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6 Things You Need to Know About Starting an SaaS Company

Saas - Software as a service

Getting your start in cloud computing or the SaaS community is a little different today than it was even just a couple of years ago. The support is definitely there, but operating an SaaS system and environment can be much more expensive.

A 2016 report revealed 64 percent of small and medium-sized businesses rely on SaaS or cloud computing products for normal operations. Overall, these clients have contributed to a major surge in the SaaS and cloud computing markets. Many of those companies have already increased their use and dependency on SaaS products since that report came out.

The potential for growth is there, and you have many opportunities in front of you even before you’ve launched a business or product. But what should you be mindful of before rolling out a service? Are there any regulations, standards or rules to be aware of? What about your customers and clients: Are there any details you should know about the greater market?

Every startup or business professional wants some winning advice before making a final decision, so we’re going to list a few things you should be aware of. Let’s jump right in.

  1. Aim Small, Miss Small

Anyone with experience in the cloud computing and SaaS market will tell you about the “bottom-up” strategy. Start with something small — a minor concept that offers little in the way of features. This approach keeps your scope manageable and allows you to provide a fully working service.

Then, rely on the Internet to gain customers, starting with smaller groups or demographics first, and working your way to a more expansive customer base as you add new features and functionality. In other words, start with the bare minimum, keeping the basic features available at the start, and expanding ever so slowly as your audience grows.

This strategy also helps mitigate your risk of failure, especially regarding operating costs and hardware delivery. You will be responsible for maintaining the necessary remote systems, hardware and software, and that alone is resource-intensive. Focus on your initial offering before moving on to the bigger targets.

Keep in mind, following this advice doesn’t mean you can’t rapidly scale or grow your company in a shorter span of time. It simply means you should aim smaller at the outset. The fastest-growing SaaS companies scale their organization rapidly, growing byas much as 56 percent per year.

  1. Focus on Mobile as Much as Possible

More and more business owners are turning to mobile devices, apps and on-the-go experiences in response to their mobile-oriented customer base and audience. As a result, you should either focus solely on mobile, with desktop service as an aside, or stick with a cross-platform approach at the very least.

According to Intuit, 43 percent of business ownersuse their mobile device as a primary tool for running their business. Furthermore, mobile Internet traffic has long surpassed desktopas the main contender for overall use among consumers. If you don’t provide a mobile-friendly offering, you’re going to be alienating a large portion of your audience from the get-go.

  1. Look to Your Customers for Growth

During the development and growth of your product, certain use cases, features and elements of the service will take priority. This natural occurrence happens almost out of necessity as a response to how your customers and clients use your tools and software. By all means, focus on your development the way you want it to be done. But you should also learn to look to — and learn from — your clientele for various insights, as well. They are, after all, the people who will be using your products and services day in and day out.

There’s always room for improvement, and that means taking suggestions and collecting insights from the people most closely associated with your products and services. The sooner you remember and honor this, the better off you’ll be.

  1. Subscriptions Are Ideal

When you pay for a product once as a consumer, there’s no guarantee you’ll continue to pay for future updates, revisions and products. In a perfect world, yes, every single customer would remain loyal to your brand and continue to support you for the foreseeable future — however, we don’t live in such a plane of existence.

That’s why subscription-based pricing — albeit reasonable and fair — is an ideal source of revenue for any cloud or SaaS-oriented product. It provides a reliable and continuous stream of cash, which you can invest into your regular operations, maintenance and future improvements. That’s important, because the operation of a cloud service alone can be costly once you take all the required hardware, cooling and manpower into account.

  1. Check Your Guidelines

Depending on where you are based and what customers you will serve, you may need to brush up on laws, regulations and various restrictions. That way, you’ll be covered in the event of a potential incident, but it also helps you structure your systems for ultimate compliance.

Another important thing to remember is that a lot of these technologies are in their infancy in terms of lawful guidelines. Various departments, agencies and government bodies are still working out the kinks, which means things can and will change over time. Just take this recent ruling, for example, where the tax department decided a California-based cloud provider of video services was subject to paying sales tax on their software because they have an office located in New York. It does seem silly they would have to pay sales tax, but the local department concluded it to be the case.

Pay attention to various rulings and regulations related to similar products and services, because it may affect you either now or later. It’s a good idea to dedicate a small team to this, or to hire a legal team to this end.

  1. Make Customer Service a Priority

With continuous and operational services, it stands to reason you’ll have customers who need assistance. They’ll either need help setting the platform and client tools up, working with the products directly or even learning how to use various functionalities. Combine that with the nature of how people use SaaS technology, and it becomes obvious how easy it is to lose various customers.

You want to make sure customer service is a priority at your company, and that every department and professional is dedicated to providing reliable support to customers. The more satisfied and supported your customers feel, the more willing they’ll be to continue paying for your products or services.

Don’t make anyone wait hours or days for a proper response, especially if they’re trying to work with your products right now. Cloud services and technologies are supposed to be continually available, and that means your customer service needs to be just as active.

James, CEO Cavelo
recovery start up
Plant growing out of a pile of cash representing Start up Capital

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