The Ultimate Guide for Building MVP SAAS
The Ultimate Guide for Building MVP SAAS
Software as a service (SaaS) has completely changed the way we use digital tools and technological innovation. According to recent data, the SaaS space is worth over $195 billion with a 500% increase in market size in the last few years. But, to develop a SaaS product that stands out among thousands of similar products is impossible without a ‘test drive.’ Hence, to ensure their product work in the market, startups are investing in MVP SaaS.
See, building software, launching it in the market, and promoting it can be a costly affair. It takes different experts and teams to make your SaaS product successful. SaaS MVP is a proven path to test your idea using minimal cost and time.
However, there are some challenges for founders who want to develop an MVP SaaS for their startup. To help you from the pitfalls, we have created this comprehensive guide on the importance, factors, stages, and challenges of custom MVP development.
Although you might be aware of what MVP for SaaS means, let’s clarify our concept again.
What is an MVP for SaaS?
A SaaS MVP is a simplified version of a product that helps onboard early users and get customer feedback. Remember, an MVP is not a prototype. It is a full version of the SaaS application which benefits startup owners to validate their idea in the market.
Why do you need a SaaS MVP for your product?
The simple answer would be to find the right product market fit. You don’t want to invest thousands of dollars in a product that does not need customers.
But, other than this, MVP SaaS has a lot of uses in the development process. A 2021 survey reports that about 90% of startups fail because they don’t know how an MVP works for a SaaS product.
Hence, it’s crucial to understand the importance of MVP development before you invest in one. Here are the reasons why MVP for SaaS is essential:
Helps To Minimize The Resource Utilization
SaaS products are different from creating a website with featured themes and plugins. Software as a service is scalable feature-rich cloud-based software that delivers on demand on the web. Naturally, the infrastructure, coding, and architecture of SaaS products are more complicated with multiple implementations of third-party tools.
Creating an MVP SaaS is a cost-effective way to test your product without draining your resources. An MVP requires way less cost, time, and workforce. If you hire the right company, a custom MVP development would be done within 3 to 4 months, depending on the complexity of the product.
Helps To Beat Competitors
SaaS is one of the most competitive markets. It is one of the fastest-growing sectors in the IT industry with a high amount of cloud security products. So, you want to get your product on the market before anyone else does.
Developing an MVP SaaS would clear that door for you and get the primary idea running on the market. Once you launch an MVP, the rest you can figure out after customer feedback and more research.
Validates Your Idea In The Market
As we mentioned, the SaaS market has grown at a staggering rate of 500% in the last few years, resulting in SaaS products launching almost every month.
In a time where the competition is so tough, only a few would survive the test of time. Thus, you need the validation of your target audiences at an early stage. A market validation would give you the necessary fuel to make your product more fit for the market.
Helps You Get Investors On the Board
With startups, you need the cash flowing for developing any product. MVP SaaS gives you a perfect product idea that you can pitch to investors. Even with demo products, investors often don’t get the full idea behind the invention.
MVP SaaS also helps you to get an effective pricing model. For example, when Basecamp rolled out its first version with a management SaaS MVP product, it started charging users early to watch the demand from paying consumers. This helped them set a yearly revenue goal which they surpassed within weeks after launching their MVP.
How To Build A Successful SaaS MVP?
There are several best practices that you can follow for custom MVP development. However, most of them include a complicated set of lists. Here is a much simpler version of the stages you can follow for building an MVP for your SaaS product:
Research And Competitive Analysis
For any strategy or plan to be successful, you need a proper understanding of the market and its competition. When it comes to MVP development, you would want to know what your users are looking for, what your competition is providing, pricing models, domain research, and so on.
Learning about your target audience and what they want is the first step in product development. But, while many SaaS startups do that, they fail to conduct competitive analysis. Competitor research provides you with what’s in the market and spots the gaps.
Prioritize The Features And Requirements
There isn’t a set of requirements for SaaS MVP. Features depend on your target customer’s pain points that align with your product. But, once you have detailed background research, you can define the features and performance requirements for your SaaS product.
This is the most exhausting part of developing an MVP SaaS for a startup. You need to make a lot of compromises and tradeoffs between desired functions and limited resources. Yet, identifying priority features helps you to narrow down your choices. This can also be a reality check for many entrepreneurs about ideas that might not become a reality with the actual product.
Select The Tools And Technologies
It’s time for you to choose an architectural approach with the help of experts. Generally, senior tech experts would perform technical analysis and come up with the technologies, APIs, third-party integrations, and cloud tools that fit your budget.
At this point, you would also need to select an analytical tool to help you get the necessary metrics and feedback for your SaaS MVP.
Prototyping And Custom MVP Development
Now that you have a proper roadmap of how to approach the product, you can start building the prototype.
A prototype is a draft that only describes the product. It’s a sort of blueprint that helps you create a working model. MVP, on the other hand, is an early-stage version of the SaaS product that’s ready for the market. Hence, you need to build your MVP in a way that’s usable for your target audiences. Customers should be able to give feedback after trying the product.
Collect Feedback And Analyze
An iterative approach is realistic when it comes to MVP development for SaaS, especially for non-technical founders. You can keep updating your product in short cycles after getting the necessary feedback from the market. Using analytics tools, metrics, and reviews, you can understand the performance of the SaaS product.
Once you get proper results, you can make data-driven decisions for the expansion and changes needed for your product.
Examples of Successful SaaS MVPs for Inspiration
In the history of successful SaaS applications, there are quite a few examples of those who started with MVPs.
One of the largest marketplaces for vacation home rentals started with an MVP to test the demand for room rentals among non-commercial customers.
The founders build a simple website and targeted people at a tech conference where they found three interested users who agreed to rent out their residence. They gradually started to market their product to a broader set of users, keeping the features minimal until they found a demand for the service.
Buffer is a classic example of a SaaS MVP where customer feedback played a crucial role in their success.
The founder of Buffer, Joel Gascoigne, started his journey with a two-page website that people can use to schedule social media posts. The goal was to validate if the Buffer can be useful to a large set of people. He applied the feedback from his early set of users to build an MVP and slowly Buffer became the most in-demand tool for marketers globally!
The global king of professional networking platforms also started with an MVP!
In the early version of the platform, it had simple functionalities—the profile page, an invite feature to connect professionals around the world, a very simple search engine, and a summary of the user’s network metrics.
With its USP as a professional networking site, it gained immense popularity and attracted investments. Companies started to use LinkedIn to connect with professionals to hire them. Continuous feedback and data helped developers to add advanced features to make the company we know today. All of these companies have grown to become globally successful with MVP for their SaaS product. However, building MVP SaaS for startups comes with some critical challenges.
Challenges of Creating a Custom MVP SaaS Development
Setting Unrealistic budget
Although MVP is more affordable than the actual SaaS application, it comes with a certain expense as well. Many startups make the mistake of underestimating the project budget.
An MVP SaaS can take up a few thousand dollars, depending on the complexity of the actual product. You need experts, skilled engineers, managers, and tools to create a market-ready product. In-house teams would cost you more. Thus, if you are on a budget, you can hire MVP developers remotely.
Not Prioritizing Features And Security
This is a common problem most founders face with MVP development. It is hard to decide which features should go on the MVP, especially if you don’t have a proper team to help you understand the market. Poor prioritization can cost you money and extra time.
Your MVP SaaS would collect customer information, data, and necessary feedback. With so many cyber-attacks happening regularly, a single data leak can ruin your entire launch. Steps like multi-factor authentication, dynamic password change, encryption, and automated data protection—all of these are necessary to keep your idea safe.
Poor Feedback Collection
The point of developing an MVP for your SaaS application is the feedback from early-stage adopters. It is not unusual to have several iterations of the MVP before going for a full-stage development.
However, many times, companies fail to collect proper feedback for the application. It is either because of inefficient consumer targeting or an improper metric system. The ideal way is to collect responses from multi-channel platforms like social media, email forums, surveys, reviews, explanatory interviews, etc.
Lack Of In-House Experts And In-Efficient Development
You would be surprised to hear how many MVPs fail due to a lack of proper technology and inefficiency in the workforce. Developing software without a methodology can only hamper your productivity and drive-up expenses.
Creating an MVP SaaS for startups requires tech skills, marketers, and designers from a very early stage. SaaS is not a website; it is cloud-based software that has some complex architecture. Without proper team and expertise, your MVP can fail to convey the services to want to provide to your audiences.
Issues With Scalability
This is another problem that most startups face sometimes due to a lack of efficient teams as well. With MVPs, having too many users at once can create issues with its performance, if your infrastructure isn’t scalable. Even for MVP, you need proper SaaS architecture to ensure your application can handle the early demands.
Platforms like Amazon Web Services and Microsoft Azure allow you to create a cost-effective MVP for your SaaS. They come with several helpful tools for monitoring performances and load balancing.
Hiring Expert MVP Developers Can Help
Look, no project is complete without challenges. Without proper tech talents and experienced developers who have decades of knowledge about custom MVP development, your SaaS MVP can fail to provide you with the right feedback.
At Brainium, we create a separate team for each development project to ensure full confidentiality and transform your idea into a million-dollar business. Our huge custom software development team is fully equipped to build high-functioning MVP SaaS for startups.