Developing successful SaaS products

In SaaS, the User Is Always Central

These benefits perfectly align with the era we live in, often referred to as ‘The Age of the Consumer.’ In this period, the user takes center stage, and companies must continuously reinvent themselves and develop new services to keep their customers satisfied. Technology is the key enabler of this rapid innovation, and SaaS is quickly becoming the dominant model for delivering these services online.

The widespread adoption of cloud computing and mobile apps has convinced consumers—and increasingly businesses—of the value SaaS products offer. Many CIOs have now embraced SaaS as a core part of their IT infrastructure. Its pricing model is more flexible than that of traditional software, and the market has matured enough to support enterprise-grade use. As a result, vendors are heavily focused on making their SaaS products as robust, secure, and user-friendly as possible.

As demand for SaaS continues to grow, so does the number of companies entering the market—from ambitious start-ups with brilliant new business plans to established organizations aiming to digitize their traditional services. In all cases, however, a software developer with specific SaaS expertise is essential to transform a business concept into a working product. That means partnering with a team that understands SaaS development and advanced technologies.

The Sweet Spot of a Revenue Model

Translating a business plan into a concrete SaaS product is no easy task. It requires careful analysis to identify the sweet spot of the services you intend to offer through your SaaS product. You’ll need to make strategic decisions about which functionality to develop, which components to build in-house, and what to outsource to third parties. These decisions can have a significant impact—small differences in implementation can often lead to substantial cost savings during development. That’s why it’s essential to consult with a developer who has SaaS expertise, someone who can offer an outside perspective and challenge your thinking constructively.

The Preliminary Phase of SaaS Development

This phase also involves determining how the product will ultimately be brought to market. Are there plans for future expansions of the software? Are potential partnerships on the horizon that need to be taken into account? This evaluation leads to a functional model that translates the concept into an initial version of the software. On top of that, a user interface is designed—with a strong focus on user experience, but also with marketing and conversion in mind. Once this crucial preliminary phase is completed, the actual development of the SaaS product can begin.

SaaS Development and Lean Startup

In addition to Agile, it’s becoming increasingly common to develop software using the Lean Startup philosophy, as described in Eric Ries’ well-known book of the same name.

In short, this means that SaaS development is focused on delivering a minimum viable product (MVP) as quickly as possible—a version of the product that meets the basic requirements to deliver value to the user.

By starting small and not building the entire end product at once, it becomes possible to bring the product to market sooner and with lower investment. As a result, users benefit earlier, and it becomes clear at an early stage whether the intended business goals are being achieved.

Best-of-Breed Solutions for Your SaaS Product

When developing SaaS products, it is essential to make the most of standard software components. For virtually every part of a software product, best-of-breed solutions are available—tried and tested, and easily integrated through open APIs. By building a new application using trusted components and adhering to industry best practices, the need for custom development is minimized, and the risk of compatibility issues is significantly reduced.

Focus on Conversion and User Experience

SaaS is the ideal vehicle for launching new business models. In many cases, it’s a variation on an existing revenue model—where the goal is to make a difference through an online platform approach and a strong focus on improving the customer experience.

The Market Is Changing

A striking example is Uber, the successful taxi app that allows users to order a ride with a single tap on their smartphone. Sure, you can still call a traditional taxi dispatch service—but the user experience is quite different. You have to communicate your location verbally and get no live insight into the waiting time. By packaging its service into a user-friendly SaaS product and bypassing traditional taxi dispatch centers, Uber has effectively disrupted the entire taxi market. An important aspect of delivering SaaS is that it’s an ongoing process. Developers must continuously improve and update the software to meet evolving user needs.

Data-Driven Insights

One of the advantages of SaaS is that, as a provider, you have direct insight into how your application is being used. These insights allow you to define KPIs based on the software’s actual performance. For example, you can closely monitor user growth or track the revenue generated by the application. It’s even possible to pinpoint exactly when a user abandons a registration process, or which features they struggle to find. By measuring the success of your SaaS product in this way, you can continuously improve it—and strengthen customer loyalty over time.

The Anatomy of a Great SaaS Product

With so many different types of SaaS products, it’s difficult to define a one-size-fits-all success formula. The technical possibilities are virtually endless. However, there are several key elements to consider when building a business case for a SaaS product.

Blending Physical and Digital
One of the biggest strengths of SaaS products is their ability to combine the physical world with an online service. The previously mentioned taxi service Uber is a prime example. Other examples include online payment systems like SimpledCard, which allow employees to record business transactions directly into company systems.

Replacing Paper
SaaS is often used to replace labor-intensive, paper-driven processes with fully digital workflows. This can include internal business operations, such as inspectors using a mobile app instead of a paper checklist to log findings. Or it can be complete services like Ticketscript, which replaces the sale of physical concert tickets with an entirely digital system.

Automating Processes
While less consumer-facing, SaaS products built for business users are no less relevant to this discussion. These enterprise applications allow users to work from any device, anywhere—freeing them from the constraints of a fixed workplace. On the backend, these SaaS tools are typically designed to automate critical business processes.
Consider a hospital that uses software to automate scheduling by combining rules, employee availability, and competencies into one digital system. Applications like these can save enormous amounts of time by streamlining essential—but often inefficient—business processes.

Tailor-Made Solutions
What all these SaaS examples have in common is that they are purpose-built. These are solutions developed for specific markets and aren’t available off-the-shelf in traditional ERP or CRM platforms. Their value lies in their uniqueness and their nature as services delivered over the web.
Sometimes, a SaaS application is originally developed for internal use, only to prove so successful that others in the industry want to adopt it as well. This can lead a traditional company to become a fast-growing SaaS provider—without that ever being the initial plan.

Finding the Right Development Partner
As with any software project, it’s critical to find a development partner that aligns with your goals. A common mistake in SaaS development is forgetting that you’re building a *product*. There are plenty of software developers out there who can deliver technically sophisticated solutions. But do they know how to build something that real users will actually want to use?

It’s also a misconception that a SaaS product is nothing more than a sleek, responsive website front-end for a business application. While front-end development is important, it’s just one piece of the puzzle. SaaS is about the entire picture: technology, usability, design, marketing, conversion—and above all, scalability for the future.
You don’t want your SaaS product to hit technical limits in terms of users and have to be rebuilt from scratch.

Finally, it’s vital to choose a partner with both expertise in your industry and a deep understanding of your business. A partner who can advise on both product and strategy—helping guide decisions throughout the project. The focus should be on building a truly successful SaaS product, because in the long run, that’s where the biggest return lies for both the client and the development team.

Why Is Everything SaaS?

Your customers prefer SaaS products because they simply work—anytime and anywhere. SaaS requires no installation, users are never faced with hardware failures, and their data is always secure. SaaS generally also appears less expensive than software sold under other billing models, which is important for users who aren’t sure what software they’ll need in the long term, or who only need it for a short period.

Your developers prefer building SaaS products because of the delivery model. Most SaaS products are continuously evolving, and updates can be deployed quickly and easily.
Unlike traditional software, developers have full control over the infrastructure on which their code runs. Your accountant or investors love SaaS because the revenue is typically recurring (MRR) and predictable. This makes cash flow in SaaS businesses easier to forecast—allowing companies to plan ahead and (with the help of investors) trade future cash flows for capital in the present. This ability to fund current growth has made SaaS companies some of the fastest-growing software businesses in history.