Get Started In SaaS (Without Throwing Your Money Away)
When you have a great idea and decide to get started in SaaS (Software as a Service), you are building a business. Many eager entrepreneurs don’t think through all the costs associated with starting a new SaaS business. The existence of passive income in SaaS is a myth for 99% of businesses. Making a profit is possible but it requires a tremendous amount of effort and hard work.
Before attaining positive results, you typically stumble several times, but that’s actually a good thing since every failure encountered can bring you one step closer to success. This article describes some of the most common mistakes people make when they get started in a SaaS business as well as tips and key factors for success.
If you’re interested in learning more, check out the recording of our Getting Started in SaaS Webinar
Choose your target consumers carefully and focus on their needs.
The first problem when getting started in SaaS is that entrepreneurs don’t think to focus on one specific consumer profile. They often create products with a greater application because they believe they can attract a broader audience. I mean why limit your products to a few potential buyers when you can market to everyone, right? The truth, however, is that the market is already overwhelmed by generalized products so the focus should be to find your ideal target group of consumers (age group, industry, etc.). Discover your core consumer base and tailor your products to their needs and interests.
Focus on developing a few sets of highly usable and intuitive products.
The second problem is that they try to build an entire marketing platform with many functionalities, but more functionality doesn’t equate to a better product. The better approach is to build a viable tool first and then derive the platform from it. Finding a good product-market fit is the first step to building a successful product. In the context of the workflow, the big data should be transformed into smart data and be given to the right people at the right time.
Your SaaS company should also be a sales and marketing company.
Another mistake is solely focusing on building a good software system while disregarding marketing and sales. Developing marketing and sales strategies is crucial for success. Here is a list of the main areas to consider when you first get started with a SaaS company.
- Customer Personas
- Keyword planning
- Content marketing
- Social media marketing
- Marketing automation
- Lead scoring
- Online community management
- Outbound campaigns
- Much more!
- Prospect lists & prospectors
- Sales process management
- Sales training
- Script/Talk Tracks
- Sales management
- Paid advertising
- Affiliates & affiliate sales
- And more here as well.
We’ve set up multiple SaaS systems and I’ll tell you, there’s a lot to think about. Check out our latest case study for MedRev, a Healthcare Reputation Management System for a real-world example of what goes into getting started.
Connect with the right consumers and understand their intimate needs.
Customer relationships are the key to the success in any business and they are absolutely crucial when you first get started in SaaS. Understanding their needs will help you create quality content, unique sales propositions, increase consumers loyalty, and engage customers as advocates for your brand.
There are a lot of different ways you can go about this. For our Project Scoping System, BrainLeaf, we grow our loyal customers into system advocates through a private Facebook Group and Webinars.
In order to create long-lasting, stable relationships and create the USP (Unique selling proposition) you need to ask yourself the following questions:
- Very specifically, who are my buyers?
- What problem am I solving for each type of buyer?
- Do they realize they have a problem? Are you sure?
- How much is this hurting them?
- What features do they value?
- What is their budget to solve this problem?
- What are the words they use to explain their issues?
- How much money does it take to close a sale to each of these groups and keep the customer happy?
- How much money do you make from each type of customer over the course of their lifetime?
- What are the words that I could say that would make them understand that this solves their problem?
It doesn’t matter how good your SaaS product is if you can’t sell it.
Entrepreneurs often come in and out of the market without even realizing that they have been stuck in the area of scoping their project. They enter the market as freelance web developers, develop a project and sale the contract without realizing they have an awareness problem. The product also must be able to finance its own growth. No business can succeed without an efficient sales model.
Get answers to the right questions. How much are the consumers willing to spend? Who are they? How can you connect with them? What problem are you solving for them?
Little problems become bigger problems at scale.
The failure to adequately evaluate, minimize, and prevent damage from business risks can ruin your entire company. This is one of the biggest project killed I see when talking to people who tried to get started in SaaS and never made it to the point of becoming profitable.
Ignoring the small issues can lead to a loss of market share, damage to your reputation, or potentially sink your whole business. As an entrepreneur, you must create protocols or guides before the actual problem occurs, even though it may look insignificant.
The easiest way to fail.
Forecasting and taking the right measures can help prevent failure. There are many ways to set your SaaS products up for success before release. One of the effective measures is to have a limited number of consumers review the product during the testing phase. Their feedback may lead to new features, updates to the user-interface, and a better overall product. Here are the key factors for success:
Product validation in 7 grueling steps
- Your Saas must solve a specific problem for a specific group.
- Reach out to your personal network and find a group of advisors who work in the industry of your target market. Convince them to be on your board.
- Make a list of competitors, sign up for and use all of their systems.
- Now that you know your competitors, figure out how you’re different.
- Figure out your pricing model.
- Hire a designer to do some basic designs so you can pitch it to your advisor and potential customers.
- Get your advisory group into a room (physical or virtual) and ask them if your SaaS system is going to solve their problems and be worth the cost. If the answer is yes, ask them to purchase during the meeting.
Learning How to Get Started in SaaS Is The First And Most Important Step To Success
Utlimately, the best thing you can do to ensure your SaaS system makes it big is do your homework before you start. Talk to business owners that have been through it, read up on the details most SaaS start-ups overlook, and lay out your plan clearly before you ever spend a dime.
Looking for some help to get started?
We can help! Reach out to us for some expert advice.