10 Steps to Start a Successful SaaS Company in 2024

Starting a Successful SaaS Company

Interested in starting a software as a service (SaaS) business? Begin by outlining your needs and understanding what entrepreneurs in this industry do.

I interviewed SaaS entrepreneurs from around the world, including our own COO Noah Parsons, who played a key role in the making of LivePlan, our own SaaS product. With these insights, we’ll dive into 10 steps to plan, launch, and grow a successful SaaS company.

What is a SaaS company?

A SaaS (software as a service) company allows users to access software through their internet browser or a web-based app. The software is hosted on the company’s own servers, making it a "hosted solution" or "web-based solution." SaaS products are also referred to as "cloud-based" solutions. In contrast, a desktop-based model involves installing software on individual computers and running it on their own servers.

Starting a SaaS company without technical expertise

If you have an idea for a SaaS business but lack technical expertise, it’s still possible to run a successful business. Learn enough about the technical aspects of your business so you can make good hires and understand technical roadblocks when they arise. Protect your intellectual property with a solid contract.

10 steps to start a SaaS company

1. Develop a solution for a problem

Before focusing on pricing, branding, or building a team, identify a clear problem and provide a solution that addresses it.

2. Write up a lean plan

Instead of a lengthy business plan, start with a one-page pitch that covers your strategy, tactics, business model, and schedule. Software like LivePlan can help with this process.

3. Validate your SaaS idea

Determine whether your assumptions about your business are true or false by talking to potential customers and conducting a competitive analysis. Create a minimum viable product to gather feedback.

4. Explore pricing models and initial customer acquisition

Consider subscription-based pricing and test different price points to find the right one for your market.

5. Establish your brand

Differentiate yourself from competitors and create a memorable brand that resonates with your target audience. Focus on design, tone of voice, and a powerful domain name.

6. Make it legal

Choose and register your business structure, such as a C-Corp in Delaware, while also picking a name for your company.

7. Financing and funding

Decide whether to bootstrap your business, seek investors, or ask friends and family for funding. Develop a detailed financial forecast to guide your decisions.

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By following these steps, you’ll be on your way to starting a successful SaaS company.

Even though Konstantinos Bratanis, co-founder and CTO of Goodvidio, and his partner started the business with their own hard-earned money, they eventually raised VC funding. Raising money after starting allowed them to validate their idea and build a team of good employees.

Konstantinos says, “While validating our solution and recruiting early adopters, we started talking to VC firms. At the time, we didn’t have a sales pipeline or revenues yet. What motivated us was learning that at such an early stage VCs are more interested in the people behind the company and their potential to build a viable business. They have modest expectations for sales and revenue numbers, so they want to see a healthy team spirit and potential for growth. They want commitment, drive, vision, and hard work. We secured a first-round of six-figure VC funding thanks to these traits, which helped us start developing our sales and marketing channels.”

When approaching investors, ensure you have an updated business plan, financial documents, and a refined pitch deck ready. These will help you prepare and give investors more holistic documentation to reference.

8. Build your product

In this section, we’ll cover considerations for building your product.

Start as soon as possible

Noah Parsons says, “Start collecting contact information for interested, prospective customers. Develop a landing page, do lightweight advertising, and reach out to potential customers.”

You can even set up the landing page before finishing the product. Refer to Gleam.io for growth hacking strategies.

Start small

Gabriel Kuperman, CEO of CuePin, emphasizes starting small.

“When starting our SaaS company, we focused on creating and developing the most important features for our launch. As we went through development, we gathered ideas for additional features, both internally and from users. With a limited budget, it’s crucial to release your app, get real feedback, and have funds for marketing.”

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Use a development methodology

Noah suggests using the Agile development methodology and estimating the effort needed for an alpha or MVP. Learn more about Agile on Version One’s site.

Keep core development in-house

According to Dharmesh Shah, outsourcing core product development is risky. Joel Gascoigne, CEO of Buffer, shares the same sentiment. Freelancers have different goals and are less invested in the product. They may consider time or budget constraints. Instead of outsourcing, focus on in-house development.

However, if possible, consider remote work and hiring. Noah advises, “Skip the office expense if you can and invest in collaboration tools. For example, Buffer closed their only office. While in-person collaboration has benefits, focus on developing your product first. Offices can be expensive and add little value.” At Palo Alto Software, tools like Slack, Trello, Basecamp, and Jira keep everyone informed.

9. Develop your go-to-market strategy

There are many ways to market a SaaS product, such as paid advertising, affiliate partnerships, outreach to media outlets, and content marketing. Experiment with a combination of methods and adapt as needed.

Do your own PR

Doing your own PR is recommended. Craft press releases for your launches and build relationships with journalists to have coverage opportunities. Utilize Twitter’s advanced search and sites like Contently to find relevant writers.

Participate in online communities

Engage in relevant online communities by joining discussion groups, commenting on blog posts, and starting your own blog. Learn where your prospective customers are and target those locations. Start by building a local community, as did Konstantinos Bratanis of Goodvidio. Participate in conversations, gather feedback, and establish relationships for referrals and word-of-mouth.

Go the content route

Content marketing is vital for SaaS companies and relatively affordable. Share your knowledge through a company blog to attract prospects. Uwe Dreissigacker, CEO of InvoiceBerry, advises operating a blog and getting listed in SaaS directories. Product Hunt is an excellent resource for viral marketing and community feedback.

Do a bit of everything

Experiment with different advertising channels to find what works best for you. Incorporate paid search engine advertising, social media advertising, email marketing, and PR into your online campaigns.

Don’t forget real-life products

Despite being a SaaS company, using real-life products to market your business is valuable. Consider sending stickers or small “thank you” presents to loyal customers and ensure key team members have business cards.

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Start with beta testing

Launch a beta version of your app or software to gain feedback. Gabriel advises releasing a fully-functioning and bug-free beta version to meet your goals and receive user inputs.

10. Establish metrics for success

Tracking metrics is necessary for understanding and improving your business’s performance. Regularly reviewing metrics allows for better decision-making and proactive planning.

Monitoring metrics provides benefits such as improving current and future performance, identifying and resolving problems, receiving real feedback, and making confident decisions. Neglecting metrics and financial tracking can lead to poor business health.

Review metrics in monthly plan meetings to stay on track and adjust goals and strategies as needed. Put these meetings on your calendar, follow an agenda, and be prepared for plan adjustments based on your metrics.

Starting a SaaS business takes time

While the 10 steps provided condense the startup process for a SaaS business, each step requires time, testing, and refinement. Some steps may occur simultaneously or in a different order. Funding may not be pursued until years after launching, and refining the business plan is an ongoing process.

The key takeaway is to get your product out there. With a working plan, tracked metrics for success, and a willingness to iterate, your business will have a better chance to compete and survive.

If you found this guide helpful, remember that starting a SaaS business takes time. Each step requires testing and refinement. Make your business stand out by getting your product out there and tracking key metrics.

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