receives compensation from some of the companies listed on this page. Advertising Disclosure


What to Look for in a SaaS Startup Idea to Make it a Success

Zaheer Dodhia
Zaheer Dodhia

Check out these tips to find out if your SaaS solution will be successful.

Are you thinking of starting up a SaaS business? The software as a service (SaaS) model has taken over the business world by storm, and today there are more SaaS startups mushrooming everywhere. The reasons for its increasing popularity include:

  • SaaS business models are easy to start
  • You don't need much startup capital
  • They are readily accessible
  • Saas models are easy to operate

However, the above factors don't guarantee that your SaaS business idea will be a success. This is why I've taken the liberty to give you a few pointers regarding what to consider to come up with a winning SaaS startup idea. In the following sections I will cover:

  • Why SaaS business model is so popular
  • How to determine an idea is a success or now
  • How to validate your SaaS idea
  • And suggest some ideas if you don’t have any 

But first, it’s crucial to explain what exactly this SaaS business model entails so that you have a better understanding of the concept.

What is SaaS?

SaaS is a software program that's hosted by a third-party service provider according to Search Cloud Computing's definition. It's designed to service businesses that don’t have the capacity – or resources to have an in-house IT department. Popular SaaS service providers include:

You don't need to download the software onto your device laptop or mobile phone; you can access it directly online.

Advantages of using the SaaS model

Earlier on we mentioned how the software is affordable. As a startup company, you seldom have excess funds at your disposal to run your business effectively. A program that allows you to reduce costs and make tasks easier is always welcome.

With this SaaS model, you get to automate and delegate the minor tasks which save you both time and money. By definition, other numerous advantages associated with using this model include the following.

Flexible payment options

SaaS is appealing to many startups because it doesn’t have rigid payment options. In most cases, you have to pay monthly subscriptions to access the program. And you can decide to terminate your subscriptions at any time.

No special software required

SaaS programs don't take much time to implement. This is because no special software is required for it to function. As a result, minimal training is required to operate it.

Easily customizable

You can customize the software depending on your business needs or size. Its flexibility means you can decide to access more or fewer features.

Can be accessed from anywhere

The software can be accessed from anywhere as long as the device is connected to the internet. This is because data is stored in the cloud.

Allows for automatic updates 

All technical issues are handled by the service provider. In addition, the software allows for regular automatic updates. You don’t have to burden your IT department with these updates.

Success factors to look for in your startup idea

The first thing you need for your business idea to succeed is passion. This way you generate income from doing what you love. But passion alone won't guarantee your idea's feasibility. Rather start by asking yourself the following questions.

Does your idea provide a solution?

Will your business idea provide a solution to customers' problem? Will it fill a void in the market? Conduct comprehensive market research to determine where there’s a need and how best you can offer a service or product that satisfies it.

Make sure there's a market for your idea. This means you must:

  • Ensure the product or service you're providing will be useful to your prospective clients.
  • Know how exactly the product will benefit prospects.
  • Guarantee that your product or service offers affordability to your target niche.
  • Determine how large your market is.
  • Identify potential growth of the market including estimated margins.

Is the startup idea innovative?

For your SaaS business idea to stand out and attract clients, it must be unique and creative. Ideas that are easy to replicate will make it easy for other businesses – or individuals – to mimic your product or service. To ensure that your business is viable, your idea must keep competition from similar startups at bay.

Does it have a competitive advantage?

Granted, finding an idea that's 100% original isn’t the easiest of tasks. If your idea is easy to replicate, at least you must have a competitive edge that differentiates you from the rest. Make sure you have a plan of how to widen the competition gap when similar ideas flood the market.

Personal factors

Once you've found an idea that answers the above questions, it's important that you evaluate yourself as an individual. The success – or failure – of the SaaS idea lies in your capabilities or lack thereof. Establish if you have the following attributes with regards to the industry you've chosen:

  • Skills
  • Experience
  • Affinity

Industry factors

It’s crucial that you research the industry beforehand. You must perform a detailed strengths, weaknesses, opportunities and threats (SWOT) analysis of not just the industry but competitors as well. Here you find out information regarding:

  • Who the top players in that specific industry are
  • The challenges that these companies face
  • Their weaknesses and strengths
  • The business tools these companies use
  • Any improvements that can be made

 Looking into the above-mentioned factors will help you establish if your business idea will indeed provide solutions.

How to validate your startup idea

Coming up with an idea is the first step. But it’s important that you validate your startup idea. Are your potential customers really receptive to the idea? It pays to be proactive by establishing if your idea indeed has a market. Here are a few tips on how to gather such information. 

Meet up with prospective clients

Don't be afraid to approach your prospective customers and pitch your business idea. Make it clear to them that you've discovered a solution to a problem they have. But before speaking to these individuals do your homework. Research intensively 

  • The nature of their business
  • How they run their operations
  • The service or products they offer
  • Any loopholes you have identified in their operations
  • Possible solutions from your SaaS

By engaging directly with potential customers, you can get valuable feedback regarding whether you’re on the right track with your business idea.

Send an email

Emailing potential customers is another option. You won't get in-depth insight compared to the information you receive from a face-to-face conversation, but you'll still get valuable feedback. Make use of email marketing automation software that allows you to reach a wide target audience with just a simple click.

Minimal viable product (or service)

One of the best methods of testing your SaaS idea is to soft launch it with a small version of the main product. Send it to a group of targetted customers and offer them for free. Freemiums are always welcomed by everyone, but most importantly it will help you test drive your SaaS idea in real-time. MVP's success or failure will help you determine whether it's going to be a hit or needs improvement. 

Examples of SaaS startup ideas

Not sure which ideas to run with? Below are a few that are likely to be a success:

  • Freelance web developer
  • Run a website hosting service
  • Ethical hacker
  • Programmer
  • App developer
  • Build cloud-based email apps
  • A text-mining business

Wrapping up

Were the above-mentioned tips useful? Do you believe your SaaS startup idea is what individual consumers – or businesses are looking for?  You'll never know unless you try it out. So, go out there and make your business dream not only a reality – but a success.

Image Credit: nd3000/Shutterstock
Zaheer Dodhia
Zaheer Dodhia Member
Zaheer Dodhia is a serial entrepreneur who has a passion for solving small business and startup problems with affordable branding solutions. His deep understanding of business needs and expertise in graphic design and search engines have motivated him to spearhead several online projects with tremendous success. He’s the mind behind the DIY logo design tool