Kris Marszałek
Chief Sales Officer
Ross Krawczyk
Reviewed by a tech expert

You don't need any other guides to SaaS development

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It all starts with a bright idea. A vision and a burning desire to offer something new and exciting to the world. It can also be a purely commercial interest, finding and wanting to fill a niche, and that’s fine too, although it won’t look as good in the screenplay once you make it big, and they’ll want to shoot a movie about you. In any case, SaaS development starts small but on the other end of it – sky’s the limit. Modern technology allows for so much that it’s bound by budget, time, and human creativity more than anything else. If you happen to harbor an idea that you’d like to convert into a digital cloud-based product, you’ve come to the right place. Let’s talk about SaaS application development, step by step.

Now, once you have that spark of inspiration, it's time to turn the idea into a tangible SaaS product. The journey from concept to fully functional software may seem daunting, but with the right approach and expertise, it can be an exhilarating and rewarding experience.

SaaS app development is a multi-faceted process that requires careful planning, strategic decision-making, and collaboration between business visionaries and skilled developers. Let's dive into the process to unravel the complexities and provide you with insights and guidance to transform your idea into a market-ready solution.

What is SaaS application development?

SaaS app development encompasses the creation and deployment of cloud-based software applications, accessible to users through the internet or a dedicated client interface.

It entails designing, developing, testing, and maintaining software solutions delivered as a service. This innovative business model presents numerous benefits such as scalability, flexibility, seamless updates, and decreased maintenance expenses for both providers and users.

There are several types of SaaS software, including customer relationship management (CRM) systems, project management tools, human resources management (HRM) platforms, accounting and finance software, collaboration and communication solutions, e-commerce platforms, and enterprise resource planning (ERP) systems.

Each type caters to specific business needs, allowing companies to stay flexible, streamline their operations, enhance productivity, and drive business growth.

On top of that, there's also a whole slew of SaaS software aimed at non-business users, ranging from productivity tools for personal organization and task management to entertainment and leisure applications, providing convenient and accessible solutions for various purposes, such as note-taking, photo editing, fitness tracking, music streaming, and more.

Why SaaS is one of the best business models for startups

According to Gartner for High Tech, “Cloud computing will continue to be a bastion of safety and innovation, supporting growth during uncertain times due to its agile, elastic and scalable nature".

Growing demand

In the same report, they project worldwide end-user spending on SaaS to be 195,208 million USD, which is an increase of 48,882 million USD, or 16.8%, from 2021.

This shows that the high demand for software as a service isn’t going anywhere. That said, a robust market isn’t the only reason why you may want to go for the SaaS business model.

Recurring revenue

Another one is recurring revenue. Having a SaaS product, you get a steady stream of income which improves business stability and its long-term profitability. Not only are you setting yourself up for a relatively fast return on investment but also ensure that it'll keep the cash pouring in.


Next up among the reasons why you should consider SaaS is scalability and spending-efficiency of the model. These businesses can expand rapidly without incurring significant infrastructure or operational costs. Being able to proficiently serve a large number of customers, SaaS companies can achieve high-profit margins and attractive ROI.

Lower upfront cost

At the same time, SaaS companies usually have lower barriers to entry and lower upfront costs compared to traditional software businesses. This reduces the financial risk associated with product development and market penetration, making SaaS a more favorable investment option.

Rapid business expansion

Yet another reason to consider SaaS for your startup is that these products can be easily distributed and accessed globally, allowing companies to reach a broad customer base. Investing in this model provides an opportunity to participate in the global software market and potentially expand into new regions.

Being digitally oriented, SaaS companies are known for their focus on innovation and providing regular software updates to meet customer needs. By venturing into SaaS, you align yourself with a sector that embraces technological advancements, ensuring your investment stays competitive in an ever-evolving market.

Attractive exit opportunities

Finally, there are attractive exit opportunities. The SaaS industry has seen a significant number of successful acquisitions and IPOs, providing investors with a chance to secure a major payoff for all the effort they’ve put into growing their businesses. Once that happens, it’s time to enjoy yourself or perhaps move on to bringing another intriguing idea to life.

Source: OpenVC

How to build a SaaS product in 11 steps?

As you can see, there’s a number of solid reasons for why you should consider adopting the SaaS model for your startup. In this section, we'll go through the 11 essential steps to bring your SaaS idea to life and help your startup thrive in the digital realm. Whether you're motivated by the potential for scalability, securing recurring revenue, or the ability to solve specific customer pain points, the SaaS model holds immense promise for your business. Let's look at the roadmap to creating a remarkable SaaS product that will captivate users and drive your organization's success.

Step 1: Idea generation and validation

SaaS application development starts with a brilliant concept. Ideally, it should identify a problem worth solving or an untapped opportunity in the market – an issue not previously addressed. Engage with potential customers, experts, and stakeholders to understand their pain points and aspirations.

By listening to your target audience and gathering insights, you can refine your design to address their specific needs. Remember that the key to success is to solve a real problem and create value. So, invest time and effort in brainstorming, researching, and validating your idea to lay a solid foundation for the exciting journey ahead.

One of the methods for idea validation that might come exceptionally useful is called Fake Door MVP. You might want to look into that.

Step 2: Market research and competitor analysis

Before diving headfirst into building your SaaS product, it's crucial to conduct thorough market research and competitor analysis. This step involves immersing yourself in the industry landscape and gaining a deep understanding of your target market, its dynamics, and trends.

Familiarize yourself with competitors' offerings through product analysis, studying their strengths, weaknesses, and unique selling propositions.

This research will not only help you validate your product's viability, uncover opportunities for differentiation and innovation, but also avoid failure. By grasping the market landscape and gaining insights into your competition, you'll be equipped with valuable knowledge to form your product strategy and positioning. We’ve discussed 7 lessons to learn from Uber’s failure in China not so long ago.

Step 3: Decide whether to build in-house or partner up with a SaaS development company

Now comes a critical decision: should you start SaaS platform development in-house, utilizing the means and manpower at your disposal, or team up with a SaaS application development company?

Both options have their merits. Building in-house gives you control and flexibility, leveraging your team's expertise. However, partnering with an agency brings external knowledge, specialized skills, and a streamlined development process.

Take factors like budget, timeline, and scalability into consideration and choose the approach that fits best with your needs. Whichever option you'll go with, prioritize collaboration, clear communication, and a shared vision for your SaaS business.

Step 4: Decide on the project scope

Defining the project scope is a crucial step in SaaS application development. To get going, clearly outline the features, functionalities, and goals you want to achieve. Then, consider the needs and expectations of your target audience, market trends, and the resources at your disposal. Finally, break down the project into manageable tasks and prioritize them based on their importance and impact.

This will help you establish a realistic timeline, allocate resources efficiently, and ensure that the entire process stays focused and on track. Keep in mind that a well-defined project scope is the cornerstone of a successful SaaS software development.

In case this is your first time trying to tackle this important step, or maybe you’d just like additional insights from experts on our team, consider booking a product workshop with us, aimed at mitigating many of the risks involved in SaaS product development. For the more independent entrepreneurs, we have a comprehensive ebook on building products that sell, so feel free to grab a copy of it to level up your efforts.

Step 5: Break it down into core features and prioritize milestones

In this step, you'll take up the task of determining the core features of your SaaS product and prioritizing the milestones for development. Figure out the key functionalities that are essential for your app's success and align them with your target audience's needs. Consider the value each feature brings and the impact it will have on the user experience.

Breaking down the SaaS application development process into milestones allows you to set achievable goals and achieve faster time to market (TTM) The milestones should be prioritized based on their importance, feasibility, and potential impact on your product's value proposition.

Step 6: Create and test your clickable wireframe

Alright, things are getting serious. It's time to bring your product to life by creating a clickable wireframe which is a visual representation of your product's interface and functionality. It allows you to simulate user interactions and gather feedback early on.

Source: InVision

Start off by sketching the layout and key screens, then use prototyping tools to transform them into interactive mockups. Test each element for functionality, usability, and gather feedback. This iterative process refines your product's design before the actual development commences.

At RST Software, we turn to the industry-standard Figma and recommend you make it a part of your toolbox too.

Step 7: Proceed with product design before building your MVP

Product design plays a crucial role in creating a visually appealing and user-friendly SaaS solution. It involves translating your ideas and requirements into a well-designed user interface that reflects your brand identity and resonates with your target audience.

Collaborating with experienced designers, you'll focus on crafting intuitive layouts, selecting appropriate color schemes, and designing engaging visuals. A thoughtful product design ensures that users can navigate seamlessly through your software, easily access its features, and have a positive user experience.

Step 8: Kick-off the MVP development process

Once the product design is done, it's time to kick-start the Minimum Viable Product development process. The MVP serves as an initial version of your SaaS product, focusing on core functionalities and essential features.

Building an MVP allows you to validate your idea, gather user feedback, and iterate based on real-world usage. Working with a skilled development team, you'll translate your product design into functional code, leveraging technologies and frameworks that agree with your project requirements.

The development process involves coding, testing, and refining your software to ensure its stability, performance, and usability. By following an iterative approach, you can gradually enhance and expand your product based on user feedback and market demand.

Step 9: Start testing your product mid-development

By starting testing during development, you can ensure that your product functions properly, delivers a great user experience, and performs well.

Run various types of evaluations, including functional, usability, performance, and security tests, to identify any issues, gather feedback, and make necessary refinements. Testing is an ongoing process that helps you refine your product and address any potential problems before the final release, ensuring a robust and reliable application is ready for your users.

Step 10: Launch your MVP and start collecting user feedback

Once rigorous development and testing is done, it's time to release your MVP into the market. Launching it allows you to gather valuable user feedback, insights, and real-world usage data.

Encourage users to provide feedback through surveys, feedback forms, or direct communication channels. This information will be invaluable in understanding user needs, identifying areas for improvement, and shaping your product roadmap. Use this opportunity to engage with your early adopters, address their concerns, and iterate on your product based on their feedback.

Step 11: Plan the next stage of development and iterate

As you gather user feedback and insights from the MVP launch, it's time to plan the next stage in your SaaS app development process. Analyze the information received, identify common patterns or suggestions, and prioritize the areas that require improvement or new features.

This iterative approach allows you to improve and enhance your product based on real user experiences and needs. Work with your development team to create a roadmap that outlines the next set of features, enhancements, and updates. Consider the feedback from users, market trends, and your overall business goals when planning the next stage.

Break down the development process into manageable sprints, ensuring steady and efficient scaling of your startup. Continuously iterate on your product, delivering value with each stage and incorporating user feedback to drive meaningful improvements.

The required team and tech stack to build a SaaS product

The 11-step plan just laid out should give you a good understanding of how to build a SaaS product. Knowing what to do is only a part of making it happen, though. In order to see your concept through, you’ll need a talented team and a tech stack to match that will turn your vision into reality.

Key specialists may include a product manager to lead the overall development process, software engineers to handle the technical implementation, UX/UI designers to create a seamless user experience, and a QA engineer to ensure product quality.

In terms of technology, your stack will depend on your specific requirements.

If we had to recommend something specific, we’d go for Node.js for your backend, React for the frontend of a web-based platform, React Native for mobile apps development, due to its cross-platform capabilities and AWS to power your cloud services.

SaaS product development challenges you might face

Prevention trumps treatment. Before you begin the development of your SaaS product, understand and prepare for some of the challenges you may encounter along the way.

Challenge 1: Integration of third-party services

One of the key challenges in SaaS product development is seamlessly integrating third-party services. You're looking at things like various APIs, ensuring compatibility, and maintaining reliable connections with external systems. Smooth integration requires careful planning, thorough testing, and continuous monitoring which ensure the provision of a cohesive and efficient user experience.

Challenge 2: Secure and GDPR-compliant database

Another important challenge you may face is implementing robust security measures, encryption, and access controls to help protect sensitive user data. Complying with GDPR regulations (if you plan to operate in Europe) and CCPA (if you plan to operate in the US) requires understanding and applying information protection principles, user consent mechanisms, and secure data storage, encryption, as well as handling practices.

Challenge 3: No-downtime deployment

Ensuring continuous availability of the software during updates and new feature releases requires careful planning and implementation of techniques like rolling deployments, load balancing, and zero-downtime deployment. These aim to minimize service disruptions and maintain seamless user experience. Rigorous testing, monitoring, and automation are essential to mitigate risks and ensure smooth transitions without impacting user accessibility.

Challenge 4: Management of the subscription lifecycle

Managing the subscription lifecycle being the bread and butter of the SaaS pricing model involves billing cycles, upgrades, cancellations, and renewals. Streamlining processes, integrating payment gateways, and providing a user-friendly interface are vital for generating a steady stream of revenue.

Challenge 5: Limiting the scope of your MVP to not over-complicate it

Defining the scope of your Minimum Viable Product allows you to not get caught up in minutiae. Prioritize essential features that address core user needs, keep the focus on delivering value and validate your product concept. Rinse and repeat approach to development allows for future enhancements and scalability.

RST Software expertise in SaaS development

In conclusion, embarking on a SaaS development journey can be both exciting and challenging with a promise of multiple benefits offered by the model but also challenges founders will face.

At RST Software, we provide expertise and guidance that can turn your vision into a successful reality. We specialize in offering full-cycle product development services, catering to a variety of clients in different industries. With our trusted and experienced team, we understand the complexities of SaaS development, from ideation to deployment.

Let us be your partner in bringing your SaaS product to life, ensuring seamless integration, top-notch security, and exceptional UX. Contact us today to discuss your project and let’s set out on a SaaS development journey together.

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