by letting you leverage existing customer bases. Offer affiliate programs to partners so that they can receive a monetary incentive to promote your solution.
Step 7: Find a Growth Hack
Third, look into ‘growth hacking’ techniques that might let you disrupt the status quo – such as using unconventional marketing methods or leveraging other platforms to reach your audience.
For example, you could reach out to influencers with large followings in your industry to have them endorse your product and send traffic your way. You could offer them a commission on every sale they send you in order to encourage their involvement.
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Remember, a growth hack works only if it’s specific to your situation and can be scaled over the long term. Monitor market trends and user behavior to find new growth opportunities.
Getting a SaaS business off the ground is a learning experience. If you follow this guide, you will be well on your way to building a successful SaaS business for the long term.
–Written by Vance R, edited by Grammarly