With the rapid digitalization of all aspects of society, Software-as-a-Service (SaaS) has become a very lucrative business model. But the SaaS market is also very competitive. It can be challenging for startups to make a name for themselves and become significant players.
Here are five essential things to consider for growing and scaling your SaaS startup:
A good team
No matter how smart or knowledgeable you are, you will need a strong and talented team for your startup to succeed. A good team starts with developing solid hiring procedures to attract and identify the best candidates for each role.
But with so many open positions out there and few skilled workers to fill them, the competition for the best employees is high. Your startup has to offer industry-standard working conditions, which nowadays include:
- The option to work from home
- Perks like a gym membership or a mental health app subscription
- Company events and team-building activities
- Honest communication across the company, etc.
A narrowed-down target market
Giant corporations like Amazon, Google, Microsoft, and others create universal products for a broad range of customers. But they also have an enormous amount of resources at their disposal. As a startup, you won’t have nearly as many resources to pull that off.
To break into the market, find a problem that a particular segment of customers faces and offer a solution. If there aren’t yet many companies solving this problem, you’ll immediately take up a piece of the market share. As the company grows, you can potentially look into ways to expand your target market, but only after careful assessment and analysis.
Not everyone will need your product, and that’s fine. Focus on finding your audience and develop your software with them in mind. After a while, you may even become an authority figure within your target group, which gives you more leeway to experiment with new products and offerings.
As a tech startup offering software solutions, the security of those solutions is just as important as the problem they’re solving. Cybersecurity has to be a top priority on an organizational level. Vulnerabilities in your products, systems or databases can have severe financial and reputational implications.
To protect your startup from these risks, encrypt all communication and data. Ensure the software you’re providing embodies good cybersecurity hygiene, as that’s a major deciding factor for customers. Encourage your employees to use strong passwords (consider getting a company-wide password manager), and install antivirus software and firewalls on work computers.
A problem-solving product
The harsh truth is that no matter how advanced the technology behind your product is, it won’t sell unless it’s solving a real problem for people. That’s why the R&D process for your software should include plenty of feedback, interviews, research, and analysis of your target market’s pain points.
Once you identify a pain point, focus the development of your product around it. The more people can solve their problems with your software, the faster your startup will grow.
When coming up with a pricing model for your services, it may seem intuitive to add as many options as possible to maximize the scope of potential customers. This approach can be confusing for customers, so you may want to keep it more simple.
Split the pricing into two or three categories. Provide accurate and easy-to-understand descriptions, so customers know exactly what they’ll be getting with each package.
Many SaaS startups are growing their customer base by offering free products. If you have a solid product offering and good funding, this can be a smart way to get the product out to the masses. But most startups can’t go months without revenue, so it’s best to start monetizing sooner. A solid alternative is the “freemium” model.
Growing a startup can be a long and exhausting journey, and very few succeed. The SaaS space is fairly crowded, making it even more difficult for new startups to stand out. The main thing you need to focus on to grow your startup is to develop a product that addresses your target market’s pain points.
To achieve that, you will need a good team. Hiring well and offering solid incentives for employees should be at the top of your priorities.