SAAS is a part of cloud computing business model that deals with the applications and software which are provided on the cloud as a service. With the rise of SaaS businesses, the competitions has already heated up in the market
1. What is a SaaS ?
It is a method of hosting web-based applications or software’s over the Internet and charging customers for using SaaS services online this business model is known as software as a service or SaaS.
SaaS applications are commonly referred to as hosted software, web-based software, and or on-demand software. Whatever the name they go by, these applications simply run on the servers of a SaaS provider while the users can avail its services from their own computers. One of the other major advantages of using SaaS is that all the peripheral maintenance tasks like Security, availability, performances, errors, or accessibility to the application are all managed by the SaaS Businesses providers.
2. Why to start a SaaS business in 2022?
In the next five years, the SaaS business is expected to grow at huge rate. By the end of 2022, the SaaS industry is expected to generate more than $110 billion in revenue globally. Several factors are contributing to this growth, including rising demand for cloud-based services, proliferation of smartphone devices, and the rise of Artificial Intelligence and machine learning.
The market is also rapidly evolving, with new businesses and SaaS products entering the space all the time. The demand is high for cloud-based enterprise software solutions that provide more functionality and value addition than traditional on-premises software. As more businesses migrate to the cloud, the SaaS market is expected to grow exponentially.
3. How to start a SaaS business? From Idea to implementation.
Starting any business requires you to follow certain steps to reach the desired goal. Below listed are some important pointers to coniser when deciding to launch a SaaS business.
3.1 Find a niche market to build your SaaS business
Choosing a niche depends a lot on your background, knowledge, area of expertise and your keen passion for an industry that drives you to identify its various problem and find possible solutions.
Pick an industry and make sure you identify a particular niche within the industry to create space for your business. Starting a business within a niche category is often easy to scale and compete with larger businesses.
Always remember, that before you decide to go head first in any business it is highly recommended that you do a complete assessment of your niche for both profitability and scalability to ensure that the market you choose is big enough for both the existing one and newer businesses to avoid you getting squeezed among intense competitions.
If you have difficulty identifying niche checkout our list of Top 10 SaaS business Idea.
3.2 Focus On identifying Problems and Finding its Solutions.
Now, that you have picked the niche, next step is to Focus on identifying the possible problems or pain points within the niche. Analyse the entire chain of events or process cycle multiple times to better understand the nature of problems. Once you have analysed and understood the root cause of the problem try to identify a possible solution to that problem through various trials and errors.
Focus on building a Micro- SaaS business first by providing solution to the niche industry problems and then slowly and steadily expanding scale operation to solve industry specific problems where the competitions may be fierce from existing industry leaders.
Focus on solving the basic problem first and then try to create a SaaS idea to build a business around it. But if your focus is to first create a SaaS tool or a SaaS business and then try to solve the basic problem in such case you are most likely to fail. Focus on building a comprehensive solution first and then add the SaaS idea as an advantages extension to develop a complete scalable business model.
3.3 Integrate Artificial Intelligence and Use Advance keyword research tools
As SaaS based solutions continue their growth upward, artificial intelligence (AI) and machine learning basics are becoming increasingly important components of the entire SaaS ecosystem. Thus, making the SaaS business more reliable, functional, flexible and accessible to businesses all around the world.
AI and machine Learning are becoming more smarter through self-learning programming, predictive modelling, anticipating behavioural changes, data driven logic-based reasoning and etc., thus it is now imperative for a SaaS business to integrated such advance programs in their ecosystem in order to stay relevant and up to date with the changing dynamics of modern-day business enterprises.
Keyword research tools are great medium to kick start your initial research to brainstorm and analyse initial keywords. Analyse your competitors keywords though keyword research tools like google keyword planners or aherf or uber suggest etc and identify the keywords they have optimised and the amount of traffic they are drawing on their sites through these optimised terms and keywords.
Do some hard research with the help of these keywords tools to identify such terms or keywords which has a high traffic volume and low keyword difficulty. If you can find a sweet spot by identifying a few good keywords or terms you may very well rank your business close to your competitors.
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3.4 Develop a SaaS prototype product to test your idea
The purpose of prototype product is to turn concepts and ideas into something tangible and measurable with data. A prototype is a rough design for the finished product. A prototype is designed with all the basic functionalities only of the real product but without any branding or any other such additional details which are not required during testing phase.
From our own experiences, most of the startup businesses don’t really recognize the advantages of prototyping. Many people believe it to be a futile exercise. But in reality, it is the quickest and the least expensive technique to test your product good and fast. One of the proven benefits of product prototyping is minimising the early risks of failures by identifying errors and mistakes in development phase itself and rectifying them timely saving on both time and money in the end.
3.5 Test your SaaS idea for Market Validation
So, What Exactly Is Market Validation?
Market Validation is the process of determining if your target customers will actually pay money for your product, it also aids in obtaining valued feedbacks from prospective buyers and whether or not the idea is worth pursuing.
It is of great significance to validate your SaaS idea early in the process to avoid wasting valuable time and limited resources developing a product which isn’t a fit for a market. Obtaining market validation can also help in building trust and confidence among early investors who might be interested in funding your startup.
Market validation is one of the key metrics most big seed investors would look when deciding to fund early-stage SaaS businesses. Since developing a SaaS business and its supporting ecosystem requires pumping of huge cash and endless hours, hence initial funding becomes extremely necessary to grow the business.
3.6 Develop and Create an MVP (Minimum Viable Product) fast and ship it to early customers.
An MVP (minimum viable product) is the first basic version of your SaaS product that is launched including only the most basic and essential features. It is launched to test the customers response to the product and the system’s ability to handle real time traffic. It is designed to enable early access to markets, attract early adopters, and achieve market position right from the start.
One of the purposes for launching a SaaS MVP early is to capture early the customers and acquire their valuable feedbacks about their experience with the product. This data is important in understanding and improving the products and launching subsequent version with more refined features and user experiences.
Development MVP is mostly funded by entrepreneurs themselves out of their own pocket this is a good case for attracting potential angel investors. Any investor looking to fund your start-up may pull off abruptly if they find the entrepreneurs themselves lack investments in their own business. An investor may take chance to fund your business if you have a functional MVP developed and bootstrapped yourself as it shows your intent and commitment towards your business.
3.7 Promote Your SAAS Business in full scale
SaaS companies have a potential to sell globally explore opportunity worldwide and, as a result faces global competition. To attract new users to your app, you will need to ignite every neuron in your marketing brain
Facebook advertising, content marketing, a YouTube channel, and email list building are just the beginning. A Reddit thread or an QnA post on Quora about how you bootstrapped SaaS start-up or full fledge blog post discussing your start-up journey is a great way to put the words out about your business this is how much involved you would need to be with marketing.
Consider collaborating with individuals and organisations who are already well-established in your niche. Getting a shoutout from an influencer in your niche can help you get those first users. You can also use affiliate programmes to boost sales.
Harvest the full power of social media and launch an aggressive marketing campaign for your start-up SaaS business. Hiring a good digital marketing agency will accelerate your marketing campaign in top gear as digital marketing agencies are masters in social media marketing and Brand building.
4. How much does it cost to start a Business?
The cost of developing a minimum viable product (MVP) in SaaS could in between $20000 to $25000 for Micro SaaS business. A highly complex SaaS business with advance functionality may cost you as high as $200,000. However, several factors contribute to these figures and the exact cost of startup may vary greatly due to various factors affecting the cost of development.
5. How much revenue does a SaaS business can generates annually?
Honestly there is no straight answer to this question but good SaaS businesses in their initial years on an average generate revenues between $15 million to $50 million annually. However, some of the top SaaS start-ups have revenues in excess of $100 million per annum.