Starting a SaaS Startup seems to be a great idea. Software as a service has cemented its position in the business landscape. SaaS solves a problem for businesses, while being a flexible option. If you are looking to ride this wave into the future, here are 10 tips to start a successful SaaS startup in 2021.
1. Always focus on solutions.
This is the #1 rule in SaaS. Whether you are building your product or trying to make a landing page to sell, your focus should be on the solution to a problem. People want to hear this and will make them use your product.
Really this applies widely and is an essential part of human psychology. If you constantly come to your manager with problems, he will resent you. But if you come to him with solutions to said problems, now you’re a star.
Identifying pain points for customers and really hammering home the solution will be the greatest indicator of success for your SaaS startup.
2. Find financing
There are several ways to finance your SaaS startup.
If you want complete control over your company, give Bootstrapping a go. Bootstrapping is when you and your cofounders operate the company with little funds and no outside investment. You would have to finance the company with your own money and with revenue. This is a risky style but one that many startups use.
You could also look for an angel investor. An angel investor is someone with a lot of money or capital who will finance a startup. Find them among family or friends, people in your community and even strangers. In exchange, these investors may get partial ownership of the company.
Once you have some success, you will then go into Series A financing. This type of financing compliments your already successful startup and helps you expand your services, or expand into a new market. Those who invest here are venture capitalists and other professional investors. I want to make a note that when I say successful, that doesn’t mean making a profit. Just accumulating users, and showing your service has legs is all you need.
3. Build a brand
Having a powerful brand will make everything else on this list much easier. After you know your product, your audience and your market, all of those should inform your brand. There are a few things you should think about.
What is your company’s name? A clever name that is unique but at the same time informs users what your service is, maybe difficult to do, but can be invaluable. It is well worth spending enough time to come up with a decisive name.
What’s your company’s story? A strong narrative on why you exist and/or your mission will go a long way with your users. People want to buy into a wonderful story. Give them one.
How does your company speak? From content, to emails, to even the onboarding process, you are constantly talking to your users. You could be informative or maybe a bit sassy. Take the time to find a single voice and have your company talk as one.
4. Have a customer obsession
At all stages of your startup, do extensive customer research. SaaS is unique because it is not just a onetime purchase but a subscription to a software. Your profits will not only depend on how many customers you have but how many you can keep. To do this you need to have customer obsession. There is a reason that Amazon has it listed as their first leadership principle.
In the beginning, do intense market research of similar products and create detailed buyer personas. Who needs the solutions your product offers? You should know your potential customers intimately.
When you bring on a customer, talk to them. How did they hear about you, why did they decide your product? A survey is nice, but an interview is better.
Listen to how your users are talking about your product. Either in reviews or on Facebook, Reddit, forums, etc, what your customers are saying is very important. The negative comments are obviously things that need to be fixed, but the positive comments are also valuable. You can take the words out of your happy customers and use it in your messaging, headlines and ads.
Finally, when people cancel your service. Seize this opportunity to find out why they are leaving. Do they no longer need a solution to their problem? Is a competitor offering a better solution? You can find out so much by just talking to your customers.
5. Think long term
SaaS is a unique type of business because of the way it maintains profit. The longer the customer’s life, the more money you will make. With other services, one sale and you’re done. With SaaS, you need to sell every month and be consistent. All of your decisions need to be ones you can keep in the future. Hopefully, you will have the same customer base a year from now and beyond.
6. Growth before sales
When first starting your SaaS startup you want to grow, first and foremost. If you can quickly expand and take a lion share of the marketplace that is ideal. This might sting for a few of you but you want to focus on growth before profit. Scale quickly, get a large customer base and then you can monetize and sell them.
Some SaaS platforms go with the freemium pricing model. A “try before you buy” may get your users hooked on your service and become loyal customers. You can either have a free version that is very restrictive or offer generous free trials.
Building a generous referral program can make your users act like little sales agents for your service. When the referral program benefits both parties and you get a new user, everybody wins!
Startups are exciting and have the potential to become a major company, but many fail. It is important to do your research, have a firm foundation to build on, and compete into the future. Every day, we are still facing problems that need solutions. If you feel you have a splendid solution, do something about it. A SaaS Startup can not only change your life, but it can change the world.