How to Develop Successful SaaS Application


If you are thinking of launching a SaaS business, you are in a good moment now. Software as a Service market grows rapidly even during the pandemic.

Here are some market forecasts: The Business Research Company expects the SaaS market to reach $436.9 billion in 2025, while Gartner’s forecast says that the revenue of the industry will reach $120 billion in 2021.

Cloud services are on the top of the wave of trends, and there are no signs that this tendency would change in the nearest future. SaaS is one of the most fast-growing cloud industries. According to different sources, its CAGR (Compound Annual Growth Rate) is remarkably high and will remain so during the following 5 years (and hopefully afterward).

Saas industry revenue forecast

We use SaaS apps on daily basis, both in work and private life. Zoom, Slack, Spotify, Dropbox – these are all SaaS. Using software by subscription is as common nowadays as buying software was in the 90s.

Having worked with many SaaS products, we know that developing a successful app is not an easy process and requires a lot of expertise and preparation. However, there are some stages that help you to make a plan and not to get lost on that tricky road to startup success.

Developing a SaaS application. Step-by-Step guide

If you are reading this text, it is likely that you already have a product concept in your mind. If not, it is time to get your notebook with genius startup ideas and find one that seems most feasible.

If you’ve got no such notebook, try to think of some problems that you see around or experience yourself and imagine products that could possibly solve them. The real solution will be way different from the first one, but it is important to have some starting point to move on from there.

Now we are ready for the next steps:

  • Competitors analysis. Many people find this stage to be particularly hard since their product is so unique that the competition seems impossible. In 99% of cases, that is wrong. There are always other ways to solve the same problem, and it’s better not to ignore them. Knowing the competitors will make your design, marketing, and development more goal-oriented and competent.

competitors analysis

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What to look at when conducting competitors’ research? Analyze the features of the app, its UI/UX design, pricing model, marketing methods. Check the reviews that users leave for your competitors: what do they like and dislike? Is there something specific they wish to see in an app?

  • Find your competitive advantage. This means conducting a competitors analysis, finding their strong and weak points, and realize how your product can be different from the rest. Is it easier to use? Cheaper? Serves the needs of a specific audience? Finding a small niche is a good start for a SaaS product.
  • Develop your brand story. Let’s say you’ve found a way to make things better, cheaper, and faster than your competitors do. Sounds like an absolute key to success. However, in the 21st century having just a good product is not always enough. Nobody will know it unless you find a consistent story to tell to the prospective clients.
  • Define the pricing model. SaaS is known for bringing numerous new pricing models to the software industry, and this is not just “freemium”. Flat-rate, usage-based, tiered, blended: there are plenty to choose from. The pricing model can help you differentiate from the competitors without having to lower the price. Make sure not to give away too much for free.
  • Design the prototype. Developing the first version of the product may sound like the hardest part ever, but that is not something you are supposed to do on your own. The most important at this moment is to find a designer for your SaaS app.

Design process for Gamaya by Eleken

  • The development stage goes parallel with the previous one. The work of the design and development team is intertwined in every way. Constant communication between the two is crucial for building a successful SaaS product.
  • Develop an MVP. When your app starts taking real shape, it’s time to launch an MVP, a minimum viable product. Here is where the product meets the real world, and the moment of truth comes:
  • Test the product with real users. The key word here is “real”, though starting with your team members is also a good idea. This is the time to learn if anybody else finds the product as genius as you do.

The testing stage is no less important than the others. The design may be a precious gemstone, but the testing is what makes it a true diamond. The time spent on testing will save lots of money in revenue in the future.

  • … And go on. These steps are not a straight ladder but a spiral. Once you have launched an MVP, you should continue gathering user feedback, monitoring competitors, running tests, fixing bugs, improving the product, reviewing marketing strategies, adjust pricing, and so on.

Ok, so how do you define the success of the application?

No, this question is not a rhetoric one. The SaaS business model implies that success can be measured in different ways than other businesses. The answer is:

Set your goals and targets. Many people think that the success of a product is absolutely visible, but this feeling is not very objective. To know for sure, you need to define the right metrics and set clear goals (use the SMART technique). Revenue and conversions are just the tip of the iceberg, and there are so many other metrics that suit startups at the no-revenue stages.

Final thoughts

Developing a successful SaaS app is not a piece of cake. The process takes lots of time and a dedicated team of professionals. Each of the steps contains loads of work and the number of iteration needed for developing a perfect solution is unknown.

SaaS is a part of that exciting new world where success is measured in many different ways: there is no universal recipe. Each app is unique and requires a personal success measurement.

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