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The SaaS industry is now worth over $145B globally, and forecasts state that it will grow to around $171B this year.
And it’s a trend we see here at Altar.io. We help entrepreneurs and business leaders bring new tech products to market – and more and more of those products are some form of SaaS.
But what does it take to build a successful business in the SaaS industry?
In this article, I’ve boiled down my experience building SaaS products into a 5 step plan to increase your chances of success.
Step #1: Craft Your Value Proposition
The first step in building a successful SaaS product is to define how it will provide value to your users.
This all starts with the problem you’re trying to solve, the people you’re solving it for, the competition in your market, and how your solution is better than that competition.
Here’s how to do that step-by-step:
- First, define the problem you are trying to solve.
- Then, how will your SaaS product solve that problem?
- Who are your target users? Here I recommend creating UX personas using demographics, psychology, and behaviors
- How do your target users deal with the problem today? Know what your competitors are doing to serve your market.
- Why is your product better than the current solution? What can you offer that the current solution doesn’t?
- Craft an Elevator Pitch – using all of the information you have determined, create a simple, crystal clear pitch that sums everything up succinctly and accurately.
Here’s a template you can use for your pitch:
[Name of your SaaS product] has been created for [your target stakeholders] who [state the problem they face]. [Name of your SaaS product] is a [statement of its vital value]. Unlike current solutions, we [explain what differentiates you from the alternatives].
Step #2: Set Your Main Assumptions
Your value proposition, at this stage, has some assumptions surrounding it.
You’re assuming that people have a specific problem and that yours is the solution they need.
Write a list of the assumptions you have surrounding your product.
The easiest way to validate assumptions is through research. Start by looking at your competition to see if they have already proven the assumptions on your list.
For the rest, you will need to validate them by building your product – typically using the MVP, POC, or waterfall model.
Step#3: Validate your Assumptions
Now you need to validate the assumptions you set in the previous step by building the first iteration of your SaaS product. Again, I would personally recommend the MVP model to do this.
Using your list of assumptions, define which features you should build to ensure you validate them in the shortest time possible.
When you have a concise list of features, you’ll be ready to move on to the first stage of development, choosing your tech stack.
If you choose to build an MVP, don’t just focus on the “minimum.”
Step #4: Choosing the Tech Stack for Your SaaS Product
If you’re a non-technical entrepreneur, I recommend talking to a technical stakeholder before committing to any tech decisions concerning your SaaS product.
Here are the most popular technologies used in a SaaS product tech stack to help you get started.
- Frontend Javascript frameworks such as React, Angular or Vue.js
- Backend development: Node.js or Django
- Database: PostgreSQL, MySQL, MongoDB
- A SaaS hosting provider: Amazon Web Services (AWS), Google Cloud, Microsoft Azure
Step #5: Onboard a Development Team
If you’re a technical founder or have already built your development team, congratulations, you have everything you need to build the first iteration of your SaaS product.
For my fellow non-technical founders out there, you have three options for finding software development for your SaaS product.
You can either find a CTO/Technical co-founder, hire a team of developers (who you’ll have to manage) or work with a software development company.
I won’t go too depth into this topic here. However, my co-founder, Rui Lourenço, has written an entire article How To Build a Successful Minimum Viable Product on [https://altar.io], and it covers this topic in more detail.
If you can find the right CTO or tech co-founder, onboard them as soon as possible.
It’s better to bring in that senior technical stakeholder on your team as early as possible.
That being said, finding that person often takes a lot of time and effort. The other options can help you maintain a shorter time to market. Just ensure you bring in professionals who follow the best working practices.
Image Credit: Pavel Pavel Danilyuk; Pexels; Thank you!
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