The expected revenue of software as a service (SaaS) companies in the world in 2019 will be $85 billion. This means an average increase in the market value of almost 18% year on year. This prediction developed by Gartner perfectly demonstrates the potential of this industry. Every year, more and more SaaS companies are built. This is a great direction for business development, which opens up great opportunities provided that you plan the entire development process well.
What is SaaS?
SaaS is a very popular model currently based on providing products hostable in the infrastructure of suppliers. Thanks to this solution, users do not have to install the application to use the product. In other words, the application is stored and executed on the system (e.g. Cloud) of the service provider and is made available to users via the Internet.
You probably wonder what the advantages of this solution are. They certainly include the fact that all installation and product management functions are the provider’s responsibility. This is great comfort from the users’ perspective. They receive a ready solution that solves their problem. In the SaaS model, a settlement is usually in the form of a subscription. In addition, it is a quick and comfortable solution for companies that store data in the cloud and want to ensure the security of their information. Users use the product via a web browser; thus, they are not allowed to illegally spread the product or steal information.
Certainly, there are several advantages of SaaS solutions from the user’s perspective. Thanks to them, this industry is developing dynamically. New companies are emerging that see the business opportunity when building a SaaS solution. However, it should be remembered that the market is saturated with various solutions. Therefore, if you develop your own SaaS company or intend to do so, then you must bear in mind that if you do not come up with a product that solves the real problems of your users, then such activity does not make much sense. Moreover, taking into account the highly optimistic variant, you will have to compete with other companies on the market; hence, the chance for business success will decrease.
How to successful develop your SaaS company?
Let us get to the heart of the article. I have noticed that customers often look for a path of success that will allow them to grow their business. Regardless of whether you already run a SaaS company or are just planning to implement it on the market, I believe that, in both cases, there are several rules that must be followed. I listed the three most important steps that should be considered in the process of building and developing such a business.
1. Finding a niche and an effective business model
Obvious thing, but people often skip it. I still hear about such situations that SaaS startups fail because they fail to find a market fit or are adopting the wrong strategy that leads to their bankruptcy. I believe that every business should start with the verification of the target group, built product, testing and constant software development. I want to highlight the role of testing here. It is simple, but the best way to verify that your product meets users’ expectations. Test. If your customers do not like your idea, then you will be able to react quickly and you will not lose your budget.
2. UX and UI design of your SaaS
Your SaaS company should provide user-friendly solutions. For this, you need the support of experienced product designers. They are able to gain knowledge about user preferences, know the current trends, and are able to adapt your product to current market realities. The process starts with creating mockups, designing your product, and then matching the friendly design.
3. Software development phase (coding)
You can certainly use available SaaS solutions. However, if you are thinking about creating a personalized product or expanding your current one, then it is good to opt for custom software development. It is a solution that requires a larger budget, but then you have the chance to build a product that your users really want to use.
The minimum viable product (MVP) approach will help you. It involves the construction of a product that has minimal functionalities that allow you to make it available to users and carry out tests. Thereafter, on the basis of the collected information, you expand it with further functionalities. From my own experience, I can say that this is the most effective way. See for yourself.
The choice of technology is also crucial. Companies commonly choose Python and use it to develop software. I can recommend Ruby on Rails to you, especially when you care about fast scaling, business, cost-effectiveness, and product safety.
Great examples of successful SaaS companies
Do you know companies like kognity, readly.com, and prospect.io? I honestly admit that I have been watching their activities for a long time. I think that these are great examples of well-growing companies based on the SaaS model. I also believe that this might be a good inspiration, which is why I briefly introduce you to the specifics of these companies.
Based: Stockholm (Sweden)
Investors: Norrsken Foundation
About Kognity: Kognity is one the fastest growing EdTech companies in the world, and we aim to radically improve learning for 1.5 billion school students globally. They provide intelligent textbooks to schools in over 100 countries on five continents, allowing students to learn fast and effectively and teachers to help students reach their goals. Additionally, Kognity has been developed through a collaboration with the International School of Geneva (ISG). Note that I wrote in this article about the need to find a niche. Edtech certainly is.
Based: Stockholm (Sweden)
Investors: Zouk Capital, Third Swedish National Pension Fund
Industry: Social Media
Specialities: Digital Media
About Readly: Readly is the new way of reading magazines on tablets and smartphones. Their mission is to be on the cutting edge of the digital magazine revolution. They want to reinvent the magazine ecosystem by connecting content creators and publishers with readers all over the world, making content available, affordable, and sustainable. Readly has offices in Sweden, Germany, the UK, and the US. Their award-winning app gives users the ultimate magazine subscription with unlimited access to more than 3,000 of the best magazines worldwide.
Based: Brussels (Belgium)
Specialities: Sales and Prospecting
About Prospect.io: It is a sales automation platform that can increase sales team productivity. It includes prospecting, emailing, analyzing, and syncing. The tool offers comprehensive support for cold mailings. Many well-known companies have already used Prospect.io, including Asana and AdRoil. Undoubtedly, this startup is rapidly increasing and gaining new markets, which is worth observing.