5 Things a SaaS Product Team Needs to Succeed
As a SaaS product see continued growth, DevSquad’s Phil Alves gives his five essential elements for success in this marketplace.
As the world trends towards an increasingly data-driven future, the software-as-a-service (SaaS) model has begun to gain more prominence, with SaaS products becoming much more widespread throughout all industries. In fact, the overall SaaS market is expected to reach a whopping $94.9bn by 2022, proving it’s here to stay.
But not every SaaS product is destined to become successful. According to McKinsey, even a software company with 20pc annual growth has a 92pc chance of ceasing to exist within a few years.
Luckily, there are several tell-tale signs that can indicate the likelihood of a given SaaS product succeeding. Even better, this can be predicted before starting work on the product, saving both time and money that can be otherwise spent more efficiently.
1. An eye on the right pain points
The first way to determine a SaaS product’s likelihood of success is by looking at how well they understand their future customers’ pain points. This requires in-depth research on the part of the development team in order to find a problem that needs solving.
Once the exact customer pain point or a problem that needs solving is discovered, a company knows that there is a market out there that will eventually be interested in the product that they create. By understanding this market, they are adeptly able to know what exactly each client needs, ultimately meaning that their SaaS product will find some niche where it can be successful.
2. Narrow scope
Also important in determining a SaaS product’s success is lowering its scope. Once the specific pain points are discovered, the next step is to narrow down the problem so it’s as specific as possible.
No SaaS can solve everything at once. A problem with many failed SaaS products is that they tend to attempt to cast a wide net with their stated goals. In the end, they aren’t able to catch anything.
The more focused a SaaS product is on solving a specific problem, the more successful it will be once released. It’s easy to look at the massive success of a company such as Salesforce and aim to emulate it, but the fact of the matter is that companies need to start small before they go large.
In short, SaaS products shouldn’t try to do too much – at least at first. It’s OK to answer more problems later but, in the beginning, always keep it simple.
3. A savvy founder
Beyond the product design, an experienced and skilful leader at the helm can vastly increase the likelihood of success for a SaaS product. A leader who has a wealth of experience and a clear understanding of the problem will prove to be much more likely to deliver a successful product.
Experience is critical. First-time founders are much less likely to be successful than those who have been in the business for an extended period of time.
4. Knowledge of when to adapt
An experienced founder is uniquely able to foresee the different stages the product will end up going through, from beginning to end. Knowledge is power, and the more knowledge a founder has, the more powerful a SaaS product will be.
Another important indicator of a product’s future success is the team’s willingness to be flexible with the final product. Knowing when to avert from a plan and adapt the product to answer a different problem could be the difference between its success and failure.
Look no further than the uber-popular workplace tool, Slack, for example. Developers originally planned for the product to simply be a communication tool for Glitch, a game they were developing. However, during development, the team saw that they had a truly unique product solely in their communication tool. They pivoted and eventually released what we now know as Slack.
5. The ability to quickly gain capital
Unless something drastic changes in the future, money will remain the major reason for the success of any product. When it comes to developing a SaaS product, this is no different. Those who are adept at raising money will have a much better chance of succeeding.
Typically, SaaS products aren’t profitable at the beginning of their lifetimes as they begin gaining clients and improving their product. In fact, most will almost certainly lose money in the first two years. Therefore, the amount of capital ascertained will be essential in order to stay afloat. Companies who do a good job at this will likely see through the difficult early years and live to see a steady stream of profit.
Source – SiliconRepublic