So, you've come up with an incredible SaaS idea that’s keeping you up at night. But before you dive into planning, isn’t it smart to determine if your idea is worth pursuing?
The SaaS (Software as a Service) model continues to gain popularity in the business world. Today, more than 51% of organizations use SaaS applications, many without even fully understanding the concept.
Reports suggest that around 85% of small businesses will be investing in SaaS applications.
However, with every SaaS startup facing an average of nine competitors in the same market segment, it’s essential to evaluate your SaaS product idea and ensure its profitability before jumping on the entrepreneurial rollercoaster.
But how do you determine if your SaaS application will be profitable?
In this guide, we’ll discuss the key factors that contribute to a winning SaaS idea. Let’s get started.
What is SaaS and Why It’s So Popular?
SaaS is a software licensing and distribution model in which software is hosted on a third-party server and made available for users on a subscription basis through the Internet.
In simple words, SaaS is a software program that you can use online; there’s no need to download and install it on your PC. You can access it from anywhere and at any time, as long as you have an Internet connection.
So why is SaaS so popular these days? It’s popular because:
- Saas models are easy to start
- They have low implementation cost
- SaaS business models are easy to operate and maintain
- They’re readily available
- They require very limited staff
Some popular SaaS services include:
How to Know If Your SaaS Application will be Successful?
Well, of course, if you want to succeed in SaaS, you need to come up with unique ideas. But an idea alone won’t guarantee success. Many other factors determine the success of your SaaS application.
Below are some of the most important factors that affect the ultimate success of your SaaS application:
1. Does Your SaaS App Provide an Easy Solution?
First things first, you need to make sure that your SaaS application provides an effective solution to the problems experienced by end-users. It should essentially fill a void in the market.
You have to perform thorough market research to find out the need, and how best you can serve or offer a solution for that need.
Make sure that:
- Your SaaS app will be useful for your prospective clients in the long run
- You know exactly how it’s going to help the clients
- The application is affordable to the target audience
- You have an idea of the market size and current trend
- There is enough scope for growth and business expansion
2. Is Your SaaS Application Idea Innovative?
Well, it’s no brainer. You don’t want to be just another SaaS company in the market.
“You have to be nimble enough, you have to be agile enough, as new information is coming in, to constantly be evolving,” says Aaron Levie, CEO of Box.
If your SaaS application idea is easy to replicate, it can hugely affect your business RoI. If your idea is easily replicable, it won’t take much for others to mimic it and blow your business. You got to build a creative and unique SaaS application to stand out in the market and attract the customers.
Therefore, it’s important to have an innovative idea that’s extremely hard to replicate.
At the same time, it’s also true that no idea is 100% non-replicable. Sooner or later someone is going to find it out and try to cash in on it, which brings us to the next point.
3. Do You Have a Competitive Advantage Over Others?
Well, it takes a lot to find a 100% unique and original idea these days. So if you think your idea is quite easy to replicate, then you must have a competitive advantage over others.
In such cases, your SaaS application should provide something valuable to the users that can separate your services from the rest.
It would be best if you prepare a plan of how to win over the competition when the market is flooded with similar ideas.
“If you’re in the SaaS business, the only way to survive in the long-term is not to just deliver software. It’s to deliver success. You have to actually deliver the benefit that the software is promised to provide,” says Dharmesh Shah, Founder & CTO at Hubspot.
4. Do You Have Enough Knowledge of the Industry?
Ok, so far, you have got an idea for a SaaS app, and you know your audience. The next step is to know more about the industry you’re going to target. It’s always better to perform industry research to get an idea of how your target industry actually works.
In addition, you should perform a detailed SWOT (strengths, weaknesses, opportunities, and threats) analysis of your industry. An in-depth study would help you find out:
- The top players in your industry
- Common challenges experienced by these companies
- Their strengths and weaknesses
- Marketing strategies, business tools these organizations use
- Scope for the improvement
Analyzing the factors mentioned above will help you determine whether your SaaS application will be a success in the future.
Also Read: Navigating the Complexities of SaaS Development: A Complete Guide
How to Validate Your SaaS Idea?
Once you know your SaaS idea is worth pursuing, the next step is to validate your idea.
Before you pour all of your money into SaaS development, you need to find out whether your potential customers will buy and use your product or service. Your product or service should foster brand loyalty for long-term success.
Keep in mind that enterprise clients look for a robust application that can ease their business and provide some value.
So, how to validate your SaaS idea and make sure it provides value to the clients? Here’s how.
1. Talk to Your Prospective Clients
Don’t shy away from meeting your prospective clients and pitching your SaaS idea. Let them know that you have found a solution to the problems they’re currently facing in their day-to-day business.
But, before you meet them, make sure you have done your homework. Ask yourself the following questions when you perform the research.
- What’s the nature of their business?
- How do they currently operate their business?
- What are the most tedious tasks in their business operations?
- Are there any loopholes? If yes, how it affects their business bottom line?
- How your solution fixes their problems and facilitates their business?
Taking to your prospective clients helps you generate feedback and solidify your business idea even further.
2. Send Emails
Well, sending an email might sound like an old-school marketing technique, but it can also help you generate some feedback from end-users. This method is not as effective as meeting the prospects in person, so don’t spend too much time on it.
Create a clear and concise email pitch so that the recipients can easily understand what you want to say.
You can also use email marketing automation tools that allow you to send emails in bulk to reach out to a broader audience.
3. Create a Website
Developing a website is a great idea to generate some buzz around your product in the market. With the help of analytics tools such as Google Analytics, you can track who is visiting your website and how they’re interacting with your site.
On your website, you can provide an option for users to sign up for upcoming product updates. People that are genuinely interested in your products/services will sign-up for the updates and it will help you get more insights.
4. Most Importantly, Develop an MVP (Minimum Viable Product)
Building an MVP is the best method to validate your SaaS idea. MVP is the most basic version of your product or service that has just enough features to serve the early adopters.
Instead of developing a full-fledged product or service, you create a small version of the product with limited essential features and release it to a small market.
MVP is a powerful way to conduct test runs in real-time and generate valuable feedback from end-users.
The success or failure of an MVP can help you determine whether your SaaS idea will be successful or still needs to be improved.
Fastest Growing SaaS Companies to Watch
SaaS companies give high importance to customers’ success. If the SaaS product helps the customer achieve specific business goals successfully, they’re more likely to remain loyal. It eventually helps SaaS companies grow faster and stood out from the crowd.
Some of the fastest-growing SaaS companies include:
1. Atlassian
Atlassian is best known for its enterprise ticketing system, JIRA. The software tracks the internal activities of the organization and makes project management more efficient.
The company has recently acquired Trello and has become the fastest-growing SaaS company with more than 125,000 customers.
“We wanted to build a product that people felt compelled to remark upon. That would then build word of mouth which would help us acquire more customers,” says Jay Simons, President of Atlassian.
Also Read: How Much Does it Cost to Develop A SaaS Application Like Uber?
2. Shopify
Shopify is a Canadian multinational e-commerce company and one of the fastest-growing SaaS platform in the world of eCommerce.
“With our focus on helping entrepreneurs everywhere, including those within the enterprise, launch their businesses and grow them, in 2018 we reached a billion orders cumulatively, and saw the highest-ever mix of merchants join the platform from outside our core geographies,” says Amy Shapero, Shopify’s CFO.
3. Slack
The next on our list is Slack, a team collaboration and chat application that allows organizations to perform internal team discussions and video conferencing.
Slack can be integrated with different other project management tools like JIRA, which helps organizations streamline the business process and increase productivity.
Ready to Turn Your SaaS Ideas into A Digital Reality?
Do you have a SaaS idea that you think can make a huge difference in your industry? Are you ready to develop an SaaS application? Get in touch with us today.
Imaginovation is an award-winning team of web and mobile app developers. We develop enterprise applications for startups to Fortune 500 companies.
We have helped many businesses and individual entrepreneurs build innovative web-based applications and turn their ideas into a digital reality.
Book a free consultation to discuss your SaaS product idea.
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