4 Essential Steps to Build a Profitable SaaS MVP




  • A new business model is sweeping the world.

    In times past, you bought something once and it was yours forever.

    Today, you pay for regular access and get a product that’s always up to date.

    It applies to groceries, clothes, and even software.

    This comes with distinct advantages for both the company and the customer.

    With software, the product is constantly developed and improved. When you look around, there are mature solutions that have all the bells and whistles but they’re always adding more.

    It can be difficult for a new player to figure out what should be in your SaaS MVP. Should you focus on feature X or feature Y? Will people pay for it?

    This article will show you how to build a saas MVP your customers will use, buy, and recommend.

    What is a SaaS product?

    A saas product can be difficult to pin down because there are many views about what it is and isn’t.

    SaaS stands for software as a service and can be defined as a software product that’s hosted by the company and you regularly pay for access to it. For example, Slack is a saas product that’s hosted on the company servers and customers pay a monthly or yearly fee to access it.

    Of course, there are variations to this model. Some companies allow their customers to deploy the software on-premise but still charge a regular fee. With other companies, it’s a hybrid model.

    The nuances of the business model aren’t as important as its impact. The saas industry is expected to reach $ 85.1 billion by the end of 2019. This is only slated to grow as more companies use saas products regularly. An average organization uses 16 saas apps as part of its regular workflow.

    There’s a lot of potential but there’s also a lot of competition. To develop a saas MVP that springboards you to success, there are many factors to consider.

    Maksym Babych, CEO of the SPLOAD, believes that “for a successful launch of an MVP for a saas product, it is important to have strong support for media and specialized platforms and confirm demand for your product. The first aspect will give you a stream of constant leads and the second will give you an understanding of what you can invest in media while remaining profitable.

    Let’s look at how to confirm the demand for your idea before you start to build a saas MVP.

    Get a deep understanding of the customer wants, needs, and pains

    Many founders come up with an idea, do basic market research, throw up a landing page, and start building features that will go into their MVP.

    This is a mistake for several reasons such as:

    • There’s no feature prioritization
    • Product demand is uncertain
    • Don’t have a clear customer persona
    • Not addressing a well-defined pain point

    The list goes on.

    A more efficient route involves talking to the people who you envision as your target customer. This comes before the landing page, before the first lines of code, and before you solidify your idea.

    Why?

    Because what the market wants may be completely different from what you think it needs. If the market doesn’t want it then they won’t buy it.

    An example of this process comes from Buffer – the popular social media scheduling app.

    When the founder got his idea, he didn’t start development right away. Instead, he tested demand by creating a landing page and a simple checkout flow that didn’t work. Instead, he collected email addresses and started conversations with the people who tried to sign up.

    He wanted to understand what aspect of the product appealed to them and the features they needed to make it work for their businesses.

    4 Essential Steps to Build a Profitable SaaS MVP

    After talking to multiple people, he had a clear idea of the features that mattered and the features that didn’t. That’s when he started building a product that has gone on to make tens of millions of dollars a year.

    Another approach is to identify your target customers and reach out to them to hold customer interviews. Aim for at least 20 conversations and ask open-ended questions that give you a deep understanding of the problems and needed solutions. I recommend the book “When Coffee and Kale Compete” by Alan Klement. It has a free PDF version you can download directly from the website.

    Prioritize your product roadmap

    When you’ve finished customer interviews, you’ll have a clearer view of what the solution your market is looking for and how to position your unique value proposition. It’s up to you to decide which features will best meet those needs.

    For example, if your market wants to get more leads and uncover insights about their audience, there are many ways to go about it. You could create a survey tool, quiz software, popups that also ask questions, etc.

    The interviews would’ve given you insights into how important aspects of the solution were. Maybe people want to generate leads the most and segmenting those leads was secondary. Maybe they need to be able to send those leads to their CRM.

    A product roadmap will help you organize the features or aspects of your saas MVP. Some of them will make it into the initial version and others will be pushed back because they’re not as important.

    The major benefit of a product roadmap is the clarity it gives you. You and your team know exactly where you are and what’s left to be done at any given point. If something becomes more important based on user feedback or changing priorities, you can update your product roadmap in a few moments.

    Build the single most important core feature

    Feature creep is real.

    It robs your product of its simplicity.

    It destroys your focus.

    Deadlines get shattered.

    It turns your elegant solution into a slow unwieldy hulk.

    Needless to say, feature creep should be avoided at all costs. The benefits of adding a marginally useful feature are outweighed by the downsides.

    There are several simple ways to avoid feature creep in your MVP and the final product.

    Consider each feature carefully

    Many organizations think up great features and start implementing them. This can work in some cases but most of the time it doesn’t. If there isn’t a demand from existing customers or it’s not part of the original product vision then think long and hard before adding it.

    Consider setting up a feature approval process. Every new feature has to meet specific criteria such as:

    • It’s been requested a certain number of times
    • It’s part of the original product vision (use this if the feature hasn’t been requested too often)
    • The feature will have a tangible impact on revenue or product usage

    The criteria used to evaluate new features will be peculiar to your business but the most important thing is to have an approval process. You can improve it over time.

    Differentiate between the essential, headline, and nice to have features

    Every product has essential features that make it what it is. In a list building software, popups are an essential feature.

    There are also headline features. These are the features that you can put on a landing page and people will look for but they’re not necessarily used often. In our product, one of the headline features is A/B testing but a small fraction of users take advantage of it.

    Nice to have features are what they sound like. They’re interesting and may help with conversions but they’re far from necessary. When you differentiate your features in this way, it makes it easier to understand what you need to focus your energy on.

    Keep an eye on usability

    If people can’t use your software then they won’t. Usability should be at the top of the list for a saas MVP. The more features you add, the more screens, clicks, and buttons you’ll need to add. It reduces usability.

    Always consider how difficult or easy a new feature will be to take advantage of. If it has a marked impact on a customer’s ability to get the most out of your software then it may be better to leave it off.

    Launch it and stop developing

    This is where many founders have issues. They launch a product and don’t get a lot of traction. They think it’s because their product isn’t ready yet. It may not be the best in the world but if you’ve built a great core feature, you can sell it.

    That’s why it’s an MVP.

    There’s a temptation to start writing more code because the next feature will turn everything around.

    It won’t.

    If you have a stable product, have launched it, and it has gotten at least one customer then stop focusing on development.

    Instead, focus on getting more customers through sales or marketing. There are countless ways to go about this and many books, blog posts, and courses have been dedicated to the subject.

    Here are a few methods to build awareness and acquire your first customers:

    • Host a podcast or become a guest on a podcast
    • Start blogging to build traffic
    • Focus on a single social media channel to generate leads
    • Reach out to your target customers
    • Tap your immediate network
    • Develop strategic partnerships
    • Use Quora connect with your audience and establish authority
    • Submit to startup aggregators like BetaList or Product hunt

    These are just a few ideas and there are countless more. You were creative enough to start a business so I’m confident you’ll be creative enough to get a few customers.

    Conclusion

    A saas MVP, when done right, can be the first step to building a successful company. When done incorrectly, it’s the beginning of a long road that may not yield much return.

    There are multiple steps you can take to increase your odds of success.

    • Talk to your potential customers
    • Prioritize the right features with your product roadmap
    • Build the most important feature first
    • Launch and focus on getting new customers before you continue development

    Photo by Hitesh Choudhary from Pexels

    Business & Finance Articles on Business 2 Community

    Author: Daniel Ndukwu

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