If you are reading this article, you are probably thinking about creating your own SaaS (Software as a Service) product. No wonder: the majority of applications used for business, entertainment, and routine tasks are now sold as a service. Business owners and individual consumers now prefer to pay for applications they use on a subscription basis.

SaaS applications offer a bunch of undisputable benefits for both providers and users: flexibility, accessibility, transparent pricing, and others.

So, how to develop a SaaS application? Where should you start from? How to increase your chances for success in the crowded SaaS market? In this article, you can find a step-by-step guide on how to create your own SaaS startup from scratch.

SaaS Software Development Process: What Are The Key Steps?

There are a lot of approaches to SaaS development; each of them is suitable for different scenarios and has its pros and cons. In the following guide, we will talk about the most important steps that encompass the SaaS software development life cycle.

Step 1: Start From The Discovery Phase

When you only start questioning “How to build a SaaS website?”, you already know that you should start with planning. Well, the discovery phase is planning with practical outcomes – not just a plan, but also all the necessary documentation and estimations.

During the discovery phase, you should find answers to the following questions:

What goals do you want to achieve with your product?

What problem is your product going to solve?

Who is your target customer?

Who are your competitors?

Roughly speaking, at this stage, you need to think about who you are building the product for, not how to build it.

You as a product owner are the one who decides on the discovery phase deliverables – outcomes, needed for your project development. There are dozens of them. Some of them are quite obvious: development plan, SaaS software development team composition, product roadmap, and project time & cost estimates. The other ones can be divided into such groups:

Business side. Deliverables from this group include SWOT (strengths, weaknesses, opportunities, and threats) analysis, SRS (software requirements specification) document, business requirements document, use case scenarios, etc.

UI/UX design. Talking about design, at this stage, you may decide to develop several wireframes and prepare a base for future design elaboration.

Technical side. Tech stack for your product’s development, risk register, architecture, and third-party integration decisions are some of the technical questions that need to be solved during the discovery phase.

Testing. Before the development process starts, you need to create a testing plan.

With these deliverables in hand, you are ready to proceed with the SaaS software development process itself.

Step 2: Elaborate UI/UX Design of Your SaaS Application

When it comes to SaaS products, design can be a challenge. SaaS applications must be adapted to both web and mobile versions, and be user-friendly and intuitive. Users shouldn’t feel limited when using your application.

In the realm of software development, UI (user interface) and UX (user experience) are two closely related concepts that frequently get confused with each other. However, there is a significant difference between them.

• UI refers to the graphical layout of an application that includes such elements as icons, buttons, images, etc.
• UX, on the other hand, encompasses all aspects of the user’s interaction with a product, focusing on the overall experience of the user, including usability, accessibility, and satisfaction.

During the UI/UX design stage of the product development process, your designer needs to focus on these two aspects. As the outcome, you should get an interactive prototype, approved by all stakeholders and your SaaS software development team.

The UI/UX designer and front-end developer within your team should work together to develop a user interface according to requirements. While the designer should make sure that the interface is convenient, the front-end developer should ensure that it’s technically feasible.

The wireframes, developed during the discovery phase, need to become more detailed and realistic. The designer can develop one or several prototypes – it will depend on the complexity of your project. Prototyping allows for small and cheap experiments with possible design solutions. If you skip this stage and find out that the ready-made design doesn’t look and work as expected, you will have to waste extra time and money to fix it.

Step 3. Develop The MVP

As you conduct the discovery phase, and have all the necessary documentation and approved design prototypes ready, you can proceed to the MVP development stage. MVP, or minimum viable product, is a version of a product with a basic set of features, enough to be estimated by first consumers.

Why not develop a full-fledged SaaS product? There are a few reasons why you should consider starting with an MVP.

1. Faster time to market. Developing an MVP allows you to launch your SaaS product sooner (from two to several months, as usual), enabling you to start generating revenue earlier than if you were to build a fully-featured product.
2. Cost-effectiveness. By focusing on the core features, the SaaS software development costs will be lower as you avoid investing resources in unnecessary features or functionalities that have a high chance of not working for your audience.
3. Real user feedback. Starting from MVP enables you to collect valuable feedback from real users, allowing you to understand their preferences, pain points, and desires. This feedback can then improve your product, ensuring that subsequent versions meet user needs better.

Launching a full-featured product implies relying on predictions and assumptions that can never be 100% precise. Meanwhile, MVP allows you to establish the development of your SaaS product as an iterative process. In the subsequent iterations, you will be making only those changes and upgrades that your audience demands, spending your resources wisely.

Three key factors should be taken into account when developing a SaaS product MVP:

Feature Prioritization

You need to consider which features are the most important for your product. For example, if you are developing a project management SaaS service, such features as task creation, assignment, and basic progress tracking are more important for an MVP than integrations with dozens of third-party tools or complex reporting features. The cost of SaaS software development will be lower if you don’t focus on features that don’t have proven value. 

Pricing Strategy

Choosing the way you will bill your users is extremely important when it comes to as-a-service products. You should assure your users that they pay for real value and don’t spend their money in vain. MVP development is also a good way to test this or that pricing strategy and find out how you should change it if something doesn’t work as expected. You can charge users for the set of features they use, offering several pricing tiers, for how many resources they consume, or offer an all-in-one pack for a fixed price – everything depends on the specifics of your product. 

Cloud Provider

The vast majority of SaaS products are hosted in the cloud (those that aren’t are usually old on-premise products that switched to the SaaS model). That is why SaaS is frequently considered a subset of cloud computing. So, if you are going to build a cloud-based SaaS application, You need to choose a cloud provider. As of 2023, there are three major cloud providers that take leadership in the market: AWS (Amazon Web Services), Microsoft Azure, and Google Cloud. They have proven experience and authority, so we recommend relying on one of them. Based on the specifics of your product and the budget you possess, you can choose the most suitable partner to host your SaaS application.

Step 4: Continue Improving Your SaaS Application

As you launch an MVP of your product, you can establish a feedback loop to measure your success and find ways for improvement. You should measure such metrics as user engagement that demonstrate user interest in your product, metrics that demonstrate user satisfaction, customer churn rate, financial metrics, cost to acquire a customer, customer lifetime value, and others.

The launch of the first version of your product is not where your path ends, it is where it starts. You will have to start from the discovery phase again, but this time, you will work with real user feedback, knowing exactly which features should be added, and which should be removed. As a result, each next version of a product will be fuller and more valuable for users.

Conclusion

Creating your own SaaS application may seem like a very difficult task; however, if you start with a proper approach to the development process, the results may be even better than you expected.

So, how to build a SaaS application?

You can gather your own SaaS development team (or delegate this project to your existing in-house team) or turn to the services of an experienced SaaS development company. Everything depends on the resources you currently have, your business goals, and your own experience in the SaaS field.