Interested in knowing how to build a SaaS product?
This is a huge market and yields massive returns if you get it right.
According to a study done by The Insight Partners, “The SaaS business model market accounted for $31.57 billion back in 2015 and is expected to grow at a CAGR of 18.6% during the forecast period to reach $172.20 billion in the year 2025”.
How to build a SaaS product?
Let’s go through the process of building a SaaS product.
What SaaS product do you want to build? Is there a market?
So, you have an idea of the kind of SaaS product that you want to build, awesome! But how do you know it‘ll work? How do you know it will resonate with its target audience subscribers, and more importantly, who will be willing to pay for it, and via what kind of payment model?
Testing the market
You can perform a litmus test of the market or industry in which you want to deploy your cloud computing SaaS software. You will do this by creating a website landing page that has some simple HTML pages that illustrate how your new SaaS model or app will solve a consumer or business need.
To really sell the idea, you can embed a short video that details how your product works to help further sell the idea/product.
On this web page, you can place a “call to action”, something which encourages visitors to the website to supply their email addresses.
In return, you might want to offer a free eBook or promise potential customers discounted subscription fees, etc., when the time comes for you to unleash your SaaS product on the world.
You should promote your site on multiple social media channels and popular websites such as LinkedIn and Reddit, thereby giving your landing page site as much exposure as possible.
Installing Google Analytics will help you build a picture of the locations and demographic makeup of visitors, and more importantly, if you get enough, you‘ll have concrete evidence that confirms there is some mileage in your idea.
Industry insider Kevin Felly said that you only need 1,000 true fans to have a business, so get promoting that landing site now!
Determine your pricing model
The first thing to do if you want to build your SaaS platform is to determine your pricing model. This can be a tricky affair, as you need to strike a balance between the value you provide to customers and your profit margin.
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If you don‘t charge enough, your initial investment will take longer to recoup and you run the risk of having to seek further investment. If you overcharge customers, adoption of your SaaS product may stagnate and turn off your target audience.
You have a few options in terms of your pricing model and there are arguments for and against each model. Some of these include, but are not limited to:
- Simple, flat-rate pricing
- Usage-based pricing
- Tiered Pricing
- Per Feature pricing
The list is by no means exhaustive and you need to pick the model most suited to your business idea.
For example, are you happy to give users access to every feature for a fixed fee? If so, then Flat Rate pricing might be the simplest option. It‘s an easier sell, it also makes sales and marketing easier as you only have one offer to push.
A downside to this model, however, is that it can be difficult to upsell to existing customers as you‘ve locked them down to a fixed price.
Alternatively, Tiered Pricing gets around this issue by attributing a cost per feature in your SaaS solution, a downside to this, however, is that it can be tricky to determine which features that users will want. And don’t forget to offer a free trial period to allow users to try out features.
The answers to pricing model questions can be gathered whilst you are testing the market and trying to figure out if your idea has some mileage in it.
When you‘ve settled on an idea, and figured out how you‘re going to monetize it, the next thing to consider is getting a handle on the requirements of your SaaS solution.
Document your requirements
If you‘ve confirmed there is a market for your SaaS product, building the MVP is the next step. Rather than building your entire application with every feature included, a good approach is to build an MVP (Minimal Viable Product).
This contains the core essentials of your application that are needed for it to function at the most basic level. Having a minimum viable product in place lets you test out your product with early adopters to get feedback for future iterations. This is a great approach to get started.
To do this, you need to document the requirements for your minimal viable product. There are various approaches you can deploy to achieve this. The most common ways are to write the functional specification or develop a series of user stories.
Regardless of which approach you take, what is common across each of the different approaches is that they detail the system requirements for each piece of functionality in the system you want to build.
Lack of quality requirements documentation can severely hamper the delivery of your MVP, so take the time to make sure that the requirements for your MVP are as clear and specific as possible.
If you‘re a non-technical founder, it might be worthwhile employing a business analyst or consultant to help you translate your idea into technical requirements that a developer can just run with!
Now let’s get deeper into how to build a SaaS application.
Pick a tech stack to build a SaaS Product
Now that you‘ve got the requirements documented for your MVP, it‘s time to consider which technology to use to build your SaaS product. Web technologies can be somewhat of a minefield. Especially with client-side/front-end development. There seems to be a new client-side library every month!
When picking a technology stack for your custom SaaS development process, you‘ll want to consider several factors that may include, but are not limited to the following:
- How big is the developer resource pool?
- How mature is the technology or programming language, is it current, or dying?
- Is the technology suitable for my MVP (e.g. can it support big data, web services)?
- Does the technology support the features you need?
- Will you be able to integrate the technology with several platforms?
- Does the technology lend itself to being integrated with other products?
- What is the roadmap for the programming languages?
Taking the time to think about these points will ensure that you don‘t pick a tech stack that‘s out of date or that no one wants to work with, not to mention, it will ensure that your tech stack is suitable for the task at hand.
Find Developers to build a SaaS product
You‘ve now validated your idea, documented the requirements, and settled on a tech stack and programming language. The next thing to consider in order to build a SaaS platform is to find a developer or developers who can help you realize your SaaS dream!
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SaaS products are generally distributed over the cloud. They often manipulate data, consume other web services and render information in the user‘s web browser. Because of these characteristics, building your MVP or SaaS product often involves multiple skillsets.
When looking for developers to build your MVP or SaaS product, you‘ll want to look for developers with skills that include, but are not limited to:
- writing database queries and interaction with datasets;
- server-side programming and business rules development;
- frontend development;
You‘ll also want to select developers who have a track record of building and implementing web applications – at scale. You can look for developers domestically, nearshore, or even offshore.
It’s beyond the scope of this blog post to go into the numerous service providers on the internet, so you will have to look around to find a few online services that let you search the talent pool for developers with the unique skills you need.
Marketing your SaaS product
Just before building your product, it‘s worth advertising your brand to generate some excitement and to let the world know about it. Building this excitement around your product, prior to building it could be the key to your success.
For example, Dropbox built a web browser landing page (like we just mentioned earlier) and promoted it with the help of social media which helped them harvest the email addresses of over 70,000 people!
Other channels that can help you promote your SaaS product include, but are not limited to:
The key is to use these social channels to get the word out and help you generate some buzz around your product and, at the same time, build a mailing list that you can contact when you’ve built the first cut of your SaaS solution.
We can now move on to the fun part of how to create a SaaS platform.
In parallel to building your email list, you can get down to building your SaaS product. Expect to be in regular contact with your developer or team, clearing up ambiguities in any of your requirements, testing the product, and ensuring that your core features have been built to spec.
If your team is distributed and located around various locations of the world, there are plenty of online collaboration tools to help you communicate.
A popular choice that‘s free for up to 5 users is Visual Studio Team Services (VSTS). With VSTS, it can help you plan development work better, code faster and improve developer productivity.
It integrates with the most popular source control providers such as Git and TFS whilst also allowing you to ship products faster by implementing the practice of continuous integration.
Using Kanban and Scrum boards, you can easily visualize where development tasks are in the plan if they‘re yet to be completed, and how much capacity your team has.
Other important components that you‘ll need to consider in order to build a SaaS platform are:
- Types of the databases or database services you need (MySQL, PostgreSQL, etc);
- Queuing systems to run asynchronous services;
- Cloud infrastructure to host your SaaS solution (it‘ll need to scale on-demand);
- Content delivery networks;
- How you‘ll handle defects and software updates when you go live.
As developers complete features, you‘ll likely go through several iterations of your product. When you get to a point when all the key features of your SaaS solution are built, and you need to start getting user experience feedback data, then it‘s time to deploy it!
Deploying your SaaS product
After you’ve finished building a SaaS product that fits your requirements and meets the needs of your audience, it’s time to think about its deployment.
The main SaaS hosting provider such as Microsoft Azure and Amazon AWS makes it relatively easy to use web servers that can host your SaaS solution. They can scale on-demand and are equipped to deal with surges in users of your SaaS application.
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With Azure, for example, you can quickly configure development, test, and production servers that integrate with your development pipeline and roll out automatic releases.
Azure even has functionality that allows you to auto-migrate between virtual machine instances, something which can be helpful in disaster recovery or upgrade scenarios.
If you‘re nervous and don‘t want to release your product to everyone on the mailing list you‘ve built from your marketing and landing page efforts, you can contact a subset of users and invite them to a private beta test.
This will give you time to iron out any kinks prior to the main launch. You may even get some valuable feedback during this stage on additional features etc., which you can ask your developer to implement.
Finally, when you‘re confident your product is ready for the world, and you‘ve let everyone know on your mailing list, it‘s important to track user engagement and do an audit of KPIs and other core metrics. This will be the topic of the next blog post, so stay tuned!
Final Thoughts On How To Build A Software As A Service Platform
In this article, we‘ve looked at the key steps on how to build a SaaS platform. We covered how to identify an opportunity, why it‘s important to get your requirements right, and looked at how you can source developers to help build your SaaS application.
We then looked at what to consider when establishing your pricing model and some steps to take when deploying your application.
Finally, we looked at what you can do to market your SaaS application and ended with the importance of monitoring user engagement and how to use that feedback to help you drive the design of your SaaS application.
Read our article to know more details on design principles for a SaaS product.
If you are lacking the right expertise or human resources, then why not take a second to fill out a DevTeam.Space product specification form to see what we can do for you.
We are a specialized software development company that has a community of top front-end and back-end developers and designers. Our DevOps follow our unique development process that includes cutting-edge CRM methodologies and have helped companies of all sizes undertake their mobile and web development.
We have developers and dev teams that companies can access at a moment’s notice according to their outsourcing needs in order to offer them the scalability they need to complete their projects.
Our developers have expertise in creating applications on Amazon Web Services, Azure, etc., using all the major tech stacks including PHP, Python, CSS, Angular, for cloud applications, API, and traditional software development, etc.
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Frequently Asked Questions
Building a SaaS platform requires a unique set of skills. Most specifically, cloud development requires developers to understand how cloud services work. If you don’t have experienced cloud developers then you should onboard some from companies such as DevTeam.Space.
Building a SaaS platform is a complex process that requires experienced developers. If you do not have the required skills in your existing development team, you should onboard ones that do from a custom software development company like DevTeam.Space.
The world is quickly moving to the cloud. Within the next decade, nearly all the world’s software services will be cloud-based. Developing a SaaS technology platform will allow companies to get ahead in the race to dominate this new marketplace.