The SaaS business model has a great reputation for almost any type of software. A SaaS solution serves as an ultimate tool to fix any issue for users, while for business owners, it is a profitable product.

But creating and launching a software as a service application takes time, money, and, of course, thorough research, just like in any business project. Between a clear concept of a successful cloud-based product and its execution lies a complex SaaS development process.

As a design agency for SaaS, we know that this process is not only about launching good-looking web apps but about building a whole SaaS product from scratch so that the customers can make use of it right after it was introduced. So, let's answer the “ how is SaaS developed?” question and start with the MVP. 

Why start with MVP?

 When it comes to building SaaS from scratch, starting with an MVP is a smart move. It helps you save time and money as you're not jumping straight into costly development and launching. 

The MVP (Minimal Viable Product) is the initial version of your software solution that includes only the most essential feature. An MVP allows you to quickly introduce your product to the public, receive feedback and reiterate on the product when needed. The main goal of an MVP is to find out if the customer is willing to pay for the product.

An MVP will highlight which features work well, and what could be improved. Such a review on the strong and weak sides of your solution will help to fix all the issues shortly and adjust to the customers’ needs.

SaaS platform development can start quite small and simple. For example, one of our clients, Haven Diagnostics, was first making agent-based models for private clients. When they decided it's time to grow, they wanted to minimize the risk of spending too much money on developing something that their target audience wouldn't find valuable. Our work therefore included defining the value proposition, understanding customer problems, brainstorming, competitor analysis, and more.

But what stages does the MVP development involve, exactly? Let's walk through the whole process step-by-step.

What are the steps of SaaS development?

We will discuss the SaaS product development process with all the important points you need to consider when building a cloud product from scratch.

Discover a problem worth solving

There are stages of SaaS development you might be able to skip or interchange, but not this one. The first thing you have to do when developing your SaaS is to define a clear concept.

The main goal of any cloud software is to make the life of its users easier. To reach this goal you have to research your target audience and define the problem your SaaS will solve (how it can simplify people's lives).

Usually, SaaS products optimize the work process, help to save space on the hard drive, or make it possible for customers to use an application with their smartphones from any location.

Let's take Prift as an example. Most personal finance apps focus on short-term financial goals and don’t provide long-term savings objectives. Pension platforms forecast the long-term goals, but don’t cover all personal financial assets. And using spreadsheets or hiring a financial adviser is not viable for everyone. So, the problem Prift solved was combining the capabilities and ease of use of a personal finance app while helping people to manage long-term financial goals. 

It's okay to build a SaaS that solves a niche problem. The takeaway here is that every successful business idea is aimed at solving a specific customer's issue and you have to define this issue to create a clear concept.

Find your competitive advantage

The next, also inevitable stage of building SaaS products, is conducting thorough competitor research.

The analysis of your competitors includes evaluating the following features:

• UI/UX design
• Functionality
• Marketing methods
• Pricing strategy

As well, pay attention to the feedback customers leave your rivals. It will help you better understand what your target audience likes and dislikes, and what they expect to receive from your service.

It is worth paying special attention to the leaders of the market (for example, Shopify for e-Commerce solutions, Salesforce for CRM, Jira or Trello for project management platforms, and so on). Learn what makes them successful and figure out how you can use their experience in your project.

There are several ways to cope with the competition. Some of them are to choose a narrow niche, consider pricing or develop a much better solution. If you want to learn more on how you can beat the competition, check out our article on red ccean strategy for overcoming competition.

Set goals and desired outcomes

It is crucial to establish clear goals and desired outcomes for your product. For instance, you may set objectives such as acquiring a specific number of users or referral customers within the specified timeframe (for example, first three months). These milestones indicate whether you have a product-market fit. Defining such targets helps guide your development process, providing a tangible measure of success. 

By having well-defined goals and desired outcomes, you can align your efforts, make informed decisions, and effectively track the progress of your product, ensuring that it remains on the path towards achieving meaningful results.

Build a prototype

Prototype is a stage of SaaS application development which is supposed to showcase the product's functionality to test whether users like it. So, it must be relatively close to the final product in terms of visuals. A UX prototype is a rough version of a product that allows to understand what idea, user flow, and layout it has, and how the future product is going to work. With its help, you can present the idea to investors or your colleagues), test the idea and design, and collect feedback.

To save time and costs, you might want to use ready-made tools, low-code and no-code platforms so at this stage you don't get too wrapped up in tech development.

At this point, you might also want to involve product designers.

Develop monetization strategy

Now we move to a very important step in the development process of a cloud-based solution. You have to determine how to make money with your SaaS to be able to adjust your product to some particular pricing model later during the following stages. There are various SaaS pricing models to consider.

Free of charge (ads included)

The first method is to give your customer access to all the features of the software for free. Using this model a vendor makes money with the help of ads. You sell "space" on your page (in your app) to show ads videos, posters, and similar.

Free of charge method allows you to reach a wide audience, so it gives a nice possibility to test your product. The disadvantage of this model is that it can make the UX worse.

Companies that use this method: Facebook, WeatherBug.

Freemium

The Freemium pricing model involves offering the basic pack of features for free with the possibility to upgrade an account and get some extra functionality (become a premium user) or get rid of annoying ads.

Companies that use this method: MailChimp, Dropbox, Grammarly.

Subscription-based (Flat Rate)

This model is easy to implement and sell. The user pays for a subscription (monthly or annually) and receives access to the whole set of features.

Companies that use this method: Netflix (up to 2020), Precog

Usage-based

The price your customer pays depends on the usage. The user is charged for the amount of data used, calls made, transactions done, and such.

Companies that use this method: Amazon Web Services.

Blended

A blended method of monetization is a combination of several pricing models. For example, a company can offer some free features with the ability to upgrade plus show ads in their app.

Companies that use this method: Spotify, Vimeo.

Remember, you don't choose a pricing model once and forever. As your SaaS business evolves, you may change the way of monetization depending on your needs.

Design the product

Design is probably one of the most important aspects that contributes to the SaaS success. Good SaaS UI/UX design can make the product addictive and impossible to give up. The experience customers get when interacting with your service influences the conversion and retention rates.

That's why when choosing a designer search for someone who has experience of working with SaaS products. Such a designer will understand what you want to create, have a clear understanding of a SaaS design process, and will help you come up with all the requirements for the cloud product.

Here are some tips we want to share with you when designing a SaaS application:

• The sign-up process. It is vital to make the sign-up for your service as quick and easy as possible. The fewer information users have to fill, the more they are willing to subscribe. Collect only essential data first (sometimes the email address is enough).

Here’s an example of the Slack's sign-up process. To start using this cloud messenger you need to only fill in an email address or simply click “continue with Google” button.

• Onboarding process. Give your customers clear guidance on how to use your product. None of the app features should confuse the user. SaaS UX has to make the onboarding process easy and intuitive.

Take a look at the user onboarding in Gridle, a client experience platform. They hired our team to redesign their SaaS platform.

We designed the onboarding process so that it gives the customer a clear understanding of what they should do first.

• Navigation. Smooth navigation helps users intuitively find the needed feature or information quickly and easily.

For example, Hootsuite has an expandable side navigation bar that is minimal and intuitive. 

• Dashboard. A good SaaS design should present important information quickly to its users. The most frequently accessed data, updates, pending approvals, and a quick summary of the key events encourage users to keep coming back. That’s why when designing a dashboard try not to load it with unnecessary information. Make all the data easy to access and comprehend.

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Here is an example of a dashboard designed by our team for Textmagic, a customer experience platform. Textmagic’s comprehensive dashboards allow managers to easily track the performance of their team and customer satisfaction rate. 

As a design company, our team has worked with both existing SaaS solutions and helped design brand-new projects from the ground up. You can see our case studies to find out more.

Develop the product

Finally, we have come to the core part of SaaS development process and it is.... the development itself!

This stage includes many technical aspects, like making a choice between programming languages that will allow you to keep up with the latest trends and modern technologies, setting up the database architecture that provides maximum security, and the ability to scale your business later, creating the architecture of the project, integrating the API to maximize SaaS capabilities, and much more.

Software development as a service is quite costly. This stage requires the biggest spendings unless you can do your own programming (then it will cost 0$). That's why, as we said in the very beginning, it's best to start with an MVP to make sure the idea doesn't flop and you don't spend money on nothing.

After testing and debugging your MVP you will understand what features you need to include in your long-term product. And now we move to the last but not the least step in our development process – maintenance.

Improve. Test. Get feedback. Improve. Test again

SaaS development life cycle is not a straight line, but exactly what it says on the tin – a cycle. To be successful a SaaS company needs to constantly improve its product. It is crucial to keep your service running without any issues at any point in its life cycle. That's why to stay competitive you have to constantly monitor user's needs, research the market and latest trends, track innovations and optimize your product.

After your product has been on the market for a while, time for change comes almost inevitably. For example, Acadeum was already a reputable and established product. However, the support team noticed the growing number of tickets. It turned out, user experience was no longer satisfactory. So, quite a redesign was needed to improve the app, which what exactly what Eleken team did.  

To sum up

To develop a successful SaaS application from scratch you need to:

• Clearly define the concept
• Conduct the competitor research
• Define the pricing model
• Find a SaaS designer
• Find a developer
• Build and test an MVP
• Continue improving the product

Lastly, when studying the question of SaaS development keep in mind that your SaaS product has to deliver value. The concept it represents should coincide with your customers' needs. Take care of clear navigation, human-centered design, and don’t overload your SaaS with unnecessary features to create an appealing and functional application. 

In our other article, we've shared some insights on how to build a successful SaaS product so if you're looking for some additional information, we highly recommend you to read it.

Whether you need to create a product from scratch or redesign an existing one, working with a professional design team is a must. If you're looking for ways to boost your product's UI/UX, drop us a line. As a pragmatic design agency, we at Eleken work with SaaS specifically and we can be a valuable asset at any stage of your journey.