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How To Build A Successful SaaS Startup: Step-by-Step Guide


How to build a successful SaaS startup? How do you develop a successful SaaS startup? Making a business dream a reality and establishing a startup app are difficult tasks. To begin, you must arm yourself with a creative idea and the appropriate business approach.

If everything is not so straightforward with the concept – you need to survey the market, assess competitors, and hunt for funds- then everything is simpler with business models. In this article, we’ll look at one of the most common business models: SaaS.

How do you build a successful SaaS startup? Continue reading!

Let’s begin by explaining what a SaaS firm is in detail.

Table of Contents

What Is A SaaS Product?‍


Software as a Service (SaaS) describes how customers access the software via a web browser or other web-based application. Software as a service (SaaS) products are frequently referred to as “hosted solutions” or “web-based solutions.” This is because the software developer hosts their product on their own servers. 

The SaaS sector has expanded significantly over the past ten years. Even though 2020 was challenging for everyone, SaaS firms continued to grow (Gartner report from July forecasted a 2 billion dollar growth).

SaaS products are frequently referred to as “cloud-based” solutions. On the other hand, a desktop-based strategy would include a person or business installing software on their desktops and running it on their own servers.

You will need to be able to briefly explain this broad advantage for your company and elevate it using the value of your solution.

Advantages Of SaaS Products To Customers And Product Owners


SaaS For customers: Advantages

  • Convenience: Customers don’t have to worry about software installation issues because you only need a functional gadget and a steady internet connection.
  • Thanks to flexible pricing, customers can select a price plan based on their demands. It might be regular or yearly, premium or basic, etc.
  • The data and app files are kept in remote data centers to reduce hardware costs.
  • SaaS programs receive updates and bug fixes automatically over the internet.

Advantages Of SaaS For Product Owners:

  • Less software piracy: Cloud-based Apps are not exposed to piracy.
  • The entire world is a potential client for SaaS programs since they are accessible from anywhere on Earth with an Internet connection.

Therefore, if you have an idea for a cloud-based service, now is a beautiful moment to begin a successful SaaS startup! There are a few things you should be aware of, even if you don’t necessarily need to have substantial technical expertise before realizing your SaaS concept.

How To Build A Successful SaaS Startup


1. Create A Remedy

Make sure you have an apparent problem to solve and a solution that solves it before moving on to pricing, branding, or team building. After all, a firm cannot exist if an issue is not being solved.

There are several approaches to discovering an issue that is worthwhile tackling. Here are some opinions from others:

Fix a problem better than anyone else

“If you can fix a problem for someone and do it better, quicker, and cheaper than your competitor, you’re off to a good start.” — Gabriel Kuperman, founder and CEO of CuePin.

Solve a problem you can relate to

“The number one rule for any SaaS business should be to solve your real problems and not someone else’s problems. Only by solving a problem, you have struggled with yourself will you fully appreciate how to solve the problem in the best possible way.” — Uwe Dreissigacker, founder and CEO of InvoiceBerry.

2. Draft A Business Plan

There is no way around the requirement for a business strategy. But begin with a one-page pitch rather than settling down to construct a 40-page plan.


The lean planning approach, which is considerably more straightforward and more flexible than conventional planning techniques, begins with this quick way to put your concept on paper. Additionally, SaaS companies that often experiment with new ideas would benefit more.

In general, your pitch will include information about your strategy (what you’ll achieve), methods (how you’ll execute it), business model (how you’ll generate money), and timeframe (who is doing what and when).

3. Perform Market Survey

Before building a successful SaaS startup, conduct market research, before investing, you must research and determine whether your project concept is worthwhile. 

What should market research contain? We advise concentrating on key facets, including a market overview, target market research, and competition analysis. Discover the innovative SaaS trends, focus on vertical markets, and develop mobile-first SaaS applications. 

How can you learn about the newest trends? Attend the appropriate conferences and trade exhibits, and stay up with happenings by tuning into webinars. You will learn the information that will keep you competitive.

Furthermore, describe the cloud computing model that your competitors are using. Do you mean SaaS, PaaS, or IaaS? Examine the new items that your competitors’ have introduced.

What features do they possess? When were they last updated? Study their financial data after that. Examine their pricing strategies, financial results, and yearly reports.

4. Determine Your Target Audience

After conducting market research, you could have had a great concept and received excellent feedback from your survey participants.

However, to maintain a successful startup, you’ll need to continue bringing on paying clients as you go. In fact, a Gartner analysis reveals that 20% of customers account for 80% of SaaS companies’ income.

There’s a significant likelihood that someone has previously thought of a solution to your problem if it’s too broad. If you choose something really specialized and esoteric, there’s a chance that you won’t have a successful SaaS startup in the long term.

Knowing who will use your product, how they will use it, and why is essential to determining your target audience.

5. Know Your Pricing Model

Any business, whether a SaaS firm with a pricing model or an online marketplace with a successful monetization plan, must have the correct revenue model to be successful. In the end, it will specify how your business will turn a profit.

Pick your monetization approach properly if you want to develop a successful SaaS startup that will pay you consistently. To reduce financial risks, you may even experiment with combining several revenue strategies such as:

  • Usage-based pricing: This pricing technique, often known as the Pay-As-You-Go model, directly links the price of a SaaS product to its usage.
  • So, if you use the service more frequently, your bill will increase. But if you use it less frequently, your expenses will reduce.
  • Flat-rate pricing: The most straightforward approach to selling a SaaS solution is most likely through flat-rate pricing. It entails offering just one product with a single set of features and one price.
  • Tiered pricing: Companies provide various sets of “packages” with feature combinations at different price points.  

6. What’s Your Marketing Strategy?

You must understand how your SaaS apps vary from competing goods and services if you want to market them successfully. You may construct a marketing strategy using free trials.

Free trials and freemium models are very popular in the SaaS industry. It collectively accounted for around 10% of new business. It was cited by 27% of companies as the source of almost a quarter of their new customers, according to Totango’s 2016 SaaS Metrics Report.

7. Find Funding

Before or after you begin the development of your SaaS product, you might wish to investigate funding options. Making a financial plan requires determining if you’ll be self-sufficient or need outside funds.

So, where can you go if you need financial assistance?

Well, it’s relatively simple to obtain venture money because the public demand for SaaS firms appears to be stable. Therefore, you need intelligent investors as an early-stage business who will offer you money and advise you on how to spend it. 

8. Launch Your Startup

Now is the time to spread the news. Your ideal clients must be aware of the existence of your product and understand how to utilize it to address their issues.

Where do your clients gather? What internet channels can you use to reach them? On social media? Slack groups? Forums?


Contact them by generating free instructional material or purchasing advertisements on the appropriate platform. Offer a perk to entice them to sign up, such as a momentary discount.

Don’t spend money on unspecific advertisements on Facebook and YouTube, though.

If you don’t have a very defined target demographic, these platforms can become bottomless money pits. Ensure the stability of your technological infrastructure as well.

When onboarding new users, you don’t want unanticipated bugs to appear.

9. Calculate Your Success

Success is arbitrary. However, the successful SaaS startup environment often entails money and growth. There are several indicators you may monitor to help you make decisions. Some of the more significant ones are listed below:

Also read: Retention marketing.

  • Conversion rate: How many individuals use your service after hearing about it?
  • Customer acquisition cost: How much should you invest in each user in order to convert them into paying clients?
  • Customer lifetime value: Consider someone who continues to use your service as long as they have the issue you address. What kind of income would they bring in for your SaaS startup?
  • Churn rate: How many customers leave your service in a specific time frame? 
  • What monthly recurring income can you anticipate at the start of each month?
  • Monthly average payment per user: How much additional revenue does each other user bring to your service on average?

FAQs On How To Build A Successful Saas Startup

Is It Possible To Launch A Successful SaaS Startup Without The Technical Know-How?

You can still manage a successful SaaS startup even if you don’t know any programming languages but have an excellent idea for a SaaS solution. How?

Seek advice from software development firms. They are specialists knowledgeable about best development practices and can help you choose a tech stack that will work for your company concept.

What Are The Key SaaS Metrics To Track Performance

You must evaluate the performance of your product after its launch. Various SaaS metrics that can help are:
1. Customer lifetime value
2. Customer acquisition cost
3. Monthly recurring revenue
4. Churn rate
5. Average monthly revenue

Final Thoughts

One thing you should remember from this guide is that marketing your product is crucial for a successful SaaS startup. Your company will survive and have a shot against the competition if you have a solid marketing plan.

However, your marketing plan is incomplete without Metricks, and our advanced solution can help skyrocket your sales. Get in touch with Metricks today! 



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