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SaaS business

How to Launch a SaaS Business: The Essential Factors That Influence Success Based on Real-Life Stories

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Today, almost everybody wants to launch a startup, but not everybody knows how to launch a successful startup. There’s a lot to discover, and the most important things are learned by trial and error. But the good news is, you don’t have to learn the hard way – looking at somebody else’s errors and success stories will work, too. And you will find some in this blog, so keep reading.

If you are reading this article, I bet you don’t need extra arguments why you should be starting a SaaS company, but here is the proof from respected researchers to remind you why this is a good idea. Gartner forecasts SaaS end-user spending in 2023 to reach almost 200 billion of dollars. The growth has been huge during the last few years and it doesn’t seem to slow down.

Worldwide SaaS End-User Spending Forecast (Millions of U.S. Dollars)


As a SaaS design agency, we watch many SaaS grow from a prototype to scaled products with large market shares. That’s why we have a lot to say to the question “How to launch a SaaS business?”.

We’ve tried to squeeze all the steps of launching a SaaS product into one article and it was hard. So, we started thinking of the factors that make a product successful instead. Let’s say these are the basic ingredients of a good SaaS soup.

Clear value proposition like Slack

A classical value proposition is a short phrase that people place on landing pages. But to attract serious clients and market your product correctly, you have to know the real value that your product brings to users. Creating a clear value proposition is a must before launching a new SaaS product.

Let’s take Slack as an example: everybody knows it’s a great chat for teams and once you tried it, you understand whether you like it or not (though I am yet to meet people who don’t like Slack).

But Slack takes a serious approach to the business. Have a glimpse at this document where they describe the business value of Slack in more than 10 pages. They show very concrete numbers that explain how the performance of different departments (sales, HR, marketing) increases when they use Slack. 

 performance of different departments that use Slack.

By showing how you help businesses or people, you demonstrate the value of your product. We highly recommend following Slack’s example: consider thoroughly studying the benefits they bring to the customers and how they communicate them relentlessly. For another example, check out our e-book on business value of design.

business value of design

Measurable goals

To achieve the result, you should understand how to measure it. That is why goal-setting is important. Start with the market investigation. Make competitive research, predict the timeline of your product development, and establish the metrics to check up on your project at different stages.

You must have already heard about the SMART concept. It means that the goals you set should answer five criteria, such as specific, measurable, attainable, realistic and time-bound. How does it work with SaaS? Here’s an example.

Imagine, you are ready to launch your product and want to increase your sales by the end of the quarter. This goal meets only one SMART criterion - it is time-bound and you have chosen your deadline to review the results. Nevertheless, this goal is neither measurable nor specific. And it is quite difficult to define if it is specific or attainable.

SMART goals

What would SMART goal look like?

S is for accuracy what you want and how much you want it

M is for specific numbers that would allow you to determine if you have achieved your goals and analyze your results

A is for the real market situation that allows your product to grow

R is for your internal situation, resources you have and abilities of your team

T is for establishing checkpoints to review the results.

So, circling back to our example, the SMART goal will look like this: “I expect a 20% increase in customers, 50% website traffic growth, and 15% conversion growth by the end of the quarter, resulting in $100,000 revenue.

Right monetization

Freemiums and free trials are specific SaaS business customer acquisition models that help you show the benefits of your product to your target audience. But before you decide whether to choose freemium or trial, let’s have a closer look at both.

Freemium allows your customers to receive part of your product functions free of charge, while a free trial gives full access to all of the functions for a limited time period. Depending on your product specifics and the go-to-market strategy you choose, you can mix these two models.

However, there are more options available, such as flat rate, usage-based, or feature-based. If you want to learn more about them, read our article on SaaS pricing models.

Picking the right pricing strategies is a hard part of SaaS product launch strategy, but changing set pricing is even more daunting for emerging SaaS founders. Experiments with pricing seem like a huge risk in case it doesn’t work out. For instance, it first seemed crazy that a company with huge revenue such as Adobe decided to shift to subscription at some point. But, it worked out well for them. 

So, how do companies dare to risk and change pricing? The secret lies in testing. 

Let’s take Front, a customer communication platform, as an example. A long time ago, they were also intimidated by changing pricing. And then, they realized that to be more secure and well-informed they need to… change it more often.

how Front, a customer communication platform, moneize their product

Front started changing pricing every three weeks. They could handle the risk because they did it with small cohorts. This way, one can see the results with each price change and adopt the successful ones. Adobe was following a similar strategy. They didn’t go all-in without doing some testing with the subscription model, and you shouldn’t, too.

A lot of SaaS businesses try to compete in their market, establishing low prices either directly through cheap services or indirectly through sales and discounts. This allows attracting more users, but on the other hand, you will struggle to win their loyalty. It means that in order to retain them, you will have to constantly stick to a low pricing strategy.

Competing on value implies producing the best quality products. The opportunities to add value to your product are endless. All you need is a strong team and enough investments. On the other hand, this may be quite challenging and requires lots of resources.

Great user experience

There are very few products that succeeded while providing a bad user experience. To do that, they must be extremely genius, disruptive, and unique. Doing some effort to provide a better user experience through design and customer service is easier than being genius, disruptive, and unique. Focusing on UX can leverage the SaaS launch strategy and give a strong competitive advantage.

Each of us has some products that we just enjoy using. In most cases, this is due to a good user experience. Some famous examples are Dropbox, Mint, and Notion. It works especially well for products that are dealing with complicated things, for example, finance management.

Let’s consider Notion as an example: planned initially as a tool for no-code app building until it got close to failure and founders realized that few non-developers actually want to code. From that point, they started to focus more on user experience. Designing hard, Ivan Zhao, one of the founders, was noticed by Figma as one of the top users, spending 18 hours a day in the app.

It brought results: Notion reached millions of users who don’t think of it as just a no-code developing app and enjoy using it. The distinct visual style of Notion that Zhao describes as “if TheNew York Times made Legos”, became popular in a matter of months. Complex functions are hidden behind the minimal design and don’t scare the users.

Why does Notion provide great user experience?

Most of our clients are complex B2B products, and a smooth user experience is what makes them easier to use. That is a serious competitive advantage in a saturated market.

So, if you want your product to be successful, start by asking yourself: do you enjoy using it? Would other people enjoy it? And don’t hesitate to invest in research and UX.

Great team

Some founders manage to launch a product and get investment while working alone, but nobody managed to become a top player on the market without a great team. According to researches, issues with teams are among the most common reasons why products fail.

On the contrary, most successful startups can say they have great teams, and many of them introduce special strategies for team development. For example, let’s take a look at Zoho, a cloud software suite for businesses. 

One of the secrets to gaining success for them was investing in their team. By creating the best conditions for the employees, they ensure that they remain in the company longer and bring better results.

How Zoho presents their team
Image credit: Zoho

Getting a great team includes a lot of work: establishing healthy team culture, good communication and feedback, and of course, efficient processes. No need to do all of it at the SaaS product launch stage, but laying the foundation early will do a big favor to your company.

Hiring your first team members can be very intimidating and time-consuming. That’s why many people continue working as a Swiss Army knife: they simply can’t find enough time in their tight schedule to browse through hundreds of CVs and run interviews.

If that’s your story, try thinking outside of the box: hiring is not the only option. Your objective is to get things done, not just browse through CVs and hire someone. In the case of SaaS web design, finding an agency can be a solution. We provide the shortest time from the first call to the start of the work. Also, we provide a 3-day free trial so that you can decide fast instead of wasting lots of time on the hiring and onboarding processes.

Summary

We can’t give you a detailed recipe for a successful SaaS product launch, but we gave you some examples and a list of key ingredients that are the basis. Let’s recap?

  1. Clear value proposition
  2. Measurable goals
  3. Right monetization
  4. Great user experience
  5. Great team

If you are still lost, think of getting some help from a business developer or someone else. Don’t know where to start? Read our article on how to hire a SaaS dream team.

Masha Panchenko

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