Top tips for getting your SaaS business started

We all use SaaS apps at work, from chasing emails and ‘sharing’ online documents, to virtual meetings. SaaS has been on the rise since the early 2000s.

But over the past two years, this growth has rapidly progressed when remote working more than doubled during 2020/2021. According to the Office for National Statistics (ONS) 8.4 million people were working from home at some point during the week.

SaaS businesses also present an excellent opportunity for entrepreneurs. SaaS allows you to start small; you don’t need a vast amount of capital to build and launch your version 1 or do you have to survive a 6-month sales cycle to get your first drop of revenue. You can see the results quickly to validate what works early and often before building out the product.  

If you’re an entrepreneur looking to get started, here are my tips:

1. You can learn as you go!

Yes, trying to fix a problem you’ve personally had lets you know there’s a problem that needs solving. But the beauty of the SaaS model is that entrepreneurs can find great success in sectors they have limited or no experience in because the learning cycle times are shorter. You can build, learn and iterate your way towards the insights you’ll need to make a successful product, even if you know nothing about the sector.

With a product that solves an issue,  the software users will need to get closer to the solution and the humility to learn from others. You have all that’s necessary to build a lucrative product. Of course, an initial lack of understanding may lead you to make wrong product decisions along the way, contributing to slower growth. But ultimately, these mistakes don’t matter if you can realize the issue and learn from the process.

Again, this relies on speaking to your users to work out what’s going wrong and what you need to refine.

2. Qualitative data is key

People often laud data as the foundation of every good decision, but stats and figures shouldn’t be your only guide. It’s more productive in the early stages to look at qualitative rather than quantitative data when building your SaaS product.

In the early days, usage volume is typically so low that it’s impossible to derive significant, actionable results from user data. For example, it may take months to discern the material impact of two different layouts of the same feature. The solution? Leaning on qualitative data – which means speaking directly to your users. Their honest feedback will show if you’re on the right track, point to where you should pivot and help you build a user-friendly, intuitive product that will see subscriptions rise.

3. Learn from competitors 

Many entrepreneurs are scared of entering a space where there’s competition. But it’s almost impossible to find a niche with zero competitors and, if you do, there might be a very good reason.

The existence of competition indicates that a market exists. If there’s someone else solving problems for customers, there’s a good chance you can build a business in this space too.

The comparison should end here, however. If you’re trying to achieve market dominance, simply following in your competition’s footsteps won’t get you anywhere. You’ll always be behind. More importantly, you won’t be learning what works and what doesn't, so when it does eventually come time for you to move forward with your roadmap, you’ll have to start the learning process from scratch.

4. Pay-per-click (PPC) advertising is perfect for a SaaS startup

PPC advertising and SaaS is an incredible combination. It’s a great way for startups to drive early customers.

PPC is very cheap at a low volume, which means you can get a fair amount of app installs for as low as $0.30 each. The next stage focuses on breaking even, not making a profit: as soon as you can raise average revenue per install (ARPI) higher than cost per acquisition (CPA), you can kickstart a growth cycle.

Increased spending will result in more installs. These installs give you more opportunities to test, learn and make product improvements. These improvements will lead to higher ARPI, and this higher ARPI allows you to pay a higher CPA. It’s a cycle that can run and run, with each turn fueling further product improvements, revenue and learnings.

Of course, the ultimate goal is to make a profit on every customer. Still, in the early days, SaaS businesses should focus on driving as many customers as possible to iterate quickly and find product-market fit.