Kevin NaidooI know from personal experience how difficult it is to start a SaaS (Software as a service) business, especially if you are a solo founder who is self-funded.
In this article, I am going to go through some of my learnings on how to build a SaaS business.
I am no expert by any means in SaaS businesses but I have more than a decade of experience in building web products to draw on, so hopefully this will help you avoid some of the mistakes I have made and help you flourish as a new tech founder.
Build an audience
Before you even start writing a line of code, you should take some time to sit down and draw up an ICP i.e. an "Ideal Customer Profile" and a general business plan.
Most startups fail - this is the harsh reality of being an entrepreneur; which is why it's so important to first have a solid plan in place before actually building a product.
Once you have an ideal customer profile in mind (doesn't have to be perfect), you then can figure out how big your audience is and how to reach them.
To determine how big your audience is, you can:
1) Research your competitors. See how many customers they service and what their estimated revenue is. There are plenty of tools for this. e.g.: Similar web.
2) Look through forums and places such as Quora to see what customers are saying about your competitor's products. This will give you an insight into their pain points and will give you an idea of what key areas to focus on to build a better product.
3) Do keyword research using tools such as wordstream. You can find search volumes and other metrics to help you understand how big your audience is and what keywords to target.
Now that you have done some solid research, it's time to decide if there is sufficient market demand for the product you intend to build.
The best way to approach this is to find out where your customers hang out and build some kind of presence on that platform.
It's important to zone in on one or two platforms that you are comfortable with, be it YouTube, Quora, or Facebook - doesn't matter so much early on.
The goal is to pick a platform and stick with it. You need to be engaged for the long term. Don't just be involved in that community for the sake of advertising - you need to add value. Doing so will help you earn the respect and attention of the community you are targeting.
Once you achieve some sort of following, you can then start conversations with your audience and figure out if they would be interested in your product.
You should build a landing page or some sort of mailing list to capture leads at this stage.
💡If you want to ship your product to market fast and save hours or days of dev work, check out these paid and open-source: starter kits.
Django is great for SaaS
When building a tech product, as a developer myself, it's often very tempting to want to build everything out from scratch or use a shiny new framework.
This is a waste of time. The first iteration of your product should be a quick MVP. You should focus on shipping to the market as soon as possible (don't compromise on quality though).
Django is a solid choice for building SaaS products. Straight out of the box, it comes with a ton of features to help you build an MVP fast.
Furthermore, in addition to using a solid framework like Django, you should consider using a paid or open-source boilerplate, so that you can focus on your core products' business logic; instead of boring "plumbing" work such as building: auth, email workflows, subscriptions workflow and so forth.
SaaS Pegasus is a great clean and easy-to-use SaaS boilerplate that will speed up your dev cycle. It has a ton of features that nearly every SaaS business needs, saving you hours if not weeks of development time. [paid promo]
You can also check out an earlier article I wrote which goes more in-depth on why I think Django is the best choice for web backends here.
Free tier
Always have some kind of free tier. This allows for a low barrier to entry. Unless you have a product that's mind-blowing and a no-brainer, it's hard to convert customers the first time they land on your landing page.
It's far easier to just onboard them on a free tier version and then gradually educate them via email on why they should buy your product.
There are multiple ways to do this. I often find having an open-source version or offering a free trial works best.
If the market is relatively large, you could also consider an always-free version of your product that has some limitations on usage.
Be careful of the "freemium" model though. You want to make sure that your pricing allows for sufficient padding so that you can cover the cost of the free tier clients. Usually, it's just better to offer a trial.
Expansion revenue
You are going to eventually plateau and onboarding new customers will become more and more difficult.
Expansion revenue gives you that extra revenue potential to upsell to existing clients, as it's far easier to convince an existing client to spend more than onboarding a completely new client.
What is expansion revenue?
Expansion revenue is simply an additional service such as an add-on that customers can bolt onto their existing subscription.
This usually entails adding extra user seats, purchasing SMS/Email credits, or in the example of a CRM, customers can pay for an extra "HR" module.
List your product everywhere
Content is king as you will know. Early on with a limited budget - it's difficult to drive traffic to your landing page or website.
Here are some free websites you can list your product on:
- producthunt.com
- alternativeto
- Killer Startups
- Beta List
- Reddit - be careful here, Reddit users hate advertising.
- Quora
- AppSumo
- Pitchwall
- Betabound
- StartupBase
- Indie Hackers
- Designer News
- SaasSHub
- Launching Next
Learn from the best founders
When you learn how to program, especially if you are like me and mostly self-taught, the best way to learn is to seek out experts in whatever language you are learning and follow them, buy their courses, etc...
In a similar vein, there are a ton of successful founders out there. If you want to become better and learn the best practices, then seeking out and learning from these founders is a great way to grow as a founder.
Here's my list of expert founders (in no particular order), I often follow:
- TK Kader. TK has started up many companies and is a coaching specialist for SaaS founders. I find his 3 step breakdown of concepts quite refreshing and easy to follow.
- Neil Patel. Neil is an expert marketer and usually covers some great tips on how to build content around your brand.
- Simon Hoiberg. Simon has a very cool and fun way of explaining advanced business concepts to developers.
- Rob Walling. Rob's YouTube channel does an excellent job of explaining all the core concepts you need to learn as a founder. He's also written several books on the subject and is involved in funding many new startups.
Conclusion
Building a SaaS business is hard and many fail at first - including myself. Failure is okay - it makes you tougher and teaches you important lessons that will help you grow in the long run.
My goal with this article is to share some of the fundamental learnings from my journey to help you as a developer grow into this new space.
Happy building! And all the best for your next best idea.
