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7 Tips on how to build a successful saas business

Software-as-a-Service (SaaS) is big business. In 2015, global spending on SaaS was 53 billion dollars. This year, its worldwide revenue is expected to reach no less than 102 billion dollars. The SaaS tier of cloud computing is taking the world by a storm and it’s no wonder many companies want in on the action. But starting and growing a SaaS business – like any other type of business – is hard. So sit tight and read our 7 tips on how to build a successful SaaS business.

7 Tips on how to build a successful SaaS business


1. User experience & design

In an era where customers are tech savvy and glued to their smartphones, a great (mobile) user experience and slick design are key. Both elements go hand in hand and are essential when it comes to converting, engaging and retaining your customers.

There are countless articles on how to create a great user experience and of course a lot will depend on your product and preferences, but a few things to generally keep in mind are:

  • Keep the user interface simple
  • Personalize it
  • Constantly educate your users about your product
  • Make it easy

For more tips on building a smashing user experience go here.

2. Prioritize your product requirements

Basically this means you define the ingredients needed to build your SaaS product. There are several elements to think about here. 



What features does your product need in order to function well and provide value? To answer this question you need to have a thorough understanding of why the product is needed in the first place and what problem it is solving.

If you want to be able to answer these questions, some preliminary field research is necessary. Because no matter how firmly you believe customers may need your product, reality may turn out to be very different. In other words: test your hypothesis first.


User stories       

When it comes to listing your SaaS product requirements, it’s good to also include user stories; short, simple descriptions of a feature told from the perspective of the person who desires the new capability, usually a user or customer of the system.   

Other elements to take into account are: a product design overview, a real life use case story and the different pain points & solutions.


3. Design deliverables

As soon as the product requirements are clearly defined, it’s time for your designer to get to work. This part of building a SaaS product is not to be underestimated, because the design deliverables constitute the bridge between the designer(s) and the development team.

The most important thing to keep in mind here is probably for everyone involved – designer and developers – to keep an open mind and to be realistic. Some of the elements that may look great on paper, will undoubtedly be difficult (or impossible) to translate into a well-working SaaS feature.

For useful insights into getting the most from design deliverables, go here.


4. Find a great (offshore) developer that gets you   

Once you’ve got the design, product requirements and user stories nailed down, it’s time to find a team of developers who can actually build the SaaS product for you.

Needless to say, choosing the right developer is crucial when it comes to building a successful SaaS business. The first thing you probably need to decide is if you want to work with an offshore development team. Often the budget you have at your disposal will make this decision for you though.

Other things to keep in mind are: the level of experience required to build your SaaS business and whether or not your offshore development team will be a fully dedicated one.

Talking to a development company’s testimonials is always wise, as is asking about the software development method they use; do they work according to the Agile philosophy for example? If the answer is yes, this will make the development process for your SaaS product a lot easier. Here’s a sampling of the advantages:

  • Faster time to market;
  • Higher quality & lower costs;
  • A constant feedback cycle;
  • You’ll be able to change your product requirements at any time, no matter how far down the development pipeline your product already is.

But besides all of the above, you want a development team that believes in your SaaS product, comes up with valuable suggestions you didn’t think of yourself and that simply gets you.

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5. Don’t overwhelm your customers with features   

Less is more. Don’t forget that, while you know your SaaS product inside and out, your customers only just got to know it. The last thing you want to do now is scare them away because they’ve been bombarded with lots of different features.

To prevent your customers from canceling their subscription, make sure you let them get used to a feature first. Once they’ve had enough time to get acquainted, you can introduce them to another one of your dazzling new features. Baby steps! 


6. Measure churn & active product use

If there’s one metric every (budding) SaaS company should concentrate on, it’s their churn and active product usage rate, according to Paras Chopra, CEO of Visual Website Optimizer. Because it’s one thing to get new customers signing up, but making sure they actually use your product (a lot) is another thing entirely.   

A subscription-based business model – such as SaaS businesses employ – has considerable advantages. It’s straightforward for both the customers as well as the company, it offers companies a certain payment safety and customer retention levels generally are higher.

If however your customers end up not using your product, they’ll eventually cancel their subscriptions; which is why it’s important to stay on top of your churn and active product usage rate.

7. Don’t forget about marketing & sales

Congratulations, you’ve built a well-working, easy-to-use SaaS product! Unfortunately, no one knows about it… yet. Now there’s heaps of information out there about SaaS marketing and sales, so we’ll keep it short and simple here.   

Research what marketing methods you can use and think about a strategy you believe will work best for your SaaS business. Generally speaking, you’ll want your marketing marketing master plan to include a regular newsletter, various social media channels and – especially in the beginning – some paid ads.


How we help companies build a successful SaaS business

At Gapstars, we are firm believers in the Agile philosophy when it comes to building dedicated scrum teams and SaaS software. Within the Agile framework, teams have the freedom to organize themselves and manage their own work. 

On a daily basis, we enable our teams to deliver SaaS products with the best time-to-market and the highest possible quality. As a result, our clients benefit from a competitive business advantage, which in turn enhances their customer’s satisfaction.