SaaS Development 2024
Tutorial from Zero to Hero

Table of contents

1. Disclaimer: SaaS is just a business model
2. What is SaaS?
   1. SaaS definition
   2. SaaS examples
   3. SaaS benefits
3. SaaS Development
   1. Planing
   2. Validate SaaS idea
   3. Technical implementation
   4. Marketing
4. Summary

Disclaimer: SaaS is just a business model

Before we get into the details of SaaS development, it's important to understand that SaaS is just a business model. This means that the development of SaaS products not only brings technical challenges, but also many business challenges.

So first things first: SaaS development is about creating software products that solve a problem and thus offer customers added value.

Just because something is SaaS does not mean that these rules suddenly no longer apply. The same old basics apply to SaaS products as to all other products. Solve the problem and create added value, otherwise it won't work.

What is SaaS?

SaaS definition

You: Explain SaaS to me like a 5-year-old.
AI: Imagine you have a toy that you really like, but it's not yours, you let someone else use it as long as you give them a bit of your pocket money each time. The SaaS business model is similar: instead of people buying a computer programme once and keeping it forever, they "borrow" it over the internet and pay for it regularly - like a monthly rent. This allows them to use the programme without actually having to own it. And when they stop paying, access to the programme stops, just like when you stop paying for your borrowed toy.

It's as simple as that. You can find out more here.

SaaS examples

SaaS products come in all shapes and colours. Here are a few examples:

• Netflix
• Salesforce
• Spotify

SaaS benefits

The SaaS (Software as a Service) business model is characterised by its high profitability. By offering software directly via the internet, companies save considerably on the usual distribution costs, which leads to considerable profit margins.

A high degree of automation is another key feature of SaaS. Many processes, from customer acquisition to support, can be automated. This not only increases efficiency, but also makes the business easier to scale. Automation ensures a consistent, error-free user experience.

Monthly payments offer advantages for providers and customers. For providers, this means a steady cash flow, which simplifies financial planning. Customers appreciate the ability to pay flexibly for software usage on a monthly basis, which improves accessibility.

SaaS development

The development of SaaS products consists of 4 steps that are repeated iteratively over and over again:

• Planing
• Idee validation
• Technical implementation
• Marketing

SaaS planing

Initially, you have to think about what your business model is. What problem are you solving? What added value do you offer? Who are your customers?
You need to be able to answer these and other questions or find out. The Business Model Canvas can help you here. This post explains in more detail what the business model canvas is and how it works.

In our opinion, there are 5 important questions you should ask yourself:

1. What problem do you solve or what value do you offer?
   This is probably the most important question. If you don't solve a problem or offer any value, then your product won't be successful.
   A good indicator is whether your solution saves customers time or money. After all, this is what customers are ultimately prepared to pay for.
2. What solutions are already available and how can you stand out?
   There is always competition. It is therefore important to know what is already out there and how you can set yourself apart. This can be through better quality, better service or a more favourable price. As a rule, however, it is not recommended to differentiate yourself based on price. Find a niche and become the best in it.
3. Who are your customers and how can you reach them? No customers, no business. It is therefore important to know who your customers are and how you can reach them. The better you know your customers, the better you can develop and market your solution. It is particularly important to know how you can reach your customers. This is the only way you can validate your idea later on. As long as you don't talk to your target group, you don't know whether your idea is good and it is therefore very risky to invest in its development.
4. How big is the market?
   Another important point is the size of the market, as this determines how much turnover you can make.
   Example: If your target market consists of 1000 people and you can reach 10% of them, then you have 100 potential customers. If you can win 10% of them as customers, then you have 10 customers. If you get €10 per month from these 10 customers, then you have €100 in sales per month. This is a very simple example, but it shows that it is important to know how big the market is and how much of it you can reach. A conservative conversion rate is 1-2%.
5. What can a prototype (MVP) look like?
   If you have answers to all the questions and you are still convinced of your product, then it is time to develop a prototype. This prototype should only solve the core problem. Everything else is unnecessary.
   The prototype does not have to win a beauty prize. You want to go to market with your prototype as quickly as possible to get feedback. SaaS development can begin.

Idee validation

Now it's time to validate your idea. This means that you talk to your target group and find out whether they would buy your product.

It can make sense to create a prototype (MVP) for this purpose. However, this depends heavily on how complex the MVP is. If it is too time-consuming to create a prototype, you can also simply create a landing page or a click dummy.

It is important that you not only ask whether customers like your product, but also whether they are willing to pay for it. The best validation is when customers give you money.This can take the form of pre-orders, for example.

Important: Even though it is often said, don't treat your idea like your baby. Validating your idea is a purely rational process. If your customers aren't willing to pay for it, it's better to find out now than later. You can't change your customers, but you can change your product or ask a different target group.

Technical implementation Entwicklung

Once you have validated your idea, it's time to develop your product. Here it is important that you focus on the essentials. This means that you only develop the features that make your product unique and solve the problem that your customer is willing to pay for.

If you have little technical knowledge, then it makes sense to seek advice from experts. We are happy to help you anytime. Feel free to book a free consultation here.

In general, however, we can give you a few tips for SaaS development:

• Don't make it too complicated: Almost any tech stack can solve your problem. No matter whether Node.js, Python or PHP.
• Don't overengineer: Don't worry right away about how you can scale to 10 million users. It's 1. very unlikely that you'll reach that soon, 2. a simple tech stack scales very well and 3. it's just holding you back.
• Marketing: Don't forget that you need to market your product. Think about how the technical solution can be built to help with marketing.
• Iterative: Develop iteratively. This means that you keep developing and testing small parts. This allows you to react quickly to feedback, improve your product and keep an eye on progress.

• Figma for designing apps
• Framer to create landingpages
• Hetzner for hosting
• Stripe for payments
• Typesframes to create martketing videos
• Canva to create images and graphics
• ClickFunnels as CRM
• MailChimp for email campaigns and newsletters

Marketing

Once SaaS development is complete, it's time to market your product.

As you have already validated your idea, it is recommended that you initially use the same channel to market your product. This means that if, for example, Google Search Ads worked well, then you should continue to use Google Search Ads.

It is important that you always keep an eye on your customers, talk to them and gather feedback. This way you can find out which other marketing channels are promising. Examples of marketing channels are Google Ads, Facebook Ads, LinkedIn Ads, SEO, content marketing, email marketing, etc.