What does it mean to create a good SaaS product?
The rosy picture is the following: you have an always-growing subscriber base, you're able to monetize your subscribers, and, once tried, customers continue using your product over time recommending it to colleagues and friends.
As a SaaS design agency, we know, building a successful SaaS product is like playing a Rubic’s cube — to make it good you need everything to magically click together. Sounds obvious, but the only chance for a newbie to win a Rubic’s three-inch beast is to google the winning algorithm.
In the case of SaaS, you don’t even have an algorithm to google it. Otherwise, we’d have 100% of successful startups.
However, there are two ways out here:
- We can investigate what prevents SaaS products from becoming good and gently mark those danger zones with black & yellow warning tape to avoid getting caught.
- We can analyze popular SaaS companies to figure out what makes them successful and learn from their experience.
Or we can do both! Let’s take a closer look at two variants.
What can go wrong with you SaaS and how to cope
Achieve your product-market fit
Despite being a top-line buzzword, the product-market fit is imperative for SaaS success, since for any business to survive, there must be people who will buy what it sells. The lack of market need is the #1 reason for failure, noted in 42% of cases.
The concept is vivid, but what are the indicators of the product-market fit? Sean Ellis, who ran the early growth of Dropbox and Eventbrite, came up with a simple survey.
Ask your users how they’d feel if they could no longer use your product with the three answers given — ‘very disappointed’, ‘somewhat disappointed’, and ‘not disappointed’. The group that answers ‘very disappointed’ unlocks your product-market fit.
After going through this survey with almost a hundred startups, Ellis found that the magic number was 40%. Most companies that struggle to grow have less than 40% of ‘very disappointed’ users, whereas companies with strong traction almost always exceed that threshold. And that’s in no way an easy task to keep 40%, as the case of Slack shows.
2015 was the year when Slack’s growth skyrocketed and the company called itself the fastest-growing business app ever. That year, Hiten Shah posed the question to 731 Slack users to find out that 51% of them would be very disappointed to lose Slack.
In 2019, a similar question asked by ProfitWell showed the product-market fit decreased to 26% only.
The remarkable reading here is the story of Superhuman. The company built its ‘very disappointed’ segment up from 22% to 58% and explained their road beyond 40% in the iconic product-market fit article.
Fight customer confusion
If your new shiny fitted-to-the-market solution is buried under the big, clunky, wasteful mess, the good chance is that nobody will notice how fitted it is.
Customers see your product and ask themselves. What problem does it solve? Why do I need it? How do I use it? What do I do next?
SaaS products are systems with multiple design layers and tricky user flows. They are difficult to explain, difficult to design and understand. So the answers to the questions above are not always clear enough.
“X-tech is a flexible and efficient price optimization & management software used for advanced price setting in various industries to ensure your pricing strategy forces you to provide reasons for the users to make a purchase and allows you to automate pricing analytics, optimization, and execution.“
Pfff, goodbye. Didn’t get what you do. I’d better stay with my good old app.
One more shot, how we do it at Eleken.
“Eleken is a pragmatic design agency for SaaS”.
A bit of cheating here — it’s easier to articulate a UI/UX design agency than a never-before-seen X-tech, but you got the idea.
Think different (no kidding)
When in doubt, B2B businesses keep their best serious face. To play safe, they use muted blues and greys everywhere. To decide on their next moves, they look to the left, and then to the right on their competitors to clone their new features and pricing policies.
It seems to be a proven, less risky way to go, but it’s completely ignorable.
What is so different about successful SaaS that makes them stand out? They get beyond the boundaries of boring B2B software and create products that are not just convenient but fun to use. People love using them.
Look at Notion with its nerd aesthetics and Slack with its confetti cannon color scheme.
If you’re seeking a way to break down the inertia and make people try something new, you can’t allow yourself to be an ignorable brand.
If you’re making money convincing people to prolong their subscriptions every month, you need to be an addictive brand.
If you’re Microsoft — it's alright, skip to the next step.
Define what can be considered a rock concert in your product niche and do it to become a rock star.
Take pricing (more) serious
Pricing strategy, or its absence, is what makes the difference between a fail and growth for 18% of startups. It's no surprise, given that the average SaaS startup spends only six hours to decide on a SaaS pricing strategy. Six hours, overall, to set, test, and sharpen everything.
So much blood and tears and sleepless nights to bring the product close to perfection and at the final stage of purchase, you have no idea whether you’re turning the potential clients away with huge price tags or, more likely, leaving your money on the table.
When companies think about growth, they think about customer acquisition and retention. But in fact, improving monetization had the largest impact on your bottom line, followed by acquisition and retention.
Image credit: priceintelligently.com
In the world of tech, pricing rarely depends on production cost, rather on the consumers’ needs and willingness to pay.
Think one step ahead
Over time, things are moving according to your product life cycle. As things move, you need to adapt.
When you're launching, it's about going all-in and working hard. When you're growing, it's about hiring the right leadership and climbing your growth curve as high as possible. Being on the top, you should be ready for stuff that comes beyond growth.
Here’s what is just around the corner:
- Audience saturation, when most of the audience that needs your product already uses your (or your competitors’) services and growth starts to slow down.
- Channel saturation, when your proven growth mechanism doesn't work so well anymore and growth starts to slow down.
- Market saturation, when more and more competitors rush in to capitalize on your market with lower prices and improved products. As a result, again, growth slows down.
Saturation happens sooner or later with any successful product, giving you a narrow window for innovation that can jump-start the new round of growth. So you need to figure out when it’s coming, accumulate resources for further expansion and decide in which direction you’re going to expand.
There are many other dangers lurking along your way to a good SaaS product, but they can't stop persistent entrepreneurs from building good SaaS products.
Now, let’s look at cloud-based companies that managed to make their way to the top.
Top SaaS businesses and what makes them successful
Here are some of the best SaaS businesses that managed to become successful, let’s see why people choose them.
Revenue: $ 883 million
HubSpot is a cloud-based marketing and sales platform. It focuses on attracting customers and leading them through the whole buyer’s journey. HubSpot is known for its wide range of tools for business growth. They help businesses with email marketing, blog optimization, and social media interactions.
Even though many software companies provide similar solutions, HubSpot stays at the forefront of digital marketing. What makes it different from other services?
- Inbound marketing. The first point is that HubSpot follows the inbound marketing methodology. It means they attract customers via content they create and not with pushy ad campaigns. Hubspot provides readers with valuable information and lets them decide what product to buy. They constantly create useful and relevant content on how to boost business growth. This way they gain credibility in the readers’ eyes. Whenever you type something related to digital marketing in your search engine, you get the results written by the HubSpot team at the top.
- All-in-one solution. This cloud service locates a full stack of tools to support the customer's marketing and sales process in one place. The user doesn’t have to switch between different platforms that, besides, do not always integrate with each other. HubSpot combines tools for different purposes in one cloud saas application.
- Easy to use. HubSpot's UI lets the user intuitively navigate through each component in the platform and learn very quickly how every tool works. The layout is clear and well-categorized so that even a non-technical person would understand how to complete the desired action.
In order to improve its UI and UX, Hubspot has even conducted a drunken user test. Yes, a drunken guy tested their UI design to measure how simple it is to navigate through the website. It’s funny, but it proves that HubSpot cares about a user-friendly interface.
To sum up, Hubspot’s strengths are inbound marketing, a full stack of tools in one place, and the ease of use of their product.
Revenue: $1.914 billion
Dropbox is one of the most profitable software companies that provide a cloud storage service. It allows us to store the information, share data, and synchronize files on different devices.
There are a couple of reasons why Dropbox is more popular than its competitors.
- It’s simple. Simplicity concerns everything in the Dropbox service. It doesn’t take much time for a person to understand how this platform works thanks to its minimalistic user interface. As well, no matter what OS you have, access to all features is available anytime on the Dropbox website. Dropbox doesn’t try to “look smarter” than its users. All features that it offers just work well and efficiently perform their function. This popular SaaS service is not overloaded with tools that no one tries, because they are too complicated for a regular customer. In general, Dropbox looks like just one folder that is extremely easy to use.
- It’s fast. If you have a new device and want to synchronize data on it, you don’t have to wait hours while the information is being transported through the Internet. Dropbox uses LAN synching which allows you to do it much faster.
- It’s platform-agnostic. Dropbox’s UX is equally coherent on Windows, iOS, or Linux. You will be able to access your files or shared data on different web browsers, devices, or platforms. Dropbox’s team did a great job of designing a consistent experience across desktop, iOS, and Android.
Dropbox does its job really well, it is fast, easy to use and it has great cross-platform support.
Revenue: $ 2,7 billion
Zoom is a company that provides cloud-based remote conferencing services. Except for video meetings it gives an opportunity to chat, share the screen, create workspaces, and hold webinars.
Many people are wondering how Zoom managed to become so popular, leaving behind such strong competitors as Skype and Google Hangouts. And again the general answer is the ease of use.
- Easy to install. As one of the SaaS benefits, you don’t have to download any applications, install them, and update. All you need is the browser and access to the internet. The user doesn’t need to spend time getting accustomed to this software. After registration, you understand how to use it intuitively. That leads us to the next advantage of Zoom.
- Great UI and UX design. The consumer-centric approach has raised the demand for convenient and simple video conferencing. Zoom made it possible to use their software from any device with only one click. They care about UI so much that when you look at the Zoom interface it almost tells you what actions to perform next. There is nothing that disturbs the visitor or makes them think of some technical issues of the software. The user can concentrate on their online meeting only.
By the way, one more feature that made Zoom so popular is that the user interface is consistent on the smartphone as well as on laptops.
Zoom cares a lot about the usability of their product and this fact makes them stand out.
Revenue: $2,93 billion
Shopify is a cloud e-commerce platform for online and retail stores. It provides a complete set of tools to set up, customize, and manage your business. Here are a couple of reasons why people prefer Shopify to other services.
- Non-tech friendly. Shopify allows people without technical experience to create and run an online store. Users subscribe to Shopify as they don’t have to care about development, updating, and server hosting. All features on the admin panel are logically structured which promotes an intuitive user experience.
- Graphic interface. Although the appealing interface has nothing to do with the platform’s functionality, it can improve the way the customer interacts with the service. One of the reasons Shopify has gained its popularity is a clear UI. It lets the person who sees this platform for the first time can handle it quickly and easily.
The above features make Shopify especially popular for those who want to save time and don’t want to care about any technical issues.
Revenue: $375,6 million
SurveyMonkey is a cloud software for conducting online surveys. Today the name of this company sounds like a gold standard in its niche and there are several reasons for that.
- User-friendly interface design. And again it’s all about being easy to use. SurveyMonkey dashboard will guide you through 5 main steps to design, distribute, and research your survey. As well, SurveyMonkey’s surveys work well on mobiles.
- A big choice of templates. This cloud platform offers more than 200 survey templates. They are divided into categories and are especially useful for beginners who struggle to construct an effective form. There is also a possibility to create a survey from scratch.
- The logic tool. This tool takes into account the user’s earlier answers and based on this information can hide some further questions. Depending on the answers the logic tool can redirect you to different pages.
SurveyMonkey managed to make complex software look user friendly.
Revenue: $401 million
Slack is the best cloud-based software for business communication. This real-time messenger allows employers to organize and manage dialogues according to specific topics, have private conversations, share files, etc. Slack has become a trusted means of corporate communication because of its:
- Design. Andrew Wilkinson, one of Slack’s designers, said that one of the reasons this messenger became successful is because it looks different:
“To get attention in a crowded market, we had to find a way to get people’s attention. Most enterprise software looks like a cheap 70's prom suit — muted blues and greys everywhere — so, starting with the logo, we made Slack look like a confetti cannon had gone off. Electric blue, yellows, purples, and greens all over. We gave it the color scheme of a video game, not an enterprise collaboration product.”
Slack’s interface was made not just for fun, it helps the user understand how the messenger works and makes it easy to use.
- Integration power. New technologies appear daily on the market and in case you need to include one in already existing software, there might be some problems. This doesn’t concern Slack, as it can integrate any technological innovations. For example, if you use Google Drive a lot in your work process, Slack can include its functions and allow you to interact with files from this platform without leaving the messenger.
Slack looks and feels different. The way the visual aspect is connected with this platform functionality makes it special and popular among users.
Okay, *slaps knees*
Now, if you’re making a SaaS startup, and everything seems too complicated – no worries. Take deep breaths, recall about the pitfalls that are waiting for you (carefully pay attention to your product’s market fit, its clear performance, personality, pricing, and life cycle stages), get inspiration from SaaS gurus' best practices, and come to Eleken for a human-centered design that will beat all your competitors.