SaaS Startups Guide for a Profitable Product in 2020
There are new SaaS products being developed every day. Some of them succeed in having long-term success, while others fail almost right away. There are many reasons why a SaaS startup might fail, but one of the most common is that they simply don’t have a solid foundation. You need to do certain things before you can launch your product and skipping past them could have disastrous results. Below is a quick guide to help your SaaS startup develop a profitable product for 2020 and beyond.
Pick a Problem to Solve
The first thing you need to do is pick a problem to solve. Every piece of software is designed with a specific type of problem to solve. If you can find one that isn’t being solved yet, or that you think you can solve better, you’re well on your way towards a profitable product.
You can figure out this problem by conducting some research on the industry you are interested in. Read blog articles, test out popular software options, and interview people in that niche. The more information you can gather, the better you’ll be able to tell what problem your software should solve.
Some simple questions you can ask include:
- What part of your business do you wish was easier?
- How would you improve your current software?
- What kind of tool would improve your business’s efficiency?
Once you’ve conducted some research into your chosen industry and interviewed a few people involved with it, you should have a better sense as to what kind of SaaS product you want to develop.
Identify Your Target Audience
After deciding on the type of product you want to build, you should then work on identifying your exact target audience. For example, while your product may be useful for companies in the IT sector, there is a big difference between CEOs and interns working on customer service.
Think about who exactly would benefit from your product. Then come up with a fake profile for what that customer might look like. What is their role in the company? What size company do they work for? Do they make decisions for the company, or do they need approval from someone else? What are the tools they are likely already using?
The point of this exercise is to give you a clearer idea as to who you are creating this product for. You’ll want to keep this image in mind throughout the development and marketing process so that you are always aiming in the right direction. For example, how you design the user interface of your software will greatly depend on how computer-smart your target audience is.
Develop Your Product
Now comes the big step – developing your product. This will vary from business to business, depending on what you are trying to make. However, there are a few common steps that all SaaS businesses will go through to create their product.
The first stage is Requirement Gathering and Analysis. This is where project managers and stakeholders will meet to determine what’s required of your product. Ask questions like how this system will be used, who will use it, what they will input and what the output will be. Once you’re all done, create a document that highlights all the requirements of your software.
Next, you create a design for your software. Using the requirements you identified, you can begin planning out things like hardware requirements and the overall shape of the project. Think of this design as a blueprint for how your software will come together in the end.
Once you have your map, you can then begin dividing it up for your coders. How long this takes will depend on the size of your software and how many coders you have, but it’s typically the longest step no matter what.
Finally, after you have a working program, you’ll need to test it out. Run it through as many tests as you can think of, looking for bugs or any areas you can improve. The last thing you want is to send this software out and find it unusable by your customers.
One option you can consider is hiring an IT project management company to overlook the individual steps and help you keep the project on track. This way you can rest assured that your idea will come to fruition in a timely manner and in the best shape possible.
Determine a Business Model
A big decision you will have to make is the business model of your software. For instance, will you charge a monthly fee to use your software or a one-time charge? Will you entice potential customers with free trials or go straight to the big sharks and sell them your product?
To choose the right SaaS business model, you should conduct some research into what your competitors are doing along with what your audience is looking for. To help you better understand what the different types of SaaS models really are you should know that there are two main categories – low-touch and high-touch SaaS companies.
Low-touch SaaS software is generally easier to create and usually solves a single problem the customer might have. It usually starts as a freemium and its objective is to wow the customer so much, they decide to upgrade it to a premium paid version.
Unlike low-touch, the high-touch SaaS software model offers a plethora of options for the customer and comes as a paid version. The goal is to offer this model to big corporations that are able to afford it, and this is precisely why it’s not marketed in the same way as the other model. You’re no longer offering a solution to a problem but selling a magical bundle that will fix everything and make it a million times better. Corporations will be knocking on your door instead of the other way around.
Market to Your Audience
Now you’re ready to market your product to your audience. There are many ways you can go about promoting this product and it’s not a bad idea to try them all out to see what works. The most essential place to start is a website that describes what your software does and give customers a place to purchase it.
After that, you can begin looking into Search Engine Optimization, social media marketing, influencer marketing, paid advertisements, and content marketing. Use what you learned about your audience in the previous steps to pick the best marketing approaches and how you’ll tailor your message. For example, if you’re targeting CEOs, it may make more sense to advertise on LinkedIn, whereas social media marketers might spend more time on Twitter.
Always Look to Improve
If you follow all of the steps above, you’ll be off to a good start for creating a profitable product in 2020. However, the key to long term success is to always look for ways to improve. Over time you should begin to learn more about your audience, what they are looking for and the best ways to reach them. You should have systems in place so that you can always test out new ideas and implement the best ones.
Your goal isn’t to have a profitable product just in 2020, but for years to come. The steps above will give you a solid foundation, but looking for ways to improve will help provide the long-term success you’re after.