What Is a SaaS Startup And How To Start Your Own

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Startups are the engines of innovation, and the SaaS industry is no stranger to startups who are looking to create the next big thing. They are the ones that take on new challenges and create new products and services to tackle them. A SaaS startup is generally a small business with high growth potential by its innovative products or services.

If you’re thinking of  starting your own SaaS startup (software as a service), then you have come to the right place! Here in this post, we will tell you all about what a SaaS startup is and how to start your own SaaS startup.

Here are some key points that will help you get started with your own SaaS startup:


What is SaaS Startup


A SaaS startup is a company that provides software as a service, typically through a subscription model. SaaS startups are typically focused on delivering a specific software solution to a target market, and they often use a freemium business model to attract and retain customers. While there are many different types of SaaS startups, they all share the common goal of providing software that is easy to use and accessible to a wide audience.

In recent years, the popularity of SaaS startups has exploded, with hundreds of new companies launching each year. However, the competition is fierce, and only a handful of these startups will be successful in the long run. While there is no surefire recipe for success, SaaS startups that focus on delivering value to their customers and building a loyal user base are more likely to find lasting success.

In order to run a SaaS company, you need to choose a business model that works for your product. Some of the most popular business models for B2B SaaS startups are:

1. Freemium – This business model is usually used by companies that provide their software for free and make money from the premium services or add-ons that the customers need to buy.

2. Subscription – The most popular business model for SaaS companies. In this model, you charge your customers a fixed monthly or yearly fee for using your services. This is a very effective SaaS model if you have a product that does not need much customization and has little to no support.

3. Per User – In this model, you charge your customers a fixed fee for each user added to the software. This model is usually used by companies that have complex software.


Where do I find customers for my SaaS startup?


The most difficult part of starting a SaaS company is finding customers. There are a number of ways to attract customers, but each method has its own set of challenges.

Ads can be effective, but they can also be expensive, and it can be difficult to track their effectiveness. Content marketing is a great way to attract organic traffic, but it takes time to produce quality content.

Social media marketing is a cost-effective way to reach a large audience, but it requires a constantly updated presence.

Emails are a great way to reach potential customers, but only if you have a high-quality email list.

And finally, saas communities can be a great source of leads, but only if you’re able to generate interest in your product. All of these methods have their own pros and cons, so it’s important to choose the right one for your business.

There are many big enterprise companies that also use SaaS products and they usually need to go through various stages before making a purchase decision. If they are your target customers, Then here are some ways that you can reach out to business owners or the decision-makers in the company:

1. Cold Calling – This is an old-school way of finding customers, but it still works. Create a list of companies using or looking to use a SaaS product and start calling them up for meetings.

2. Social Media – You can also create an account on various social media networks like Twitter, Facebook, etc., and post about relevant information that your customers will find helpful. It is best not to spam but to post exciting updates related to your industry. You can also use various software tools like Hootsuite and Bufferapp for scheduling posts.

3. Blogging – A blog is an excellent way of reaching out to potential customers and helping them solve their problems. Write down your earlier clients’ case studies and success stories and publish them on your blog.

4. Guest Blogging – If you have a blog of your own, you can also reach out to other similar companies and seek their help in writing guest posts for your blog. This is an excellent way to generate traffic to your website and get high-quality backlinks.

5. Social Media Advertising – You can also use social media advertising to connect with your customers. Use Facebook and Google Adwords for running ads related to products, services, etc., that you offer.

6. LinkedIn – LinkedIn is an excellent platform if you are looking to reach out to professionals in the field of accountancy, law, finance, and other areas. Apart from that, you can also use LinkedIn ads to reach out to more people.

7. Referral Programs – A good way of finding new customers is by offering referral programs that will award your existing customers for helping you get more business. You can also hire an inbound marketing agency or freelancer who will help you set up the program and get more referrals.


What are the requirements for starting a SaaS startup?


Even if you have an idea for starting a SaaS startup, it is vital to know beforehand that all your efforts will be useless without the proper preparation. You should always keep in mind that running a business is not easy, and you will have to take care of lots of things. You need to be ready for the following things:

1. Business Plan – A business plan is quite a lengthy document, and it will take you days to write. The good thing is that you can use a template from the internet, saving you some time. A business plan is a crucial part of your SaaS business as it helps you define everything from your company’s mission to its financial goals.

2. Proper Startup Funding – Since SaaS startups require a lot of funding, you need to be sure that you have the money and patience. You will also need some good investors from venture capital firms who are ready to take some risks. You will need this money not only for setting up your company but also for its growth and marketing.

3. Website or App Development – Nowadays, a mobile app or a website is necessary for any business. You will need to develop one such that your customers can reach you and vice versa.

4. Office Space – You will need a place to work from and where you can manage your employees and your business too. This is crucial as your office environment directly affects how productive your employees are.

5. Business Right – There are various ways to operate your business from a legal standpoint. For example, you can be a sole proprietor, to begin with, and then later open up a company.

6. Technical Setup and Marketing Setup – You will need to have your company’s technical setup ready to seek the help of experts. You need to advertise yourself on the internet and find new customers for marketing.

7. Product – Once you have everything ready, it is time to come up with something that your customers will find valuable. If you have not already done so, it is time to define your value proposition.

8. Team Building & Execution Strategy – Now that you have all the required elements ready, it’s time to build your team, from SaaS product manager to customer support personnel. You will need employees to help you execute your strategy and grow your company.

As you can see, starting your own SaaS startup is not as easy as it looks. There are various things that you need to do to start your own SaaS startup successfully. You may also want to check our article on SaaS Startup: Ultimate 20-point Checklist Pre-Launch.


SaaS Startup Customer Development & Market Research


Customer development is a methodology that aims to answer three questions: who am I building this product for, what do they need and how can I build a product that meets their needs? It’s an essential step in SaaS startup marketing because it helps you determine whether your target market actually exists and what they want.

You’ll find that customer development is often used interchangeably with market research, but there are some crucial differences between the two. Market research involves researching what’s already out there, whereas customer development focuses on getting to know your potential customers before building a product.

Customer development is really about determining which customers you should be serving. You can do this by looking for people who share similar backgrounds and experiences, such as where they’re located or their age. Your potential customer base may seem large at first glance, but the more you look into it, the more targeted your target market will become.


The Market Map


A market map is a diagram that helps you understand the competitive landscape and where your company fits in. If you already have a product or service, your market map will show potential customers (also known as end-users) who actively seek solutions to their problems. Your goal should be to find people whose needs aren’t currently being met by other companies.


The Market Map Process


Unfortunately, there’s no one-size-fits-all approach to creating a market map because everyone’s situation is different. As such, it can be difficult to give specific advice on the process. That said, there are a few general guidelines that should help you along the way:

1.) Start by identifying the people who will be using your product and why it will be valuable to them.

2.) Search for the currently available solutions, as well as what’s missing.

3.) Find out how much existing products and services cost and whether there is a need for lower-cost or higher-quality alternatives.

4.) Don’t forget to examine the role that your company will take in this equation. You want a product that people can find, understand and trust.

5.) Finally, keep an open mind throughout the process and be aware of any blind spots you have due to being too close to your startup.

Anyone can create a market map, but it’s easiest if you have a team that can help with the process. The more people you have on board, the better equipped your company will be to ensure that you’re actually creating something that people want and need.

You’ll also find it helpful to choose a specific vertical market so you can target your efforts towards one group of users. This will give you a better idea of what potential customers are looking for and how to go about marketing your product. Customer development is significant to ensure that your SaaS startup has a solid foundation on which to grow.


Startup Lessons Learned: Building a Minimum Viable Product (MVP)


The term “minimum viable product” (MVP) has been floating around for a few years now. And, for a good reason: it’s a commonly-used concept in startup land.

A minimum viable product is the simplest version of a product that allows a startup to collect the maximum amount of validated learning about their idea as quickly as possible.

Some of the considerations when building one include:

How quickly can you release it? Will you need to work with certain vendors, etc.? Is this your first time building a product like this? Do you have the technical support needed in place before launching (e.g., developers, sys admin staff)? What about marketing or legal?

The basic idea is to get something out there that will allow you to learn as quickly as possible if the business idea is viable or not and then iterate.


The Challenges of Building a Minimum Viable Product


Unfortunately, we’ve also seen that many early-stage startups don’t recognize how difficult it can be to build an MVP. This is especially true for those with little to no experience in building a product.

In fact, we’ve had more than a few SaaS startup founders admit that they did not fully appreciate how complex it can be to build a working minimum viable product.


Why Is Building an MVP Difficult?


As more and more marketing software tools crop up offering help for companies to build their own minimum viable products, it’s clear that there is a lot of confusion around why building an MVP turns out to be difficult.

Here are some reasons:


A Minimum Viable Product Is Not a Prototype


The term ‘minimum viable product’ has become conflated with the term ‘prototype’ in the startup community, resulting in many thinking that building a minimum viable product and prototyping are one and the same.

In fact, there is a significant difference between the two:

1) A prototype is an early product model that can be used to test if certain assumptions were made about the design work as expected. Prototypes are often made out of the same material as the final product (e.g., paper, cardstock).

2) A minimum viable product is an actual working version of a product that can be used by real users for testing purposes to see if they get value from it and want to use it more. An MVP allows users to give feedback on how to iterate and improve upon the product.


A Minimum Viable Product Can be Difficult to Create


The fact that a minimum viable product is not a prototype often causes confusion for many startups, especially those who have never built a digital product before. In this case, they may not understand why it can be so hard to create working software in the early stages.

To add to that, they often underestimate the effort and time required to build it. The product can require much more than just a unique idea. It demands proper planning and execution.


A Minimum Viable Product Can be Difficult to Market


With so many tools available today for startups to help them create their own minimum viable products, it’s easy to think that the difficulty of creating a minimum viable product is limited to building one. In actuality, advertising it and getting new customers can also pose a challenge for some startups.

In fact, many early-stage SaaS startups have expressed interest in learning how they can market their newly built MVP so that they can learn if it offers enough value for customers to sign up.

This all boils down to the fact that simply building a minimum viable product is not nearly as easy as many people think it is.


Solutions for Building an MVP Without Breaking the Bank


As more and more early-stage companies looking to market their own products, there’s no denying that they could use some help.

While it’s not easy to find the right tools for building an MVP without breaking the bank, few options are available. Here are three ways startups can build their minimum viable product quickly and easily without spending too much money:

1) Use a Freemium Model to Test Demand

One of the simplest ways to build a minimum viable product, test demand and get feedback from users is by using a freemium model. This gives you access to hundreds or even thousands of potential customers without having to spend any money on advertising.

2) Outsource Your MVP to a Low-cost Developer

If you’ve already built your MVP but are still struggling to attract customers, outsourcing the project may help jumpstart the process. Many companies are willing to do this for as low as $100-or less if you sign up with the right freelancing platform.

3) Adopt a Lean Startup Approach

You can use a lean startup approach to keep costs low and hit the market faster. This is essentially a set of methods for building an MVP with as little money as possible. It prioritizes testing and iterating your idea with potential customers to ensure that you’re creating something they actually want (and will eventually pay for) rather than simply throwing a lot of resources into a product that doesn’t have a market.


Key Takeaways


A SaaS startup is an online business that provides software as a service to paying customers. They offer their product or service directly to consumers through the internet, rather than selling them on-site.

Building a minimum viable product can be one of the most challenging steps for a startup. It requires a certain level of technical expertise and knowledge about best utilizing SaaS tools within your budget. The good news is there are many low-cost solutions available. All you have to do is pick the one that’s right for your company, build your MVP and start testing demand.

Once your product offers fair value, users will quickly jump on board. Then you can focus on improving it with their help before marketing it to even more potential customers! If you want to learn more about running a SaaS startup successfully, visit our SaaS marketing blog.


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Ken Moo