How to Build a Successful SaaS Platform from Scratch

25 August 2021

Veronika Nedashkovskaya

Content Manager

Because of its convenience, SaaS has become a very popular software delivery model. Most SaaS products are web and mobile applications that do not need to be installed and users pay a fee for the product every month. These factors make Saas a great solution for the provider and users as a service. A SaaS solution is the ultimate tool in solving any problems for users, while it is a profitable product for business owners. The development and startup of software as a service application requires time, money, and, naturally, thorough research, as in any business project. There lies a complex SaaS development process between a clear concept of a successful cloud-based product and its execution.

How do you create a SaaS product? As a custom software developer, we would love to share our expertise in the development of custom SaaS. Therefore, you will find out what SaaS technology is, how to develop a SaaS application, and why it is important for businesses to operate and develop.

What is a SaaS product?

SaaS, or software as a service, refers to the use of the cloud to deliver licensed software that users can then pay for on a subscription basis. Because the software maker hosts their product on their servers, SaaS products are sometimes referred to as a "hosted solution" or "web-based solution." SaaS products are also frequently referred to as "cloud-based" solutions. A desktop-based model, on the other hand, is where an individual or company installs software on their computers and runs it on their servers. You'll need to be able to quickly explain this general benefit and elevate it with the value proposition of your specific solution for your own business.

DropBox and Google Apps are two examples of popular SaaS companies. Users do not need to install anything on their devices to use successful SaaS platforms because the application is hosted by the server provided. Any updates and subsequent maintenance are handled by the host site and are not visible to the user. The product is not sold with a perpetual license, but rather through a subscription model.

Advantages of the SaaS model

We defined the key benefits of SaaS-based products to explain their rapid rise in popularity. These reference points will help you understand how to create a SaaS product. Let's take a closer look at them.

Simple installation:

The software is installed and hosted in the vendor's cloud environment. As a result, when compared to the traditional on-premises model, the deployment process is sped up.

Cost-effectiveness:

The on-premises model includes a license for a one-time fee. However, the SaaS platform development entails very convenient subscriptions.

Updates:

Customers do not need to purchase and install upgrade packages to obtain the most recent version of a SaaS product.

Great flexibility:

Saas development platform offers many subscription models adjustable to any company’s growing needs.

Types of SaaS applications

  • There are numerous options for cloud-based applications. Some of the most well-known are as follows:
  • eCommerce software that aids in the operation of a business online, such as BigCommerce or Shopify, and includes product management and payment integrations.
  • Vertical SaaS development platform - products designed for a particular niche that optimize business processes
  • Collaboration software, such as Miro, that aids in communication and information sharing.
  • CRM (customer relationship management software) such as HubSpot, aims to automate sales and marketing processes.
  • ERP (enterprise resource planning software), such as Oracle, manages business processes.
  • Project management software, such as Jira, assists project managers in collaborating with their teams.
  • Billing software, which covers all payment procedures with a single click like Tipalti

How to build a SaaS application from scratch

Market analysis - validate your idea

Your product's long-term success depends on extensive market research, which provides insight into your competitors and the needs of your potential customers. This research will validate you and help you avoid making the same mistakes as those who failed. You must ensure that your target market is willing to pay for your product and that your offer meets their needs. Make certain that your business model provides them with clear and recurring benefits and is appealing to a large audience.

Ask yourself a few basic questions. Like:

  • Who is my prospective customer?
  • How does my product differ from others on the market?
  • What is its unique selling point if a competing product exists, and how is my product different from theirs?
  • What business model should I use to generate an ARR as soon as possible?

Once you've typed these ideas on a whiteboard and discussed them with the team, it's time to write down your vision. It is critical that you have a clear vision of how your product will look and that you research where your competitors have failed.

Get your business plan ready:

If you're thinking long-term, which we hope you are, you'll need a road map. This roadmap will determine whether your SaaS product will succeed or fail in a highly global market. A business plan is a detailed description of how to start a SaaS company in your specific niche. Simply put, you must find solutions to all of the steps involved in developing a SaaS product. Let's go over the key elements you should include in your business plan if you want to know how to build a SaaS app.

Strategy for monetization (pricing model):

The SaaS technology provides numerous ways to profit from your future product. At the start of SaaS software development, defining the monetization strategy is critical. It directly impacts how you will build SaaS app functionality and will assist you in understanding how to sell SaaS technology products after they are released.

Tactics:

List your sales channels and describe how you plan to sell your products in the tactics section. You should also include a list of marketing activities that will bring customers to your door. List the key partners and resources you will require, followed by your core team and their roles. If you don't yet have a team, make a list of the positions you need to fill.

Schedule:

You'll outline your action plan for moving forward with building your business in this section. A schedule of tasks or milestones will be included in your action plan. So that you can hold yourself accountable, these will be mapped onto dates, responsibilities, and budgets. Because business planning is iterative, you'll probably reconsider your action plan and add more steps as you go. You're ready to move on to the next phase once you have all of your ideas in one place and a clearly defined problem and solution.

Discuss the SaaS requirements:

Certain things have in common with SaaS products, so a clear personalization plan, integration, and security are essential. Ensuring maximum security in a SaaS model is critical because it is the foundation of a good solution. Consumer demands are constantly changing, and you must be able to adapt to them. Your software should also be designed to handle an increasing number of users without stuttering. The functionality of your SaaS product will vary depending on your niche and pricing strategy, but it should include the core principles of a good SaaS product. They will help you stand out from the crowd in a positive way.

High security:

When transferring customer data in the cloud, you must ensure that it is protected against multiple vulnerabilities and hack attacks. It includes identity management, multi-factor authentication, access control, and other features.

User-friendliness:

Make your SaaS application easy to use. Ease of use entails providing customers with simple navigation, fast page load times, and intuitive UI/UX design. Avoid complex and large text blocks, a lot of JS scripts and CSS styles that slow down your SaaS product's performance, and a lot of motion design that turns your app into a heavyweight appalling website with a low conversion rate.

Real-Time Support and Maintenance:

Any software, including SaaS products, contains bugs and errors from time to time. We recommend that you select SaaS products that provide ongoing customer support so that you can overcome any challenges that your end-users may face.

Define the MVP:

Having a minimum viable product involves deciding the basic core features that will provide value to your customers while risking the least amount of cost on your part. An MVP is what early testers will try out and what will become the final product. Answering questions like your user persona, what actions users take to solve their problems, and what solutions you can propose is an easy way to define the minimum viable product. MVPs allow you to collect end-user feedback and determine whether customers are willing to spend their money on your product. Once you've completed your MVP, you can proceed to the next step. So, here are the key objectives of building an MVP for your SaaS app:

Gather feedback and validate your business idea:

The primary goal of an MVP approach is to collect early user feedback and determine what features to add/remove/update based on what they like/dislike.

Check the market situation:

After gathering feedback from potential customers, you can determine whether your value proposition is in demand among your market's target audience.

Explore pricing models and initial customer acquisition:

Subscription-based pricing is common in SaaS products. So, instead of paying once for a lifetime of use, your customer pays on a monthly or annual basis. Consider it as a software license. It's a popular model because each customer has a higher potential lifetime value. Instead of charging a flat lifetime value — such as $120 for a single sale opportunity with each customer or user — you could charge $10 per month per user for as long as your customer uses your service. The longer they stay, the greater their lifetime value.

You can choose from:

  • Usage-based pricing - when users pay based on the amount of usage -
  • Pricing per future - when you offer different sets of features -
  • Freemium - a free version with limited features that can be upgraded
  • Pricing per active user entails charging a fee per user for the entire product.
  • Flat rate - when you offer the entire product or a bundle of features for a single price that is paid on a monthly or yearly basis.

Choose the technical stack:

The technology stack is a collection of programming languages, frameworks, and tools that are used in software development. Nowadays, technology provides a variety of services from which to choose. As a result, determining how to build a SaaS product and determine a solution stack is not an easy task. Another issue is dependent on your company's specific needs. As a result, there is no one-size-fits-all answer to the question of which frameworks and tools to use when developing your SaaS product.

Find and create a development team:

It's now time to organize or create a development team. You can either build a team from within your company (assuming you have them) or outsource the development entirely or partially. Outsourcing to a full-fledged team will provide you with numerous benefits and allow you to concentrate on business processes such as marketing.

Here you have three main options:

In-house:

You can hire an in-house employee who will join your team and share your business objectives. It's a fantastic strategy, but it's also the most costly.

Freelancers:

Freelancing is another popular hiring method. Visit platforms like Toptal, Upwork, Freelancer, and others to find IT, freelancers. These websites provide you with access to a large number of candidates from around the world.

Software Development Company:

Finally, you can hire a third-party development company to develop your SaaS application. This way, you can delegate the development process to a group of experts who understand how to build a SaaS product. A development company has enough experience and knowledge to solve complex problems and achieve the best results after managing multiple projects. Although a cloud-based application is not appropriate for every business, the model is gaining popularity due to its advantages. Many large corporations, such as Adobe Photoshop and Microsoft Word, have switched to this distribution model. It's also worth noting that some of the most well-known apps, such as Spotify, Slack, and Grammarly, were created as SaaS applications from the start.

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