How to Build a SaaS Product: A Comprehensive Beginner’s Guide

In today’s digital world, software as a service (SaaS) is a big deal! It’s like a superhero for businesses, changing how they operate and how people use technology. Instead of old-fashioned software, SaaS puts everything on the Internet, making it easy and flexible.

This switch from the old way to the new cloud-based style isn’t just a tech trend; it’s a game-changer for improving things in different areas. Businesses love it because SaaS is affordable and lets them do things more smartly. In simple words, SaaS is a program that runs on the provider’s server, and the user gets remote access to it for a fee.

In this article, we’ll discuss how to make a SaaS product, why it’s unique in today’s tech world, and why businesses value it. Also, we’ll spill the beans on how our company makes SaaS products. We’ll share our experiences and tips to help you if you’re thinking of making your cloud-based solution. Let’s explore the SaaS world together, where smart ideas meet real-life usefulness and discover the key behind making excellent software.

Get ready for a journey into the tech-savvy world of SaaS!

Significance of building a SaaS product

The SaaS model, short for software as a service in cloud computing, involves delivering ready-made software through a subscription-based online connection. This approach allows users to access the required software on any device with an internet connection and a web browser.

Simply put, opting for SaaS products presents a valuable opportunity to cut down on expensive hardware costs since data and applications are stored in remote data centers. Consequently, users of SaaS are spared from dealing with issues related to maintenance, compliance, and security.

Contemporary SaaS technology comes in a diverse range of options. It facilitates the development of platforms capable of linking applications, integrating Internet of Things (IoT) solutions, and analyzing big data. IoT and big data are recognized as prominent trends in technology, making the knowledge of constructing a SaaS product a highly worthwhile investment.

Technically, a client can access a SaaS product in one of three ways:

1. Through a private cloud, when cloud software is built on infrastructure that exists exclusively for use by one organization;
2. Through a public cloud, which is cloud services offered and usually hosted by a third-party provider;
3. Through a hybrid cloud that exists in an organization that uses both public and private cloud systems in its IT infrastructure.

SaaS products range from video streaming services to IT business analytics tools. Popular SaaS products include Google Workspace, Microsoft 365, HubSpot, Trello, Netflix, Zoom, Slack, Adobe Creative Cloud, and more.

Let’s consider unique features of SaaS that help businesses to thrive.

Fundamental features of the SaaS product:

• You do not need a separate workplace because you can use the service remotely – through a browser or mobile application. In addition, other users can use the same account at the same time as you.
• Since the service provider is responsible for creating, operating, and updating the program, you get a ready-to-use solution and do not deal with its technical side.
• SaaS systems are usually cross-platform and cross-browser. You can launch such a cloud service from almost any device or browser, often with a minimum Internet connection speed.
• System updates of the Saas are performed centrally on the provider’s side. You do not need to pay extra for them, as this service is initially included in the payment for using the platform.

SaaS market overview
According to a McKinsey & Company report, the software market will continue to grow and reach the $200 billion mark by 2024. On the other hand, the Statista report demonstrates that the SaaS market is valued at about 197 billion U.S. dollars in 2023, and it’s expected to grow to 232 billion U.S. dollars by 2024.

To build a SaaS product, you first need to know whether this development has any advantages.

Essential benefits of building SaaS products for your business 

Building SaaS products brings many advantages beyond the traditional software development model. These key benefits guide in a new era of efficiency, collaboration, and innovation for businesses of all sizes. Let’s explore why building SaaS applications is a game-changer!

Saves money

Because SaaS allows multiple people to work simultaneously at any time and from any location, you don’t need to install software on local computers. You will also save on wages because you do not need a programmer who will adapt and update the service. We remind you that the provider is responsible for SaaS maintenance, and this service is already included in the monthly package.

Free trials

SaaS allows providers to offer free trials of their software (7, 14, or 30 days). During this period, you can try the program for free to see if you want to register and pay for the subscription. This service allows you to minimize risk and maximize return on investment, and SaaS businesses can attract more potential customers and expand their customer base.

Convenient payment

You only pay for the SaaS product when you use it. Nowadays, companies provide various payment plans depending on the customers’ financial capabilities. You decide to continue paying for the SaaS services or cancel the subscription, pay extra for the advanced functionality of the programs, or use only the basic one.

Comfort in use

Working with SaaS products is easy and convenient because you need to connect to the Internet and log in to access modern, functional programs. It saves you time and effort and does not require special IT knowledge.

Systematic updates

Software updates are the responsibility of the vendor. Some of them release new versions of their products every week or every few months to keep the product useful for current user needs. You can easily update to the latest versions with the click of a button, gaining access to bug fixes and new features as they become available.

Enhanced security

SaaS providers prioritize data security through advanced encryption techniques. This ensures the confidentiality and integrity of user data, safeguarding against potential security threats. Moreover, SaaS platforms undergo regular security audits and adhere to industry compliance standards. This commitment to robust security measures instills confidence in users regarding protecting sensitive information.

Global reach

SaaS eliminates geographic limitations, allowing businesses to operate on a global scale. Users worldwide can collaborate seamlessly, promoting a more interconnected and competitive business landscape. SaaS products often offer localization options, allowing businesses to customize the software to meet diverse international markets’ specific needs and preferences.

User-friendly experience

SaaS providers prioritize user experience by designing intuitive and user-friendly interfaces. This emphasis on usability ensures that individuals can easily guide and employ the software regardless of their technical expertise. Many SaaS providers offer training resources and customer support to assist users in maximizing the benefits of the software. This commitment to user education contributes to a positive and empowering user experience.
Before moving on to the guide on building a SaaS product, let’s look at the different cloud computing models for a better understanding of the SaaS base.

Best cloud computing models: IaaS vs. PaaS vs. SaaS

First, cloud computing has changed how businesses and people handle data, providing services like servers, storage, and software over the Internet. There are three main models: infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS). Let’s check them!

IaaS (infrastructure as a service)

In fact, IaaS is like a virtual toolbox on the Internet. Users can rent virtual machines, storage, and networking as needed. Examples include Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform. IaaS helps save costs and allows businesses to adjust their resources quickly based on their needs, leaving the complicated management to the service provider.

PaaS (platform as a service)

PaaS is a platform for making and managing applications without dealing with the technical stuff underneath. Examples are Heroku, Google App Engine, and Microsoft Azure App Services. PaaS speeds up development and reduces the time it takes to get a product to market. Also, developers can focus on their work while the platform provider handles maintenance.

SaaS (software as a service)

SaaS delivers software over the Internet on a subscription basis. Users can apply the software through a web browser without installing anything locally. Examples are Salesforce, Google Workspace, and Dropbox. SaaS is cost-effective, automatically updates, and works on any device with an internet connection.

As a result, IaaS, PaaS, and SaaS each offer unique benefits, giving organizations the freedom to choose the model that suits their needs in the ever-changing world of cloud computing.

Below is a comparison table of IaaS, PaaS, and SaaS cloud computing models.

Finally, we reached the basis of our article – a detailed guide on how to build a SaaS product. Let’s delve into it in more detail!

12 crucial development steps to building a SaaS product from scratch

Creating a SaaS product requires a detailed approach and strategic planning. From ideation to launch, each step plays a crucial role in the success of your SaaS product. This guide provides a thorough roadmap for building a SaaS product, ensuring that your development journey is smooth and results in a product that meets market needs.

Let’s analyze each development step separately to realize how to build a SaaS product.

Step 1: Searching ideas for SaaS product innovation

The core of any successful SaaS product is a unique and valuable idea. Start by diving deep into your target audience and identifying pain points waiting to be addressed. Also, conduct thorough market research, employ surveys, and analyze competitors to pinpoint opportunities and validate the demand for your solution.

The SaaS industry is rife with stories of innovative ideas turning into successful ventures. For example, consider how Dropbox identified the need for seamless file synchronization and sharing, revolutionizing cloud storage.

Step 2: Unveiling your marketing niche

The next stage of building SaaS products is analyzing the market. To carve out your marketing niche, pose vital questions such as:

1. Who is your target audience?

If you’re developing a project management tool, your target audience might include small to medium-sized businesses looking for efficient collaboration solutions.

2. What specific problems are you solving?

For example, Trello addressed the need for simplified project management by offering a visual and intuitive platform that allows teams to collaborate seamlessly.

3. How does your solution differ from existing ones?

For instance, Slack differentiated itself by providing a communication platform that seamlessly integrates with other tools, streamlining workplace communication.

4. What is your unique value proposition?

In turn, Zoom disrupted the video conferencing space by offering a user-friendly platform with high-quality video, setting itself apart from traditional conferencing solutions.

Answers to these questions will guide your marketing strategy and help you define a unique space for your SaaS product in the competitive landscape.

Understanding your target audience is crucial. Consider HubSpot, a marketing automation platform that caters to businesses of all sizes. By offering a free CRM (customer relationship management) alongside premium marketing tools, HubSpot addressed the needs of startups and small businesses, creating a niche in the market that contributed to its widespread adoption.

Step 3: Creating your strategic business plan

Next, before building a SaaS product, you can make a comprehensive business plan as a roadmap for your SaaS product. So, include details such as:

1. Goals: define clear and achievable goals for your product.
2. Target market: clearly outline your target market and audience.
3. Revenue model: specify how your SaaS product will generate revenue (subscription, freemium, etc.).
4. Growth strategies: identify strategies for scaling and expanding your user base.
5. Financial projections: provide realistic financial projections for your SaaS product.
6. Timeline: establish a timeline for development, marketing, and launch.

A vivid example of a strategic business plan is that of Salesforce. In its early days, Salesforce disrupted the CRM market by introducing a cloud-based solution. Their strategic plan focused on scalability, customization, and addressing the pain points of traditional CRM systems, leading to their eventual dominance in the industry.

Step 4: Determining your SaaS business needs

To build a SaaS product, it is also critical to identify the necessary resources for your SaaS business.

• Personnel:
  Assess the skills and expertise required for your development, marketing, and support teams.
• Technology:
  Choose appropriate technologies that align with your product requirements.
• Infrastructure:
  Ensure scalability to accommodate future growth and changing user demands.

Consider Netflix, which continuously invests in robust infrastructure to handle the demands of its ever-growing user base, ensuring a seamless streaming experience. By anticipating the need for scalable infrastructure, Netflix has maintained a competitive edge in the streaming industry.

Step 5: Selecting the cutting-edge SaaS tech stack

Obviously, when you build a SaaS product, you must choose a tech stack tailored to your SaaS product requirements:

1. Frontend technologies: JavaScript frameworks – React, Angular, or Vue.js.
2. Backend technologies: Ruby on Rails, Node.js, or Django.
3. Database: PostgreSQL, MySQL, or NoSQL.
4. SaaS hosting provider: Amazon (AWS), Google, Microsoft, or Heroku.

Consider the case of Shopify, an ecommerce SaaS platform. Shopify’s tech stack includes Ruby on Rails for the backend, React for the frontend, and MySQL for the database. This carefully selected tech stack has contributed to Shopify’s success in providing a scalable and customizable ecommerce solution.

Step 6: Forming your dream SaaS development team

Turning your vision of a successful SaaS-based product into reality requires assembling a dedicated team comprising the following key roles:

• Business analyst
• Designer
• Software developers
• Quality assurance engineer
• Project manager

Now that you have your plan, it’s time to bring your SaaS development team together. Here are three options of choosing a team to build a SaaS product:

In-house team

Having an in-house team means you have direct control over the development process. Communication is seamless, and collaboration is often more straightforward. This option is ideal for projects requiring constant adjustments and close monitoring.

Freelancers

They offer flexibility and specialized skills. If your project requires a specific expertise for a limited time, hiring freelancers can be a cost-effective solution. It allows you to tap into a global pool of talent without the commitment of a full-time team.

Custom software development company

Engaging a custom software development company brings comprehensive expertise. These companies often have experienced professionals in various domains, ensuring a well-rounded approach to your SaaS product. It’s an excellent choice for those seeking end-to-end solutions.

The success of Atlassian’s suite of SaaS products, including Jira and Confluence, is attributed to its in-house development team. This team has allowed Atlassian direct control over the development process, fostering collaboration and ensuring a cohesive product ecosystem.

Step 7: Bringing your vision to life with MVP development

What else needs to be done before starting to build a SaaS product? Develop a minimum viable product (MVP) to test your concept and gather user feedback. Focus on core features to validate product-market fit before investing in full development. An MVP is a valuable tool for understanding your product’s viability in the market. This approach validated the company concept and created a foundation for continuous improvement and expansion.

Consider the example of Airbnb, which started by renting out air mattresses in a spare room – a minimalist approach that eventually evolved into a global platform for booking unique accommodations. Airbnb’s MVP allowed them to test their concept, receive user feedback, and refine their platform based on real-world usage.

Step 8: Developing the full SaaS product

Once the minimum viable product has been validated and you’ve received positive signals from your users, it’s time to transition from the foundational stage to creating the complete SaaS product. The phase of building a SaaS product involves expanding the existing features and delving into the intricacies of user experience (UX), making refinements based on user feedback and technological advancements.

An exemplary illustration of this developmental evolution is Google Workspace (formerly G Suite). Initially, G Suite began as a collection of standalone applications such as Gmail, Google Docs, and Google Sheets. Over time, Google strategically transformed this assortment into a comprehensive suite of collaborative tools, showcasing the power of continuous development.

Drawing inspiration from Google’s approach, it’s imperative to maintain agility in your development process. Agility means more than speed; it’s about adaptability and responsiveness to changing dynamics.

Step 9: Making an intuitive and appealing UI/UX design

To build a SaaS product better, invest in a user-friendly design to enhance the overall experience. Consider factors like intuitive navigation, responsiveness, and visually appealing interfaces. The importance of innovation extends to productivity tools as well.

Take the case of Asana, a project management SaaS product. Asana’s clean and visually appealing UI enhances collaboration and task management, making it a preferred choice for teams worldwide.

Step 10: Testing your SaaS product for quality assurance

Building a SaaS product requires a commitment to quality assurance, and understanding effective testing strategies is integral to the process. Thoroughly test your product to identify and rectify any bugs or issues. Perform usability testing to ensure a seamless experience for end-users. Testing is an ongoing process. Even after the initial launch, it’s crucial to implement thorough testing procedures.

To maintain a reliable and user-friendly platform, Facebook employs a robust testing process, including user feedback loops and extensive testing environments.

Step 11: Ensuring a smooth SaaS product launch

In fact, building a SaaS product involves not only the development and testing phases but also strategic planning to ensure a successful introduction to the market. Plan a well-coordinated launch strategy that includes marketing, public relations (PR), and customer onboarding. Employ early user feedback to make final improvements before the official launch.

Slack’s launch strategy was rooted in addressing the communication challenges faced by teams. The platform strategically positioned itself as an alternative to traditional email, offering a more dynamic and efficient way for teams to collaborate. Slack’s initial success was fueled by a freemium model, allowing teams to experience the platform’s value before committing to a subscription.

Taking inspiration from Slack’s approach, consider implementing a freemium model or a limited free trial as part of your launch strategy. This approach enables potential users to explore the essential features of your product, fostering engagement and paving the way for a smoother conversion process.

Step 12: Adopting an iterative approach to enhance your SaaS product

If you’re interested in discovering more about building a SaaS product, understanding the importance of post-launch iteration is fundamental to long-term product success. Gather user feedback, monitor performance metrics, and implement updates to stay ahead in the competitive landscape. Google continuously updates its products based on user feedback, ensuring a dynamic and evolving user experience.

Iterative development is a cornerstone of success. Look at the continuous evolution of Microsoft’s Office 365. Regular updates and feature enhancements have kept the suite relevant, providing users with new tools and capabilities while adapting to changing workplace dynamics.

Thus, building SaaS products is an all-around journey that demands careful consideration at every stage. In fact, each step contributes to the overall SaaS product success. By following this comprehensive guide, you provide yourself with the knowledge and strategies needed to guide the complexities of SaaS product development.

Costs to build a SaaS product

Building a SaaS product involves various expenses, and the overall cost can vary significantly based on complexity, features, and development resources. There are key cost factors when you decide to build a SaaS product:

• Development team: hiring skilled developers, designers, and project managers contributes significantly to the overall cost.
• Features and functionality: the complexity and number of features impact costs. Advanced functionalities, integrations, and customization options can increase expenses.
• Infrastructure: costs associated with hosting, servers, and data storage are essential considerations.
• Testing and quality assurance: ensuring a robust and bug-free product requires investment in thorough testing.
• Security: implementing robust security measures to protect user data adds to development costs.
• Marketing and launch: promoting your SaaS product before and after launch is crucial for success.

Below, we have prepared an approximate cost table for building SaaS applications for your potential business. 

Remember that these are rough estimates, and the actual costs can vary based on your specific requirements and the market rates for development services in your region.

Exclusive insights on how to build a SaaS product – Intobi’s expertise

Businesses increasingly use SaaS solutions in the dynamic digital transformation landscape to streamline operations and enhance user experiences. Intobi, an innovative technology company, stands at the forefront of SaaS development, employing its profound expertise to shape cutting-edge solutions for diverse industries.

Below is a video of the Intobi development approach.

Intobi brings extensive experience and a multidisciplinary approach to building SaaS products. The company understands that each business has unique needs and, as such, tailors its solutions to address specific challenges and opportunities. With a keen eye on industry trends and emerging technologies, Intobi consistently pushes the boundaries of what’s possible in the realm of SaaS.

The journey from concept to a fully functional SaaS product involves detailed planning and execution. Intobi’s development process is marked by a strategic sequence of steps that ensures a robust and scalable end product.

There are the primary steps to building a SaaS product by our specialists:

Specification

Intobi begins by delving into the client’s business goals and operational nuances. This comprehensive understanding forms the foundation for the subsequent development phases.

UI/UX design

With insights, Intobi’s expert team architects a scalable and user-friendly design. This phase prioritizes an intuitive user interface (UI) and seamless functionality, laying the groundwork for an exceptional SaaS experience.

Development

Intobi’s technical prowess shines in the coding and integration phase. Using state-of-the-art technologies, the team meticulously creates the software, ensuring compatibility, scalability, and security are ingrained in every line of code.

Quality assurance

Rigorous testing protocols are employed to identify and rectify potential issues. Intobi is committed to delivering products that not only meet but exceed client expectations, and this phase is crucial in achieving that goal.

Deployment and maintenance

The final product is deployed with precision, and ongoing maintenance ensures that the SaaS solution continues to evolve alongside the client’s needs and technological advancements.

Intobi continues to drive the evolution of SaaS solutions, empowering businesses to thrive in the digital era. Let’s check out one of our exciting projects.

Viddyoze: case study

In general, Viddyoze is a super easy-to-use SaaS video editing tool. Anyone can make awesome professional animations in just a few clicks, even if you’re not tech-savvy. 

Moreover, Viddyoze is like magic for small businesses. This tool helps them increase visitors, leads, and sales by effortlessly creating powerful marketing videos.

Our project goals:

• All-in-one solution: Viddyoze wanted to make the life of video editors simpler. They shouldn’t need different tools for video editing. Viddyoze aims to be the only tool you need for creating everything from start to finish.
• Focus on your goals: Viddyoze understood that everyone has different objectives. So, we made a tool that concentrates on what you want to achieve without unnecessary extras. It’s straightforward and gets straight to the point.
• Save time and effort: Viddyoze made video creation a breeze. Creators don’t have to start from scratch every time. We added features that let you automate video creation and plan when you want them to go live. It’s all about making things quick and easy.

Below, you can see what Viddyoze looks like.

Bottom line

In the dynamic landscape of SaaS product development, success hinges on a detailed journey from ideation to launch. Each step – from conceptualizing the idea to embracing iterative enhancements – plays a vital role in developing a product that resonates with users and stands out in a competitive market. Drawing inspiration from industry trailblazers like Google Workspace, Spotify, Zoom, and more, the key lies in continuous adaptation, user-centric design, and strategic launches.

Now, you have discovered how to build a SaaS product. As you launch your SaaS experience, remember that building a successful product is not just a process; it’s a commitment to understanding user needs, staying agile, and fostering innovation. By adopting best industry practices and learning from vivid examples, your SaaS product has the potential to thrive and redefine user experiences.

Ready to transform your idea into a successful SaaS product? Explore the possibilities with Intobi, a leading development company committed to making visions a reality. Let’s build something extraordinary together!

Feel free to contact us!

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