SaaS Development Guide for Founders

Do you plan to launch a SaaS (Software-as-a-Service) product? SaaS development can be complex.

DevTeam.Space has considerable experience in developing SaaS platforms, and we can guide. Let’s start.

In this article

• SaaS Development Guide: Actual Steps to Build a SaaS Product
• Final Thoughts
• FAQs on SaaS App Development

SaaS Development Guide: Actual Steps to Build a SaaS Product

You will go through the following steps for SaaS development:

1. Form a team to plan the SaaS product development project

The global SaaS market is large, and Observers state that it will grow to $436.9 billion in 2025. Effective planning will help you to make a mark in this vibrant market.

You need a small team to define and plan your proposed SaaS development project. Onboard the following roles:

• An experienced project manager for strategizing and planning;
• A software architect to design the technical solution;
• A few experienced business analysts (BAs) to analyze and document the project requirements.

2. Decide on the SaaS business model, pricing strategy, and pricing model for the proposed SaaS app

You now need to decide on your SaaS model and pricing model. A thorough understanding of your target audience will help you here. Use a wide range of tools and techniques for this, e.g.:

• Market research;
• User interviews;
• Creating buyer personas;
• Discovery sessions.

Review the following popular SaaS pricing models before you choose one:

• Freemium model;
• Flat-rate pricing;
• “Pay as you go” (PAYG) or usage-based pricing;
• Tiered pricing;
• Per-user pricing;
• Per-active user pricing;
• Per-feature pricing.

Analyze the following well-known SaaS pricing strategies before you choose one:

• Cost-plus pricing: This strategy involves adding a profit margin after covering all costs. While it ensures profit, this strategy doesn’t tie price to value.
• Competitor-based pricing: Start-ups might often use this strategy since they don’t have past sales data to fall back on. This strategy involves modeling the price based on competitors. While this provides a benchmark, you still aren’t aligning price to value.
• Value-based pricing: This strategy involves getting inputs directly from customers. You learn how much the customers are willing to pay for perceived value. This strategy aligns the price to value, which is a key advantage. You might find it hard to implement. Hearing from customers isn’t easy, furthermore, large-scale data analysis takes time.

3. Gather the requirements for your SaaS development project

Gather the functional requirements for the proposed SaaS product. BAs need to play a key role here. They need to use the following techniques and tools:

• User interviews;
• Structured and extensive discovery sessions;
• Analytics systems.

Functional requirements might include the following:

• The details of the screens;
• Forms, responses, etc.;
• Various user interactions;
• Workflows;
• Reports and dashboards.

Would you offer a web app only? Alternatively, are you offering a mobile app too? Will you offer both Android and iOS apps? Make these decisions at this stage.

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In addition to delivering functionality, you need to ensure the right user experience. You need to document the non-functional requirements (NFRs), e.g.:

• Performance;
• Scalability;
• Maintainability;
• Security;
• Usability;
• Accessibility.

The software architect plays a key role in documenting the NFRs.

Your team needs to write the project specifications effectively. You need to ensure that a structured review of the project requirements takes place. Obtain the necessary approvals, and manage the changes effectively.

4. Prioritize the features for the MVP (Minimum Viable Product)

You will likely add new features to your proposed SaaS product incrementally. You might enhance it too. We recommend you use the Agile methodology since it suits such iterative development.

Launch an MVP (Minimum Viable Product). It might contain fewer features than the final product, however, it should be a functional product. An MVP should require less time and effort to develop.

Get feedback about the MVP from end-users. Validate your product ideas and assumptions based on the feedback. You might need to go back to the drawing board, or you can go ahead with app development.

You need to prioritize the features for the MVP. Look for features that have a high impact. As we stated in our MVP guide, use tools like “pain and gain map” and “prioritization matrix” for this.

5. Choose the KPIs to track for SaaS product development

While planning your project, keep in mind that you need to monitor the development process. Choose the right KPIs (Key Process Indicators) for this. Track the metrics that help you to measure the key business objectives.

Choose from the important product development KPIs, e.g.:

• Research and development (R&D) expenditure as a percentage of sales;
• Total R&D/product headcount;
• New patents generated;
• New SaaS products released;
• Average product ROI (Return on Investment);
• Story points retired;
• Team velocity points;
• Sprint burndown;
• Errors per 1,000 lines of code (KSLOC).

Identify the relevant metrics and their measurement processes in the quality management section of your project plan.

6. Select a suitable cloud platform for SaaS application development

You can expedite your SaaS development project by using a cloud computing platform. Reputed managed cloud services providers (MCSPs) take care of the cloud IT infrastructures like servers and networking of cloud-based SaaS solutions.

Some types of cloud platforms manage operating systems, runtime environments, etc. You can focus on software development.  

Choose between the following cloud deployment models:

• Public cloud: You share computing infrastructure and resources with others in public cloud platforms. They use a multi-tenant architecture. This reduces costs. However, regulatory requirements in certain industries might not allow public cloud platforms.  
• Private cloud: You have exclusive control over a private cloud deployment. You get security similar to your on-premises IT infrastructure. Private cloud platforms cost you more.
• Hybrid cloud: This model uses both public and private clouds. You run security-intensive workloads on a private cloud, and other workloads run on a public cloud. This helps you to meet regulatory requirements. You save development costs too.

Determine the type of cloud platform you need. The following are prominent types:

• IaaS (Infrastructure-as-a-Service): The MCSP provides and manages the cloud infrastructure. You do the rest. Amazon EC2 (Elastic Compute Cloud) is an example.
• PaaS (Platform-as-a-Service): The MCSP manages the cloud infrastructure, operating system, middleware, runtime environment, and various cloud services. You focus on developing web applications. AWS Elastic Beanstalk is an example.
• MBaaS (Mobile-Backend-as-a-Service): The cloud provider manages the cloud infrastructure and persistent storage. You can use an MBaaS platform to manage the mobile backend. AWS Amplify is an example.

You can choose from several prominent MCSPs, e.g.:

• AWS (Amazon Web Services);
• Microsoft Azure;
• Google Cloud Platform.

7. Choose the right tech stack for software development

You now need to choose the right technology stack. Consider the following scenarios and options:

Frontend development

For developing a web app, you need to choose a suitable technology stack for the front end. Evaluate the following options:

• JavaScript/HTML/CSS: You can develop the front end using JavaScript, a popular open-source programming language. Use HTML and CSS with it.
• Angular: Angular is a popular open-source web framework for developing the front end. You can easily develop web applications with real-time interactive features using Angular.
• React.JS: React.JS is another popular open-source web framework.

Backend development including API development

Consider the following options for developing the backend of the web application:

• Node.js: This popular open-source runtime environment for JavaScript helps you to create performant and scalable web apps. A vibrant community of software engineers has created many open-source tools and frameworks for it. These improve productivity.
• REST (Representational State Transfer): Build RESTful APIs since REST is the de-facto standard for API development. 
• MySQL or PostgreSQL: You would need a relational database management system (RDBMS). Consider using MySQL or PostgreSQL, which are powerful open-source SQL databases.
• MongoDB or Apache Cassandra: Use MongoDB or Apache Cassandra if you need a NoSQL database. Both of these open-source NoSQL databases offer robust performance and scalability.

Mobile app development

You have the following options for mobile app development:

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Native mobile app development

Native mobile apps offer the best user experience, performance, and security. You develop them using programming languages that are suitable for the respective operating systems like Android and iOS. Native apps can make the best use of platform-specific hardware features. 

E.g., you use Java or Kotlin to develop native Android apps. Both are powerful programming languages with useful features. They offer great performance and security.

To take another example, you would use Swift or Objective-C to develop native iOS apps. Both offer useful features and work well with iOS.

You will develop two different native mobile SaaS apps since Android and iOS are completely different operating systems. This increases your SaaS development cost. Your maintenance costs will be higher too.

Cross-platform mobile app development

You can develop a cross-platform mobile app. It will execute both on Android and iOS devices with the same codebase. Cross-platform mobile apps can’t match the user experience, performance, and security of native mobile apps.

Cross-platform mobile apps keep your development costs lower. You maintain one codebase, therefore, your maintenance costs are low.

Some of the cross-platform mobile frameworks fall significantly short of the native user experience. React Native, a modern JavaScript-based mobile framework bridges some of these gaps. It delivers a near-native user experience.

Other technologies like AI, ML, etc.

You might want to offer customized and specialized features in your SaaS product. You will likely use cutting-edge technologies for this.

The choice of technology depends on your requirements. E.g., you might use AI (Artificial Intelligence) or ML (Machine Learning) for offering intelligent automation. You should use Python, an open-source programming language suitable for AI/ML programming. Python offers useful libraries for AI/ML development.

8. Plan the project including the various software development lifecycle (SDLC) phases

You have gathered the project requirements. You now need to plan the project. This requires planning for other key software development lifecycle (SDLC) phases and tasks, e.g.:

• Technical solutions design;
• Test planning;
• Coding;
• Reviews;
• Testing;
• Deployment;
• Post-deployment support;
• Long-term maintenance.

Your project plan should cover all key aspects, e.g.:

• Work breakdown structure;
• Dependencies and how to manage them;
• Schedule;
• Estimate;
• Risk management plan;
• Quality management plan;
• Human resource management plan.

9. Decide the approach to secure your SaaS platform or product

Your SaaS product might need to comply with various regulations like GDPR, HIPAA, etc. Information security remains a key focus area for these regulatory frameworks. You need to proactively design security solutions.

Do the following:

• Explore multi-factor authentication (MFA), and don’t rely on passwords alone.
• Examine modern technology solutions like digital signature, data encryption, etc.
• Use firewalls and antivirus solutions smartly.
• Ensure that your cloud-based SaaS application strategy conforms to the regulatory requirements.
• Use real-time information security threat intelligence solutions.
• Secure your APIs with authentication, encryption, quotas, throttling, and secure API gateways.
• Proactively mitigate top application security vulnerabilities like injection, broken authentication, etc.

10. Build a SaaS development team

You now need to build your complete software development team. Hire competent people for the following roles:

• UI (User Interface) designers;
• Web developers;
• Mobile developers;
• Developers with other specializations like AI/ML if needed;
• Testers;
• DevOps engineers.

Evaluate the following options to hire developers for SaaS development process:

Hiring SaaS developers from freelance platforms

You can hire programmers from well-known freelance platforms. Some of these platforms have a wide reach, therefore, you will receive many applications for your job posting. You need to interview and select suitable developers.

Freelance platforms might help you to hire programmers for a low hourly rate. However, these platforms don’t offer management support.

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You might find it hard to manage the work of a part-time freelancer. Geographical and time zone differences make it harder. Think of the challenges of managing the work of a freelancer in Ukraine while you are in the US.

You don’t know how freelancers secure the sensitive information of your company. Freelancers might leave a project mid-way, and you need to find a replacement.

Hiring freelancers might work if you have a simple project like building an eCommerce website. Developing a SaaS app like a CRM or project management SaaS solution involves more complexities. Executing such projects with freelancers can be hard.

Hiring programmers from a SaaS development company

We recommend you hire full-time developers from a reputed software development company for developing SaaS applications.

Look for companies with experience in SaaS application development. These SaaS development companies provide management support, and they invest in the professional development of their programmers. 

Software development companies provide replacements if programmers leave the project mid-way. Such companies train their developers to secure the sensitive information of your company. They also implement processes like an NDA (Non-Disclosure Agreement).

Don’t want to hire developers? Engage an end-to-end SaaS development services provider

You might not want to hire developers. Exercise the outsourcing option in that case. Evaluate end-to-end SaaS development service providers, and choose one.

Establish a contract that establishes accountability. Implement a comprehensive governance model with regular communications. Monitor the performance of the service provider, and implement corrective actions when required.      

11. Project execution, tracking, and controlling

You have the plans and resources. Execute, track, and control the project. We recommend you use the Scrum framework since it caters well to Agile development projects.

Build a Scrum team. These are small, cross-functional teams. A Scrum Master leads a Scrum team, and Scrum teams focus on delivering sustained value to clients. Scrum teams work as follows:

• A “Product Owner” provides the requirements.
• The Scrum team holds a “Sprint planning meeting” to plan a “Sprint”, i.e., iteration. The team estimates and schedules requirements into sprints.
• Scrum teams hold “daily stand-up meetings” to discuss the project status and resolve issues.
• A Scrum team holds a “Sprint review meeting”, where it demonstrates the product to business stakeholders. The team obtains the approval for the Sprint in this meeting.
• Scrum teams hold “Sprint retrospective meetings” after the end of sprints. These are lessons-learned exercises. 

12. Using the right product management KPIs for SaaS product management

You have developed your SaaS application, and you have launched it. Monitor how the product works. Use appropriate product management KPIs for this. Consider the following KPIs:

• Customer satisfaction (CSAT);
• Customer retention rate;
• Customer churn rate;
• Conversion rate;
• Customer lifetime value;
• Customer acquisition cost (CAC);
• The number of customer support tickets created;
• The counts of daily active users (DAUs) and monthly active users (MAUs);
• Stickiness;
• Session duration;
• Bounce rate;
• Number of user actions per session;
• Monthly recurring revenue (MRR);
• The average revenue per user (ARPU);
• Net promoter score (NPS);
• Roadmap scoring.

Final Thoughts

This SaaS development guide should help founders of SaaS businesses. If you need further help with your SaaS project, then contact DevTeam.Space. A dedicated DevTeam.Space account management will explain how we can assist.

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FAQs on SaaS App Development

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