27th July 2021
Know your metrics: A guide to measuring the health of your start-up
Despite the turbulent economic forecasts following the pandemic, 25% of IPOs were made to SaaS companies last year, with the sector going from strength to strength in spite of the past 18 months.
Venturing into such a competitive market can be intimidating, especially as the majority of SaaS products are launched off the back of an individual’s own tireless work ethic. So if you’re looking for some pointers to get you started on your journey from that initial idea to your own ‘unicorn’ IPO, we’ve put together a handy checklist for your consideration.
If you’re a SaaS founder with a limited technical background, you’re going to want to do your research on the nuts and bolts that are going to hold your product together.
Even a surface-level understanding will serve you well in dealing with software developers, be it outsourced or in-house, who will eventually be building your product.
Most independent SaaS start-ups tend to have no more than 4 or 5 full-time employees. You’ll be leaning heavily on your developer(s) each day for their insights along the road, and managing that relationship will be key to future success.
Finding the right person for the job will be made a lot easier if you have at least a general understanding of what you want them to do for you and your product, and you’ll want to make sure that their portfolio offers proof that their experience and skill set aligns with the needs of your business.
Any personal connections you may have here could prove invaluable, so even is it’s just to cross reference a prospective CV, there’s never been a better time to get in touch with an old friend who happens to be a software engineer!
SaaS start-ups are particularly prone to inertia brought on by a failure to stick to clear deadlines in the run-up to launching their MVP – this is one of the key pitfalls that you, as a SaaS founder, will want to avoid.
Whilst there’s no magic checklist for guaranteed success, one thing you can be sure of is that the quicker you can get your MVP out there in the real world, the more likely it is that your idea will one day challenge competitors on the market.
Iteration is the key feature in SaaS development. Anyone who has ever used even the most basic software for any prolonged period will be aware of how updates to that software are deployed over time, adding new features and responding to user feedback.
This is where a drive for perfection can cripple a prospective venture. Your MVP won’t be perfect, but getting something out there for users to respond to will pay dividends in the long run. Make no mistake – there are plenty of technical challenges lying in wait, and the sooner you encounter them, the less impact they’ll have on your eventual release pipeline.
Finding your product-market fit is not a unique problem to SaaS companies – it’s arguably a business fundamental that’s as old as the trade itself. Received wisdom will tell you that this is always your starting point, and that there is no use going any further until you have this stage nailed. However, there’s an argument to be made that there are no ‘golden rules’ in launching a SaaS enterprise, and the nature of the SaaS development cycle means that you may not find your PMF until your product has already seen a number of iterations.
This is why getting your MVP off the ground and tested is so important – because there’s a good chance that the feedback you’ll get will lead you to your PMF quicker than any amount of pre-launch planning ever could.
A key part in planning the development of your SaaS product is to give yourself and your team time to implement the changes that will inevitably be suggested by customer feedback as your product is rolled out. It can definitely be frustrating to have your schedule knocked back by several weeks or even months, but the alternative – ignoring warning signs and ploughing on regardless – is guaranteed to come back to haunt you.
Your user base will be more forgiving if they can see their complaints being addressed in a timely fashion, and will be more receptive to a reliable if limited set of features as opposed to an ambitious but bug-riddled app or platform.
Recent surveys of the SaaS founder community suggest that a sizeable percentage of prospective SaaS founders have between 10-29 hours to work on their product, presumably split between working another part time job to support themselves whilst they develop their ideas.
With this in mind, it’s important that you scale your project’s timeframes to keep your goals achievable, and avoid a potential burnout before you’ve even launched your first MVP.
Recent surveys of the SaaS business landscape have highlighted some key developments that founders should be aware of. Whilst you probably won’t be able to act on many of these points from the get-go, it’s definitely worth having them in the back of your mind as you move forwards –
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