SaaS (Software as a Service) startups have been gaining popularity over the past few years, and there is a reason for that. You see, more often than not, companies are scared to experiment, innovate, or tackle consumer and/or societal issues with new products and services.
That’s not the case with startups, though. Startups are known for their innovation, and passion for bringing revolutionary products and services to the market.
But how do you start a SaaS startup, and what are the general rules you need to follow?
Let’s answer these questions, and much more.
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What Are SaaS Startups?
Software as a Service companies offer a distribution model, where software is typically licensed on a subscription basis. This means that, for example, you want to use a CRM (Customer Relationship Management) software, therefore, you must pay to use it, generally on a monthly or yearly basis.
Having said that, the three most popular business models for such companies are:
- Freemium. This model relies on providing free to use software, which is usually combined with a fee for premium services or additional functionalities.
- Subscription. The most popular business model – users pay, in order to use your products/services.
- Per User. Customers are charged a fixed fee based on the number of users they want to add to the software.
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How to Start a SaaS Startup
- Come Up With a Good Idea
- Write a Business Plan
- Find the Necessary Funds
- Establish a Team
- Create an Online Presence
- Choose a Marketing Strategy
- Execute Your Action Plan and Grow
1. Come Up With a Good Idea
Of course, the most important factor you should consider when starting your SaaS, or any other type of startup, is your main business idea.
Regardless of anything else, you won’t go too far with a bad or ill-thought-out idea. Instead, it’s much better to invest time and effort in your idea and do your research.
Is there a need for the product or service? That’s probably the first question you should ask yourself. From thereon, there will be plenty of other questions that will arise – don’t underestimate their potential and value.
After all, it would be a waste of time and money, not to mention the effort both physically and mentally, to dedicate months or even years into developing a product/service, only to then realize there is an issue that you should have thought about way back.
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2. Write a Business Plan
A business plan is crucial to the success of your startup. It is a serious process that may take time. It will, however, be of great significance to your startup, as it will serve as an action plan, and a document that you can always look back on.
A good business plan must contain literally everything – from initial planning phases, to finances, company mission, goals, and roadmap.
3. Find the Necessary Funds
Naturally, you need to think about funding your startup sooner or later. Luckily, different SaaS loans are available, so you can check if you qualify for any of them.
Otherwise, there’s always the option to seek funding from various sources, including venture debt, revenue-based financing, bank loans, personal financing and so on.
4. Establish a Team
At a given point in time, you will need to find and hire employees for your company. It’s important to hire the right people, ones that will share your passion and strive to achieve the same goals.
Being a startup, you can’t allow yourself the luxury of hiring and firing people constantly, so choose carefully. Make sure that your entire team shares the same values, and has a common goal. Remember that quite often it’s up to you to ensure that everyone feels accepted and is on the same page.
Leadership qualities don’t come naturally to everyone, so if you feel it’s too much for you to handle, you can look for a suitable human resources specialist, for example.
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5. Create an Online Presence
You’re nobody, if you don’t have an online presence. Seriously, the year is 2023, and having a website, plus social media is the least you can do. Of course, there’s much more to it than simply having the aforementioned.
For instance, if you want to build good relationships with your potential customers, you need to establish several things, like who your target audience is, what the pain points of your potential clients are, what they like, etc.
Believe us, when we say that good marketing truly is what can make or break your entire business.
6. Choose a Marketing Strategy
Speaking of marketing, there are a few major marketing paths you can choose to follow. For example, you can decide whether to focus on paid advertising or rely entirely on SEO. The best practice is to combine both, though.
In terms of social media marketing, you can, again, decide where to allocate your resources. Usually, you can’t be equally powerful and active on all social media, so it’s best to pick a few. For example, Facebook is great for eCommerce marketing, LinkedIn might be better for B2B, and so forth.
7. Execute Your Action Plan and Grow
Now that you’ve reached this point, you’re ready to proceed. Keep working hard to achieve your dreams, and remember to take a break and look back from time to time. Celebrate each success, outline the next steps, and don’t forget to reward yourself and your team for all their hard work.
Your own fate lies within your hands. Believe in what you’re doing, and follow your dreams one step at a time.
You’re now familiar with the basics of how to start a SaaS startup. A good initial plan and strategic research can do wonders for your company in the long run.
Also, never underestimate the power of a close-knit team, and the huge benefits that marketing can bring to your business. Above all, put all your passion into your startup, otherwise it will be hard to achieve success.