The SaaS model has become the heart of modern business operations. Currently, 99% of organizations rely on at least one SaaS product. Such broad adoption has increased the level of competition in the SaaS market, driving continuous innovation and evolution in SaaS product development.
The confluence of machine learning and artificial intelligence (AI ) with cloud technology is also acting like a catalyst. Together, they are creating opportunities for the global SaaS industry to grow from its current valuation of $317.55 billion to $1,228.87 billion by 2032. The fusion is also making software development, deployment, and management easier than ever. As a result, companies now offer solutions through a web browser while experts take care of maintenance and security.
If you are a startup looking for product development or a SaaS product owner trying to optimize your existing SaaS products, this blog is for you. It has covered SaaS product development process and the optimization strategies along with costs and in-house vs. outsourcing development decision.
What is a SaaS product?
A SaaS (software as a service) product is cloud-based software that can be accessed through a web browser. Unlike traditional software, users do not need to install it on their systems/devices. Instead, customers can subscribe to the service monthly or annually. Examples include Facebook, Dropbox, and Slack.
Now let’s determine your next steps.
Are you considering building or improving your existing SaaS product?
To successfully help you in the SaaS product development process, we must first understand your starting point:
- Are you starting from scratch? Head to section: SaaS product development from scratch.
or
- Looking to improve your existing product? If yes, then jump to section: Optimizing your existing SaaS product for growth.
SaaS Product development from scratch
If you’re starting from scratch, the first step is to validate your idea and define your product vision.
Define your product vision
Don’t start building your product immediately; first, check and ensure there is a demand for it. Conduct extensive market research to determine your target audience’s pain points and existing competitor’s solutions.
For example, if you are thinking of developing a new SaaS application for people who love fitness, reach out to them, convey your idea. Ask what they think about the idea, how we can make it better, and are they ready to pay for that application.
Also, clearly identify your product’s value proposition: what specific problem will your product address and how will it improve consumers’ lives? Online communities like fitness forums and social networking sites such as Quora and LinkedIn can be helpful in this situation.
Clearly define your product’s core functionality
Once you’ve validated your idea start prioritizing core features for your Minimum Viable Product (MVP). An MVP is a simplified version of your product with bare minimum features. It will help you test your product with a small audience, take feedback from them, and work on necessary adjustments before the product/service is fully launched. This saves time and money on developing features that people may not find useful.
Building your own MVP becomes even easier when you know the right steps. To learn more about each stage, check out our 8-Step Minimum Viable Product Checklist.
Focus on user-friendly interface (UI) and user experience (UX) design
A user-centric strategy is important to develop a successful SaaS application. This involves putting yourself in the shoes of your target audience and knowing their needs, wants and habits in detail.
To do this, you can do extensive user research that will help you to bucket them into different groups, understand their opinions, and predict how they will interact with your product. You can also think about the goal a user would have- whether it’s buying, searching, or ordering something- and consider what they feel during these stages. By empathizing with their journey, you can ensure a seamless user experience, resulting in greater user adoption and retention.
Select a development process that meets your needs
Agile is a quick approach to get your product into the hands of users by focusing on what they really need. Although there are several approaches for developing SaaS products, but agile development is commonly used for SaaS projects. Agile allows you to break down the development process into smaller segments with specific goals. This allows for faster development cycles and easier iteration based on user feedback
Test and iterate!
Create a team of QA engineers and product testers to thoroughly analyze your SaaS product using manual and automated testing. This ensures smooth functioning and eliminates bugs before launch.
Also, involve analysts on your development team to evaluate feedback and data received from beta testers for your Minimum Viable Product (MVP). They could suggest potential use cases, identify glitches, prioritize improvements in future versions based on insights gleaned.
Pick the right tech stack
Choose a technology stack that supports your project team’s requirements, scalability demands, and skills. You could choose one from popular and well-known solutions such as MERN, MEVN, MEAN, serverless architectures, PERN, LAMP, and Ruby on Rails. These stacks have extensive developer communities, comprehensive support resources, and many pre-built components that simplify development and maintenance.
Aligning your IT stack with industry trends and community preferences ensures your project is on solid footing.
Other considerations
Implement strong security measures from the beginning to protect user data and ensure compliance with applicable rules. Plan a smooth deployment process and set up protocols for ongoing maintenance and upgrades.
By following these stages and making regular iterations based on user input, you can increase your chances of creating a successful SaaS solution that addresses a genuine need and gains traction in the market.
Optimizing your existing SaaS product for growth
If you’re currently in the SaaS game but facing challenges with your product, then the process takes a slightly different approach. Here, the focus shifts to determining what is working and what is not. To identify the areas of improvement, you’ll need to go into details of your customer data and competitors’ offerings.
Start by Identifying areas for improvement
Conduct a deep analysis of user feedback and support tickets. This analysis will give you a bird eye’s view of customer pain points, feature requests and potential areas where users might be confused. By using this qualitative data, you can also discover user problems and how you can improve their experience.
Customer churn, or the rate at which consumers abandon your product, is another important metric. Analyzing churn data allows you to see which groups of users are churning and at what stage in their journey. This could show features or functions that are causing people to leave your site, allowing you to focus on improving them.
Don’t forget to keep an eye on the competition! Researching your competitors’ features and market positioning can reveal gaps in their offerings that you can fill with your own product feature additions.
Also look at user engagement metrics such as active users and session duration to see how customers are interacting with your product. By analyzing these indicators, you can find areas with low user engagement. You can then either improve that section or add functionalities to re-engage users.
Prioritize and execute improvements
Once you’ve identified areas for improvement, rank them based on their potential impact on user experience and retention. Prioritize critical issues over improvements or new features. Try to add more manageable, quick-to-implement features that will increase user satisfaction and generate quick wins. Use agile development approaches to enable rapid iteration and responsive changes based on customer feedback.
Improving an existing SaaS solution requires continuous innovation. Stay ahead by keeping track of industry trends, technological advancements, and competitors’ products. Updated product with new features and improvements improves user engagement.
Scaling and securing your infrastructure
Reviewing your current infrastructure can reveal potential bottlenecks for growth. To achieve this, conduct a comprehensive audit of your existing systems.
Analyze server performance, database efficiency, and network speed to detect any issues that are causing delays or restricting user capacity. Use performance monitoring tools to gain insight into response times, error rates, and system load.
Once you find the bottlenecks, start implementing solutions. For example, if your database queries are slow, you can optimize your database schema by adding indexing. For issues related to server performance, consider upgrading the hardware or migrating to cloud that offers better scalability. If managing traffic is a problem during peak demands, explore load balancing, caching, and auto-scaling techniques to distribute traffic efficiently.
One of our customers, a world-leading mobile ad platform, faced the challenge of keeping response times under 150 milliseconds and reducing ad servicing costs before scaling rapidly to meet a 1200% yearly growth rate.
By optimizing their infrastructure, streamlining processes, and leveraging big data for faster processing, we helped them achieve remarkable results. Their platform went from processing 22 million to 8 billion ad requests daily, with a 94% reduction in eCPM costs! They’re now equipped to handle 1800% yearly growth without major architectural changes. For details, See the full success story here!
Also, don’t forget to prioritize robust security measures to protect user data. Implement multi-factor authentication (MFA) to provide an additional layer of protection for user logins.
Cost considerations: in-house or outsourced SaaS product development
Cost is one factor that can make or break a business. It is even more daunting for startups. That’s why development cost can influence your SaaS product development process.
There are two most popular choices: in-house development and outsourced development.
In-house development
In-house development offers the advantage of having direct control over the development team and communication. However, it has its own limitations. Building an internal team requires a significant upfront investment in salary, hiring, benefits, and infrastructure.
Recruiting skilled developers or CTOs with the technical proficiency your SaaS product requires can be difficult and time-consuming, especially for startups with limited resources and budgets. Also, an in-house team may lack the specific skillset needed for your project.
Outsourced development
In contrast, outsourcing SaaS product development is a cost-effective option. By outsourcing, you can easily build software solutions within a short span of time while keeping development costs within your budget. Outsourcing eliminates the need for a large upfront investment and reduces overhead costs associated with salaries and infrastructure.
In fact, findings of Deloitte’s 2022 outsourcing survey report suggest that 57% of CEOs choose outsourcing primarily to save on cost. Partnering with the right outsourced development partner gives you access to a larger talent pool with diverse skill sets. This allows you to take advantage of specific skillset/expertise that might not be commonly available in your area.
Credible outsourcing agencies can also offer flexible scalability of resources as your needs change.
While outsourcing has many advantages, it is not without its challenges. Communication can be a challenge, especially when working across time zones or cultural differences. It is essential to select an outsourcing partner with a proven track record and established communication channels. To ensure a successful relationship, focus on creating a clear project scope and maintaining open communication throughout the development process.
Making the right choice
The final choice between in-house and outsourced development is based on your individual needs and resources. Think about your budget, the complexity of your project, the availability of qualified developers in your area, and the level of control desired.
Here’s a breakdown to help you choose:
| Choose in-house SaaS product development if |
| You have a significant budget and can afford to create a dedicated development team. |
| Your project is extremely complicated and requires strict control over all aspects of development. |
| Direct and regular communication with developers is vital to the success of the project. |
| Choose outsourced SaaS product development if |
| You have a limited budget and want a cost-effective solution. |
| Your project requires unique skill sets that may be difficult to locate locally. |
| You value scalability and the ability to resize your development team as needed. |
| You are comfortable with clear communication protocols and can manage a remote team. |
Remember, there is no one-size-fits-all solution!
The best approach might even involve a hybrid model, leveraging a mix of in-house development for core functionality and outsourcing specific tasks or projects that require specialized skills.
We have a similar experience of teaming up with a leading digital fintech platform. They wanted to build and launch a new technology product to capture the market demand. However, a tight deadline and a limited engineering team presented significant challenges. We streamlined their process, filled skill gaps with our expert engineers, and fostered a seamless collaboration. The result? A successful launch of their entire product in just 5 months! See the full success story here!
Conclusion
Developing or improving a SaaS application is an exciting journey. This requires understanding of the requirements, prioritizing features, and making smart development decisions. Collaboration with a tech team can help you to a large extent. They can not only reduce costs but also free up your bandwidth for greater involvement in business strategies.
We have developed this guide by analyzing details from our experience of building 200+ core tech products. However, the maximum impact happens only when you adopt a product mindset and have top talents in your team with the required tech expertise and a focus on innovation to solve unique problems and build differentiators.
Talk to our experts if you want to collaborate for scalable SaaS product development.
Taking the next step
This blog has given an overview of the SaaS development process and the importance of cost concerns. However, the journey does not end here. If you’re thinking about outsourcing your development, here are some resources to help you get started.
Check these 7 signs: Are you facing these challenges while developing your SaaS product?
3 Steps to Hire an Offshore Software Development Team for startups
How to effectively communicate with offshore development team?
We encourage you to explore these resources and take the next step in developing or improving your SaaS solution. Remember, with the right methodology and a focus on profitable development, you can bring your idea to life and master the fascinating world of SaaS.
