How to Start a SaaS Company in 2024: 8 Steps

Wondering how to start a SaaS company in 2024? Are you interested in how much does it cost to launch a SaaS business? How much SaaS developers charge in the United States and other regions? What are the initial steps of SaaS application development?

In this article, I will provide a complete 8-step guide on how to start a SaaS company, give you examples of the most successful SaaS businesses in 2024, discuss 5 common mistakes you should avoid when launching a SaaS startup, 3 top websites where to hire SaaS developers for your SaaS business and share 8 steps in SaaS development process.

Let’s get started!

How to Start a SaaS Company in 8 simple steps: 

1. Identify the opportunity and target audience for your SaaS company

2. Define the solution that your SaaS company will provide

3. Analyze whether other SaaS startups offer similar solutions and think about how you will make your SaaS business significantly better

4. Decide on your SaaS pricing model and strategy

5. Hire a software development team for your SaaS company

6. Ensure the selection of an effective technology stack for SaaS solution development

7. Finalize the functionality and features to offer in your SaaS product and plan an MVP

8. Manage the SaaS product lifecycle

The SaaS market is booming. According to Statista, some of the most popular SaaS(Software as a Service) companies include Google Workspace, Google Cloud Marketplace, Amazon Elastic Compute Cloud, Microsoft Cloud, and IBM Cloud Integration. Industries that are leveraging SaaS platforms include finance, education, healthcare, entertainment, hospitality, E-Commerce, and others.

Your SaaS company can be a success, too! Read on, as I’ll share many useful insights on how to start your own SaaS Company.

In this article

1. What is a SaaS company? Main Types and Examples of SaaS Companies
2. Most Successful SaaS Companies and SaaS Trends in 2024
3. How Much Does It Cost to Launch a SaaS Company?
4. How Much Does It Cost to Build a SaaS Company like Netflix, Spotify, or AirBnB?
5. How Much Does It Cost to Hire Developers for a SaaS Company?
6. How to Start a SaaS Company: 8 Simple Steps
7. 5 Common Mistakes to Avoid When Starting a SaaS Company
8. Top 3 Companies Where to Hire Developers to Start a SaaS Company in 2024
9. FAQs on How to Start a SaaS Company

What is a SaaS Company?

Software-as-a-Service (SaaS) is a business model that allows users to connect and use applications (cloud-based) over the internet. Users have access to the service as long as they are subscribed to it. Subscription plans can be free or paid (with monthly or annual fees). Usually, customers access SaaS applications through mobile devices, tablets, or laptops. 

A SaaS company is a business that provides this type of software application to users and fully manages the IT infrastructure. SaaS providers are responsible for maintaining servers and databases, as well as for ensuring that the software is secure and up-to-date. SaaS businesses receive a constant stream of revenue (payments from subscriptions) from their customers (subscribers). SaaS founders often use the services of expert software developers to build SaaS apps and launch SaaS businesses.

Main Types and Examples of SaaS Companies:

Here are examples of some major SaaS categories and leading SaaS solutions in these categories.

• Customer Relationship Management (CRM) SaaS Companies: Salesforce, Zendesk, HubSpot 
• Project Management SaaS Companies: Jira, Trello, monday.com, Asana, ClickUp 
• Team Communication SaaS Companies: Slack, Zoom, Atlassian 
• Enterprise Resource Planning (ERP) SaaS Companies: SAP, Oracle, Microsoft Dynamics 
• Productivity and Collaboration SaaS Companies: Google Workspace, Adobe Creative Cloud, Dropbox
• Financial Management SaaS Companies: Stripe, QuickBooks, Xero
• Marketing SaaS Companies: Semrush, Ahrefs, Mailchimp, Hootsuite
• Ecommerce SaaS Companies: Amazon Prime, Shopify, BigCommerce, WooCommerce
• Healthcare SaaS Companies: CareCloud, Zocdoc, Talkspace, Thrive Global
• Education and E-learning SaaS Companies: Coursera, Blackboard, Kahoot!, Duolingo

In this context, I should also mention two other software delivery models, Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS).

PaaS is a cloud-based development and deployment environment. AWS (Amazon Web Services) Elastic Beanstalk, Google App Engine, and Facebook are some examples of this type of software.

Get a complimentary discovery call and a free ballpark estimate for your project

Get Started

Trusted by 100x of startups and companies like

Yet another model of delivering cloud-computing services is IaaS. It provides compute, network, and storage resources to developers. Some IaaS examples include AWS (Amazon Web Services), Google Compute Engine, and Microsoft Azure.

Simply put, the difference between SaaS, PaaS, and IaaS is like this: SaaS enables you to use cloud-based apps, PaaS lets you develop and deploy apps in the cloud, and IaaS provides you with ‘virtual hardware’, i.e. cloud servers for app storage and virtualization.

Back to Top

Most Successful SaaS Companies and SaaS Trends in 2024

In 2024, there are approximately 17,000 software as a service (SaaS) companies globally and, according to Statista, around 9,100 in the United States alone. The total number of US-based SaaS companies’ customers worldwide exceeds 15 billion users.

In general, an average United States citizen spends $219 per month on subscription services. The average subscriber has 4.5 subscriptions. These can include video and music streaming services (e.g., Netflix, Hulu, Disney+, Apple TV, Apple Music), booking platforms (Airbnb), document and password-management services (DocuSign, LastPass), learning platforms (Duolingo, Kahoot!), eCommerce (Shopify, Amazon Prime), etc.

Convenience is one of the main reasons why subscription services are becoming increasingly popular. Other reasons include the great diversity of SaaS businesses and the possibility to try their products before subscribing to the paid version. In addition, such services offer a higher level of personalization compared to traditional retailers.

On the service provider side, the popularity of the SaaS business model can be explained by the predictability of revenue streams. Once you’ve launched a great Software-as-a-Service product and established long-term relations with customers, you can expect constant growth. You can read our tips for growing your SaaS business’ customer base.

The SaaS market is lucrative. Almost every industry, including education software, healthcare software, finance software, entertainment software, hospitality software, eCommerce software, marketing software, development software, and more, are now turning to the SaaS model.

The top three industries in SaaS by number of companies worldwide in 2024 are AI (artificial intelligence) software (1,600 companies), analytics software (1,400 companies), and finance software (1,300 companies). 

The leading industry for Software-as-a-Service (SaaS) companies is AI (artificial intelligence) software. AI has been there for quite some time, and all of us are familiar with AI tools such as Siri, Alexa, or Google Assistant. However, the most trending AI tool in 2024 is ChatGPT, a revolutionary AI chatbot developed by OpenAI. 

SaaS providers can employ ChatGPT-powered conversation bots to improve their customer care operations, perform data analysis, conduct market research, and more. You can try other AI tools similar to ChatGPT, such as Google’s conversational service Bard, AI search assistant YouChat, or a generative AI tool HuggingChat. Another use case is employing AI algorithms for analyzing user behavior and delivering personalized user experiences to SaaS subscribers. For more insights, read our guide on how to create an AI SaaS product.  

The second leading industry for Software-as-a-Service (SaaS) companies is analytics software. Every business generates huge amounts of data, and leveraging it is essential for making efficient data-driven decisions. SaaS analytics tools like Google Analytics help businesses get valuable insights, perform predictive analysis, monitor operations, and more. Some other examples of analytics software are Adobe Analytics and Userpilot. 

The financial market is harnessing the power of SaaS, too, as reported by Nasdaq in 2024. Fintech SaaS solutions can be used for a variety of purposes, from payment processing and accounting to wealth management and trading. Some of the examples include QuickBooks, an online accounting software, and Stripe, a payment processing service.

Back to Top

How Much Does It Cost to Launch a SaaS Company?

The cost of launching a SaaS company will depend on its complexity. It can be a micro SaaS business designed for a very narrow niche. The cost of building and maintaining a micro SaaS app will be relatively low. Investments in sophisticated SaaS applications with rich functionality, like Slack, will be much higher. 

Anyway, you’ll probably embark upon building a technical prototype (a pre-MVP version of your SaaS product), or an MVP (Minimum Viable Product) to test the waters before going big and offering an enterprise-grade SaaS solution to the market.

So, let’s start with an approximation of your SaaS pre-MVP and MVP costs and then estimate the cost of a full-fledged SaaS product.

SaaS Pre-MVP Cost/ SaaS Pre-MVP development cost

The cost of an early version of a SaaS solution, otherwise referred to as a technical prototype or a pre-MVP stage app ranges from $5,000 to 50,000. Building a pre-MVP will require 1 to 2 months and 1 to 2 developers. 

An example of nice B2B SaaS that falls exactly into this category is a technical prototype of healthcare SaaS that can be licensed to hospitals. This SaaS product is designed to facilitate looking after post-surgery and coma patients by tracking their abnormal movements. The app utilizes Microsoft Kinect (a device to control multi-media apps with gestures) capabilities and is able to detect motion even in the dark. Upon identifying such abnormal movements, the system will automatically call a nurse. 

This healthcare SaaS prototype utilizes computer vision, machine learning, and AI. A project like this will require 1 to 2 software engineers and take about 2 months to complete. It will cost between $20,000 and 40,000 depending on how elaborate the app interface will be as well as on whether you’ll need an admin dashboard added to the software.

SaaS MVP Cost/ SaaS MVP development

The cost of a SaaS MVP will range between $50,000 and 250,000. The time-to-market will depend on the number and complexity of your SaaS platform features and can be anywhere between 3 and 6 months. Depending on if you plan to build a product for web or mobile devices, you may need a team of 3 to 10 software engineers, including frontend developers, backend developers, QA engineers, DevOps engineers, a project manager, and a designer.

A SaaS Minimum Viable Product can be built for mobile platforms, as a website, or both. However, using techs like AI or blockchain in your SaaS MVP will greatly increase your project’s complexity, cost, and timeline. 

Full-featured SaaS App Cost/ SaaS app development cost

The cost of an enterprise-grade SaaS will start from around $250,000. Launching a SaaS product like this can take 6 months or longer. Your development team will likely include 6 or more software engineers, a designer, a DevOps engineer, and QA engineers. 

Enterprise SaaS platforms are very popular across many industries, including EdTech, Ecommerce, finance, and healthcare. You can even build a HIPAA-compliant SaaS product. Once again, using AI or other cutting-edge technologies will definitely push the app cost up.

Remember to add the cost of services of a cloud-computing platform that will be managing the IT infrastructure of your SaaS solution. For instance, if you opt for AWS or Google Cloud Server, your monthly payment will be around $50. This amount will go up as your product and user base grow. Furthermore, if you’ll be using custom AI-powered tools in your SaaS products, your monthly fee can reach thousands of dollars and easily exceed $10,000 per month, even at the MVP stage.

As your SaaS company grows and scales, you might build an in-house data center for this purpose.

Back to Top

How Much Does It Cost to Build a SaaS Company like Netflix, Spotify, or Airbnb?

If you’re wondering how much it costs and how long it takes to start a SaaS business like Netflix, Spotify, or Airbnb, here’s a rough estimation.

Starting a SaaS company like Spotify: The cost of building a basic music player MVP of a similar app for iOS will be from $75,000 to 150,000. The development process will take between 3 and 5 months, depending on what features you would like to have in your music player app.

Starting a SaaS company like Netflix: The cost will be between $100,000 and 250,000 (for building a website), and the process will take 4 to 5 months, depending on the features.

Starting a SaaS business like Airbnb: the cost of building a website will be anywhere between $150,000 and 400,000, and it will take 6 months or more to build it.

Back to Top

How Much Does It Cost to Hire Developers for a SaaS Company?

Costs will depend on where your potential SaaS developer, SaaS engineer, or SaaS development team is based. Here is a price breakdown by geographical region.

Hire SaaS developers in the United States (San Francisco, Denver, Miami):

Costs range widely, and mid-level and senior developers can charge from $55 to $300 per hour or $10,400 to $48,000 per month full-time, depending on whether you hire highly qualified software engineers from a software development company, freelance developers, or in-house specialists. Location is yet another factor that greatly influences costs. Programmers based in big cities like San Francisco or New York are more expensive to hire than those from smaller cities.  

Hiring SaaS developers in Western Europe (Great Britain, Germany, France):

For using the services of mid-level or senior developers from Western Europe, you’ll pay about $45 – $200 per hour, or from $8,000 to $32,000 per month full-time, depending on your hiring source.

Hire SaaS developers in Eastern Europe (Lithuania, Poland, Serbia):

In this part of the world, mid-level and senior developers are paid about $35 – $150 per hour, or from $5,600 to $24,000 per month full-time, depending on the hiring source.

Hiring SaaS engineers in India (Mumbai, Bangalore, Chennai):

Hiring mid-level and senior software developers based in India is the least expensive option. Costs range between $10 and $65 per hour or from $1,600 to $10,400 per month full-time, depending on your hiring source.

The choice is up to you, but if you’re a United States-based startup, I recommend hiring developers from a US-based company. This way, you and your product will be legally protected.

The cost of hiring SaaS developers in the United States by state:

Here are the approximate costs of hiring developers in the United States full-time, in-house (salary per year):

Hire SaaS developers in California (Oakland, San Jose, San Francisco): $104,000-460,000 per year

SaaS developer for hire in Colorado (Denver, Colorado Springs, Aurora): $85,000-277,000 per year

Hiring SaaS developer in Illinois (Chicago, Joliet, Rockford): $85,000-265,000 per year

SaaS Developers for hire in Maryland (Baltimore, Columbia, Germantown): $90,000-225,000 per year

Hire SaaS developers in Massachusetts (Boston, Worcester, Cambridge): $90,000-225,000 per year

Hire expert developers for your next project

62 Expert dev teams,
1,200 top developers

350+ Businesses trusted
us since 2016

Get started now

Hiring SaaS developer in New York (New York, Buffalo, Rochester): $90,000-280,000 per year

Hiring SaaS engineers in Pennsylvania (Philadelphia, Pittsburgh, Allentown): $80,000-220,000 per year

SaaS development in Texas (Austin, Dallas, Houston): $94,000-235,000 per year

Hire a SaaS developer from Washington, D.C.: $90,000-265,000 per year

You can also check software developer salaries here.

Back to Top

How to Start a SaaS Company: 8 Simple Steps

Let’s now dive deeper and see how to start a SaaS business. I’ve broken down the entire process into eight simple steps for your convenience.

Step 1. Identify the opportunity and target audience for your SaaS company

What business problem or opportunity will your SaaS company address? To define this, ask yourself the following questions:

• Whose experience do you want to improve?
• Which problems do they face, alternatively, what is the business opportunity?
• Who bears the maximum impact of the business problem? Alternatively, who will benefit the most if you address the business opportunity?
• What are the current pain points of end-users?
• How will solving this problem or addressing this opportunity help your own SaaS business? Can you make money adequately to meet your strategic objectives?

An IBM guide to business opportunity statements can provide you with more information on identifying potential business opportunities to start a SaaS company.

You also need to gain a deeper understanding of your target market segment. The following questions will help you define potential customers.

• Who are they?
• Where do they live, and where do they work?
• What do your prospective customers need?
• Why might they be your paying customers?

You need to create a buyer persona to answer these questions. A buyer persona is a fictitious person. Business owners need plenty of market research, interviews, and data analysis to create a buyer persona before starting a SaaS company. 

However, if you’re launching a SaaS startup, you don’t necessarily need millions to do the research. You can approach this step in two ways:

1. To start, you can build a SaaS startup that solves your problem. All you need to know is if there are enough people out there with the same problem as yours. 
2. Alternatively, you can talk to, say, 150 potential clients and learn about their problems and how they currently solve them. And then go back to the drawing board to devise a solution. You can then prototype using tools like Figma and test your early SaaS product with potential customers again. It may seem like a lot of work, but it’ll ensure you’re on the right track.

Describe the attributes of this fictitious paying customer with as much detail as you can. Do the following to create a buyer persona:

• Use an established template. HubSpot, the renowned provider of marketing, sales, customer service, and CRM (customer relationship management) software, provides a useful template.
• Enter the basic demographic data.
• Provide the insights that you have gathered about the buyer persona. These include their objectives, business problems, etc.
• Assist the sales team of your company so that they can have meaningful conversations with potential customers.
• Create appropriate messaging for the buyer persona.

HubSpot offers a guide to creating a buyer persona, which you can refer to.

Back to Top

Step 2. Define the solution that your SaaS startup will provide

To define the solution that your SaaS company will provide, you need to think from the perspective of potential customers. Analyze what they need and craft your SaaS solution around that. You need to ask several questions, e.g.:

• Which key functionality will you offer in your SaaS product?
• How will you offer your SaaS product? Should you offer a mobile app along with a web app?
• After you onboard new customers, how will they use your SaaS application?
• Which information security standards and regulations should your SaaS application comply with?
• How will you offer customer support?

Step 3. Analyze whether other SaaS startups offer similar solutions and think how you will make your SaaS significantly better

To understand if other SaaS startups offer similar solutions and come up with a better SaaS product, you need to research your business idea. You will likely use tools like market research. Include competitor research in the scope. Ask key questions, e.g.:

• Are there SaaS startups already addressing this business problem or opportunity?
• What do these SaaS startups offer to customers?
• Which business model have they adopted?
• How successful are your competitors?
• What are their strengths and weaknesses?

Check out the HubSpot guide to competitive analysis for more insights.

Do you plan to offer what other SaaS startups are already providing?

That could make customer acquisition harder for you. That’s especially true if your competitors are already established in this space.

The key to this puzzle lies in offering outstanding features. It’s fine to enter the market with a solution similar to existing ones. However, make sure that, compared to competing solutions, your SaaS product provides more value. 

You need to go back to the drawing board so that you can find differentiating features. You can read our article about the dominating SaaS trends. 

Step 4. Decide on your SaaS pricing model and strategy/ SaaS pricing

You need to explore SaaS pricing models and choose the best for your own SaaS startup. The common SaaS pricing models are as follows:

• Freemium;
• Flat-rate pricing;
• “Pay-as-you-go” or usage-based pricing;
• Tiered pricing;
• Per-user pricing;
• Per-active user pricing;
• Per-feature pricing;
• Subscription-based pricing model.

You need to choose a pricing strategy for your SaaS products. The commonly available strategies are as follows:

• Cost-plus pricing: You calculate costs. Subsequently, you add a profit margin to arrive at the price. This ensures that you get a profit. However, this strategy might not reflect the true value of your SaaS product.
• Competitor-based pricing: You study what your competitors did. You set up the price that your customers pay based on that. This strategy is helpful when you don’t have a benchmark to refer to. However, it might not reflect the value proposition of your SaaS app.
• Value-based pricing: You conduct extensive research and competitive analysis to arrive at a price that truly reflects the value you offer. As a part of this, you get direct inputs from customers. Implementing this pricing strategy can be hard.

For more insights, refer to our tips for selling SaaS products and to the Baremetrics guide to creating a SaaS marketing plan.

Back to Top

Step 5. Hire a software development team for your SaaS company

The development team for your SaaS company will be led by a project manager (PM). The PM should have experience leading a SaaS development team. You need a software architect in this team, furthermore, you need a few business analysts (BAs). Along with these experts, you’ll need to hire competent professionals for the following roles:

• UI (user interface) designers;
• Web developers;
• Native Android developers;
• Native iOS developers;
• Testers;
• DevOps engineers.

Hire competent people for these key roles from a trustworthy SaaS software development company. 

At the initial stage, the development team should do the following:

• The PM should initiate, define, and plan the SaaS development project. You should expect the PM to create a project plan. I recommend that the PM uses the Scrum framework. It helps to manage “Agile” development projects, and programmers develop a product in iterations. We call these iterations “Sprints”.
• BAs should gather and document the functional requirements.
• The software architect should define the non-functional requirements (NFRs) like scalability, performance, security, etc.
• You need the software architect to define the technical solution.
• The PM needs to implement a structured review of the requirements and technical solutions.

You’ll also need to sign up for a cloud platform to run your SaaS. Cloud computing technology can help you so that you don’t need to manage IT infrastructure. You can choose a Managed Cloud Services Provider (MCSP) like AWS, Google Cloud Platform, Microsoft Azure, etc. Your PM and software architect should choose the right kind of cloud platform for your SaaS startup. They have the following options:

• IaaS (Infrastructure-as-a-Service): The MCSP manages the cloud infrastructure only. Your development team needs to do the rest.
• PaaS (Platform-as-a-Service): MCSPs manage the cloud infrastructure, operating system, middleware, and runtime environment. PaaS platforms provide services like databases, API integration, DevOps tools, etc. Your development team brings the code and data.
• MBaaS (Mobile-Backend-as-a-Service): MCSPs manage the cloud infrastructure and persistent storage. An MBaaS platform reduces the mobile back-end development and management work for your application development team.

Read more about SaaS architecture in our article. 

Designing an effective user interface for your SaaS app is highly important. When you conceptualized your SaaS product, you might have created wireframes. You might have thought about the landing page and other design parameters. 

The BAs in your SaaS development team should have captured these inputs during the requirements management process.

Your UI design team should now create effective user interfaces for the web and mobile SaaS apps. The project manager should monitor this process.

You need to keep a tab on it. The software architect needs to ensure that the UI design follows appropriate guidelines, e.g.:

• “Material Design” guidelines for the Android app;
• “Human Interface Guidelines” for the iOS app.

Back to Top

Step 6. Ensure the selection of an effective technology stack for SaaS solution development

You should expect the software architect to choose an effective technology stack for your SaaS solution. I recommend the following:

A. Front-end web development/ SaaS product development

Your development team should use JavaScript. This open-source programming language is versatile, and programmers can take advantage of the large JavaScript ecosystem.

Your development team can create the front end using JavaScript, HTML, and CSS. Alternatively, they can use open-source web frameworks like Angular and React.js.

B. Back-end web development/ SaaS product development

I recommend your SaaS development team uses Node.js for developing the backend of your SaaS app. This open-source runtime environment for JavaScript helps to develop scalable and performant SaaS web apps.

You can find Node.js developers easily since many JavaScript developers know it. A vibrant developers’ community has created many open-source Node.js development tools. So your developers can gain productivity by using them.

C. Native Android development/ SaaS product development

Your SaaS development team should develop the native Android app using Java. This popular, performant, and secure programming language has been a mainstay for Android development for a long time. Many developers know it, and Java has a great ecosystem of tools.

D. Native iOS development/ SaaS product development

I recommend your SaaS development team use Swift for native iOS development. Apple prefers this modern language since it offers powerful features.

Hire expert developers for your next project

Trusted by

Get started Now

Your SaaS development team can gain productivity by using Swift; furthermore, the language offers great performance. It enables software engineers to avoid many common programming errors.

E. API development/ SaaS product development

I suggest that your SaaS development team develops RESTful APIs. REST (Representational State Transfer) is the de-facto standard for API development, and many developers know it.

F. Databases

Your development team should use MySQL or PostgreSQL if it needs an RDBMS (Relational Database Management System). These 2 SQL databases offer powerful features, and many developers know them.

I recommend your SaaS development team use MongoDB or Apache Cassandra if there’s a need for a NoSQL database. These open-source NoSQL databases are scalable and performant.

Note: Your SaaS product development roadmap might include milestones where you will offer cutting-edge capabilities. Intelligent automation powered by Artificial Intelligence (AI) and Machine Learning (ML) is an example. 

Your software architect should recommend the right technology stack for such high-end capabilities. E.g., Python is a great programming language to develop AI and ML software.

Back to Top

Step 7. Finalize the functionality and features to offer in your SaaS product and plan an MVP

You have defined your SaaS solution at a high level. Therefore, you can now finalize the functionality that you will offer. Please note that this can be done before or after hiring a development team (if you have difficulties with deciding on features for your MVP, you can go for the second option).

BAs (business analysts) in your SaaS development team need to work on gathering the requirements.They need to engage end-users in detailed conversations. Often, they need to take structured interviews. BAs might need to have dedicated brainstorming sessions with the business stakeholders.

Business analysts need to write the project specifications effectively. The software architect needs to ensure a thorough review of the requirements. 

The PM needs to get formal requirements approval from the business stakeholders, furthermore, the PM needs to implement a requirements management process.

Now that you have a finalized list of features for your SaaS product, you need to validate your business idea. You need to get market feedback.

Your customers need to use a functional SaaS product to provide that valuable feedback. The product can have fewer features than the final version; however, it should work. That’s an MVP.

One of the focal issues is implementing a robust information security solution as your SaaS product might process sensitive data. I recommend the software architect focus on the following areas:

• Multi-factor authentication (MFA);
• Data encryption;
• Incorporating an antivirus solution;
• Implementing a next-generation firewall;
• Securing APIs;
• Mitigating the top application security vulnerabilities proactively;
• Proactive security and compliance testing.

Step 8. Manage the SaaS product lifecycle

Congratulations! You’ve launched your SaaS product. Has it achieved a broad product-market fit, though? Monitor the following product management KPIs to measure success and assess this:

• Customer satisfaction (CSAT);
• Customer retention rate;
• Customer churn;
• Conversion rate;
• Customer lifetime value;
• Customer acquisition costs (CAC);
• The number of customer support tickets;
• “Daily Active Users” (DAUs) and “Monthly Active Users” (MAUs);
• Stickiness;
• Session duration;
• Bounce rate;
• Monthly recurring revenue (MRR);
• The average revenue per user (ARPU);
• Net promoter score (NPS).

For more information, read our article about SaaS KPIs you need to track.

Back to Top

5 Common Mistakes to Avoid When Starting a SaaS Company

Starting a SaaS company is not a piece of cake and can require a lot of resources in terms of finance, time, and manpower. To get your SaaS business right, make sure to avoid the following common mistakes.

1. Lack of SaaS Market Research 

To enter and win a slice of the highly competitive SaaS market, you need to offer an innovative and future-proof product, which cannot be attained without conducting a thorough market analysis. Make sure to thoroughly explore the business problem or opportunity, as well as your target audience as this is a prerequisite for building a great SaaS company. If you don’t understand the problem well enough, your SaaS product might fail to win the market.

Note that even if your SaaS solution will not become a game changer in the industry, it should differ from what already exists and solve user pains that have not yet been addressed. In fact, I’ve covered it in Steps 1-3.

2. Poor Marketing Strategy for Your SaaS Product

You might have a great SaaS application, but it won’t bring you any profit if nobody knows about it. Plan and build a good marketing campaign before launching your SaaS platform.

Your marketing strategy will depend on the industry or market you are targeting. It will depend on the kind of SaaS app you plan to build. You need to think through several aspects, e.g., specific content marketing tools, creating case studies, and metrics to use.

For insights, refer to our tips for selling SaaS products and to the Baremetrics guide to creating a SaaS marketing plan.

3. Your SaaS Product Price is Too Low Compared to Competitors

Your desire to attract customers by reducing entry barriers is natural, but it can potentially lead to several problems in the future. 

First and most obvious, you’ll get less money than you’d otherwise invest in growing your SaaS business. The second problem stems from the first one: you’ll eventually want to raise prices, which certainly will not make your customers happy. 

Third, lower prices might affect the perception of the quality of your SaaS products. Users might think that your competitors’ solutions are better because they are more expensive. Monitor the market leaders within your niche and adjust your pricing strategy accordingly.

4. Not Considering Your First Customers’ Feedback

Don’t underestimate the value of your Software-as-a-Service early adopters. You can use reviews of your newly launched software product as a proxy for what users are expecting to find in your app. Moreover, your first customers will be the backbone of your SaaS business — through word of mouth and referrals.

5. Lack of Continuous SaaS Product Improvement

You’ve launched a successful SaaS company and are seeing robust growth. To keep things this way, you need to ensure your SaaS product is up-do-date in terms of its features and design. Supporting a successful SaaS startup is a constant effort, and there is no way you would survive the competition without regular updates with the latest tech and innovation.

Back to Top

Top 3 Companies Where to Hire Developers to Start a SaaS Company in 2024

1. DevTeam.Space – an American software development company

DevTeam.Space is a United States-based software development company with a 99% project success rate. It’s a vetted community of over 60 expert app development teams and 1,200 software engineers. The developers are located in the United States, Europe, and Canada and follow an AI-powered Agile process.

At DevTeam.Space, you can hire experienced SaaS developers from expert development teams or an entire dedicated development team. 

If your SaaS project budget is not big and does not exceed $5,000, you can hire freelance developers instead of outsourcing your project. Be prepared, however, to spend more time on interviewing candidates and take risks associated with hiring not full-time developers. Furthermore, hiring platforms do not usually provide project management support, which means you’ll have to manage programmers yourself. 

Here are two examples of hiring platforms:

2. Freelancer – freelance marketplace website

Freelancer claims to be the world’s largest freelance marketplace. There are 2,700 job categories, including those related to software development. To find a SaaS developer, you need to post a job, interview candidates, and choose a perfect match for your project. You pay when the work is complete.     

3. Upwork – an American freelancing platform

UpWork is a large general-skill platform that offers candidates from virtually any field, including software engineering. You can try this option to outsource software development for your SaaS startup.

Back to Top

FAQs on How to Start a SaaS Company

Back to Top

Related SaaS Product Development Articles

Learn more about SaaS product development from our expert articles:

1. What are SaaS Product Examples You Need to Know?
2. How to Build a SaaS Product
3. SaaS Development Guide for Founders
4. What are the Differences between SaaS vs On-Premises Solutions?
5. What is SaaS Architecture
6. Building Scalable Backend Architecture for SaaS Application
7. What are the Principles for SaaS Design?
8. SaaS Website Redesign for Doubling Your Revenue
9. How to Build Your SaaS Pricing Model
10. Smart SaaS Pricing Models and Strategies
11. How to Build Great SaaS Marketing Strategy?
12. Selling SaaS Products: 10 Tips to Grow Your Customer Base
13. Which SaaS KPIs You Should Be Tracking?
14. Why SaaS Trends Will Dominate In 2024?
15. What are the Best SaaS Analytics Tools for 2024?