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SaaS Development Guide for Value-Centered Founders [w/o Pitfalls]

Find out the pitfalls and challenges of SaaS application developmen and how to successfully avoid all of themt

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SaaS development is a challenging process. But the reward is worth it. The revenue of cloud software is going to reach $278 billion by the year 2021. Your own SaaS product could expand in the market.

It is not easy to with other high performing software. For instance, your daily  Slack, Dropbox, or Canva. Yet, combine a valuable idea with precise implementation. It can lead to a proficient SaaS platform development.

We will clarify the step-by-step process of developing your own cloud software

  1. What SaaS development framework looks like?
  2. What are the best practices for building Software as a Service?
  3. How much does it cost to create a cloud app?
  4. How to create, develop, and improvise your software as a service.

Let’s consider the main steps:

  • technical planning and business validation details,
  • challenges of the SaaS platform development process.

What Is SaaS Application Development?

The development of a SaaS platform is cloud software development. Yet the founders should understand a simple thing. The business development of the product is important. It must have a higher priority, than technical solutions.

But without a good architecture technical background. The product won’t provide the desired greatest business value proposition.

The process of SaaS development includes:

Also, the business model of SaaS requires a few things to consider during development. One of those essential aspects is understanding the development process. Next, is the SaaS software development costs.

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1. Integration of third-party services

The core feature of SaaS software is its payment system. There are two options to consider while developing such functionality. Both of these options have varied development costs and time consumption.

Option 1: Use Integrations Option 2: Develop Own Solution
On the one hand, the development team could use ready-made payment gateways.

It is easier and faster to put in place. PayPal, Stripe, Braintree, or other payment systems provide their API.

The motive is to include their service into your product.

There may be specific requirements for payment. Hence, developers need time to research and design.

And they should know how to create their own secure payment system for the software as a service.

But, this is not easy. As the number of features to check SaaS platform development increases.

This is because the payment process builds upon. Many parts and third party services as well as ready-made solutions.

When you build a SaaS application, follow a few examples of third-party integrations. Use of Google Maps, social media sharing, connection with CRM. Any other kind of addition of features based on other software is a 3rd Party integration.

It requires extra research and effort to code everything well. Hence, the final SaaS software may also depend on the development costs. These are the costs incurred to embed features and services.

Also, it is important to cover these integrations. With manual or automated tests for efficient working. You can build a better SaaS application. The motive is to make sure everything works well. Yet, it is also essential to use a proactive development team.

We will talk about the team further in the “How to create software as a service” part.

2. Secure  and Well-Designed Database

The standard security protocols of database providers use TLS and SSL encryption technologies. It protects the data and communications of users.

Yet, there exist extra technical solutions. They help make your SaaS even more secure at the development stage.

For the American SaaS platform development for healthcare, there is HIPAA compliant app development. For European products, there is GDPR compliance.

Define both  HIPAA and GDPR protocols. Adhere to the guidelines to build SaaS applications. Follow them, from the very start of the development process. Because these safety standards need exact compliance with regulatory requirements.

The implementation of those compliances is also challenging. Due to the inclusion of these measures. There may be changes in the final SaaS software development costs.

3. No-downtime deployment

The key to building a successful SaaS platform is a constant update. The uninterrupted availability of your product is a must-have for its development.

You should avoid the case when one part of users use an outdated version. While the other part uses the current version. It leads to customer dissatisfaction and plenty of bugs.

To do so, developers have to implement the no-downtime deployment of fresh updates. Your product has to stay workable in both versions for users.

The on-premise software platform development must have planned updates. During which the product or software is unavailable for use.  When a product isn’t available and SaaS is updating yet, the app runs in the background.

4. Management of a Subscription Lifecycle

The Software as a service subscription deals with a bunch of processes. It includes:

  • subscribing,
  • trailing,
  • upgrading,
  • canceling,
  • unsubscribing.

It is imperative for the process of how to create a SaaS for the desired results. All these processes and procedures are essential

When they build SaaS platforms. There are two options for how developers could handle subscriptions.

Option 1: Use Integrations Option 2: Develop Own Solution
The first one is to integrate a ready-to-use solution or application. It’s less expensive and easier at the SaaS platform development stage.

Yet as a founder, you would pay for maintenance of API monthly or annually. Hence, this is a friendlier approach, keeping in mind, SaaS software development costs.

For example, Stripe provides a subscription management API. It’s a development-friendly solution. So your team would be fine using this integration for your SaaS.

The second approach is to develop your own subscription management system. It would be more expensive while developing, but you’ll have to pay once.

As in the case of your own payment system, your own subscription solution requires a lot of effort. You need to take care of researching and implementing it.

The main benefit is to have full control of the processes and integrations.

5. Scalability and customization of the whole platform

Scalability is another factor to improve the success rate of the final product. A complex SaaS platform must be customizable at each layer. Thus, the developers have to take care of these aspects in the development process

  • integrations,
  • interface,
  • set of features,
  • page templates,
  • URL structure.

It helps for a non-stop scaling of your product and makes it more attractive to end-users. Such a SaaS platform development procedure provides a lot of value in the long-run.

The main challenges of SaaS development includes database design and 3rd party integrations

How to Create Software as a Service?

Before you look for how to create your own app. As a founder, you need to clearly formulate the core value proposition of your Software as a Service. This is the first step for any kind of cloud-based software development.

Yet it is especially crucial for a SaaS application development.

Hence, the development of your SaaS should start with three kinds of research:

  • Market research
  • Competitors research
  • Customer research

These activities are a part of the validation of your business hypotheses. And demand the product. Without validation, you could not prove the real existing on-market demand. And with no validated demand, you will burn out your own funds on the development of useless software.

So, avoid jumping the crucial steps when you build SaaS applications.

Thus, the question of how to create this product comes afterward. First, you find out what problem your software as a service solves for the users.

Each type of study will help you accurately find the key elements to focus on. They are important to consider during the development of MVP of your SaaS platform:

  1. What is the size of the market? Is there enough demand for a new product?
  2. What is customer pain? Is it validated pain? How is this pain solved right now?
  3. What are the disadvantages of the current solutions?
  4. What does your product do that competitors don’t. ? Does it have something better than other similar software? Is this enough to change the user behavior pattern?

After these steps, you will be able to clarify the required scope of features. They are essential to start SaaS application development. But business analysts or product managers will do features prioritization. And after that, the development team will start working on your MVP.

The typical set up of features for SaaS platform or application includes:

  • Functional tools. For the cloud platform as Canva, it is a visual editor with plenty of editorial features and filters.
  • Analytical tools. CRM systems like Hubspot, have a smart dashboard with graphics, reports, and statistics.
  • Management of accounts. It’s a smart system to differentiate customers’ roles, plans, and set of features they could use.

So, after the initial discovery phase of the project. You could move to research on how to create Software as a Service.

Let’s take a look at a step-by-step process of application development of your SaaS.

The typical set of features to develop while SaaS application creation

SaaS Development Team

The number of team members for the application development may vary. This variation can be according to the complexity of SaaS. And this is also a crucial aspect of how to create the software as a service.

The next step is to build a SaaS Platform Minimum Viable Product. You need at least following development team configuration:

  • Project Manager
  • Business Analyst
  • UX/UI Designer
  • Backend Developer
  • Frontend or Mobile Developer
  • QA tester

SaaS Application Development Framework

SaaS platform development lifecycle starts right after the project’s discovery phase. The stages of building SaaS are pretty much like common software development stages.

The workflow looks like that:

  1. Business Analysis. The stage of collecting product requirements and building user journeys.
  2. Design. At this stage, the design team creates low fidelity prototypes. They also create a User Interface kit for an attractive visual design.
  3. Development. At this point, the team makes your product with the SaaS software’s MVP features. And integrations that are applicable at the end of the process. Plus, it is also essential to note that the development costs at this stage.
  4. Testing and debugging. It’s a permanent stage, SaaS’s popularity is subject to its performance and smooth operations. Hence, to make sure, everything works well, there is a need to test an outcome of each iteration.
  5. Maintenance of product. This is also a long-run stage. It makes sure your product is always up to date with the market requirements and trends.

It is necessary to focus on high-quality User Experience. That is if you are looking to create a valuable SaaS platform. Thus, it’s important to take into account all the main development challenges. And make sure you work with an experienced team to deal with them. This team must know how to create software as a service for the best results.

Thus, It requires using the best SaaS development practices. It is beneficial to build SaaS application.

Solution Description
Design a scalable architecture of Software as a Service The base of any SaaS platform is constant growth. Hence, with a larger number of users, the capacity of application should evolve. Thus, it is a must to improve the development process.

And that’s why it is important to build an easy to scale architecture SaaS application. The well-made design includes at least three parts. A deployment model. Integration of a database. An advanced system of resource management in-app.

As a result, good scalability allows us to know an application’s capacity on-demand. And users won’t feel dissatisfied because of lags and bugs of any kind. Also, we take care of the SaaS software development costs while working on this part.

Implementation of a queuing system This kind of system in SaaS development helps users interact with a platform and APIs at the same time. In technical terms, it’s an asynchronous communication protocol.

As each system works with senders, receivers, and messages (any kind of data).  It is important to allow each user to send a data request to a system and receive a result.

The Message Queuing helps each user run a SaaS at different times. But, also communicates with integrations and other services.

Development of SaaS integration approach This tactic is applicable in a very specific case.

Many enterprise companies use their own versions of SaaS software solutions. Or big companies could use on-premise software but plan to move into the cloud. In both the options, the development costs differ.

In this case, it’s important to guarantee smooth migration from one software to another. While ensuring no loss of data.

A well-designed integration approach to build SaaS applications is beneficial. It helps enable data exchange. And integrate new software in the existing business process.

SaaS Development Tech Stack

There are plenty of choices of technologies and SaaS development tools. These tools help to build a perfect (in development terms) application.  The choice of proficient tools is also important to understand how to create the product. The mix of languages, libraries, and frameworks is also essential. It relies on the need for a particular product or software as a service.

Yet, it’s crucial to highlight the tech stack. Our team uses to leverage the needs of SaaS platform founders. As per experience, the current stack is the best fit for the development of a SaaS application in a reliable way. You can choose to build your application with the help of these technologies.

Backend Frontend
Server: nGinx Libraries Vue.js, React
Framework Laravel Languages HTML 5, CSS 3, JS
Databases MySQL, PostgreSQL, Redis Mobile frameworks React Native, Flutter, Objective-C, Swift, Kotlin, Java
Hostings AWS, Vultr

Experienced Team to Build Your Own SaaS

Our team has successfully launched over 40 products. See for yourself that we successfully overcome the challenges of SaaS development.

Check Case Studies

SaaS Product Development Checklist

The development of the SaaS product is first. Yet,  it is the most crucial step, in product development. The checklist is also an essential aspect of how to create software as a service.

To achieve success in the market,  there are a few important steps to consider. Well-executed and satisfying technical requirements the first one. Further, your SaaS platform should help customers with their pain points. It must give them some value and solve their problems.

Thus, we highlight the top 4 points to consider for your SaaS Software development. Take care of these steps before you start to build it:

  1. Test the results of each iteration of the SaaS application. The expectations of customers are quite high too. This is important to impress users from the first touch. Hence, it is a must to conduct deep testing of each aspect of your application. This includes technical integrations, business logic, and design. Also, take note of the development costs while developing these features. There are a few fields you must include into the testing loop:
    1. Functionality testing,
    2. User experience testing,
    3. Performance and Load testing,
    4. Compatibility testing,
    5. Security testing
  2. Include a smooth customer onboarding. Customer onboarding is crucial for an excellent User Experience. You definitely need to think through this step while the development of a SaaS platform. The common onboarding process includes:
    1. Sign up and sign in: Logging in with Facebook, Twitter, and Google is a must.
    2. Welcome screen. It’s an important part to let users quickly adopt.
    3. A quick product tour. Usually, there are 3 screens with core features in a step-by-step introduction.
    4. A launched email campaign. After the user signs in, it’s crucial to continue to warm up the user. It increases the chances that he or she will become profitable customers.
  3. Try outsourcing. It is important for any startup to build up an in-house team. But there is a major drawback – it costs 2, 3 or 4 times more than outsourcing. Thus, if you work with a limited budget. Try to find a reliable outsourcing partner for your SaaS application. Today, the market for outsourcing web development is reliable.  Companies sign up NDA. They guarantee results. And the developers provide a high quality of the code. This is where founders observe a change in the final SaaS software development costs.
  4. Define and measure core business metrics. The use of metrics gives you valuable and insightful data to analyze. It shows how your target audience is really feeling about the product. Collecting customer’s feedback makes for easier development of SaaS development strategy. It also helps in generating and prioritizing the new features.
SaaS Product Development Checklist includes 4 basic elements

SaaS Software Development Costs

It’s a complicated task to define the approximate costs of a SaaS platform. There are too many factors to consider in its development:

  • The complexity of core features
  • HIPAA or GDPR implementation
  • The number of third party integrations and its complexity

Yet, we could calculate the development costs for SaaS software based on two factors. The average number of hours required for an MVP.

So, an average MVP takes 1,000 – 1,500 hours to complete.

Let’s say you want to build a mobile SaaS app for the architectures. It’s a camera-base application that makes 3D models using real photos. And it works online, so it is a software as a service too.

First, you need to know how to create the software framework and its value proposition.  Users can edit photos, edit models and show the final results to their own customers, through the web. It should include:

  • Artificial Intelligence algorithms to analyze photos and convert them in 3D models
  • Advanced visual editor, that enables them to  edit both 2D images and 3D models in real-time
  • Perfectly designed a database to ensure the scalability of the application. Because 3D rendering is a very resource-intensive process.

The SaaS software development costs for the MVP could be much higher. Because there are a few complex features besides the core enhancements. These are the most essential aspects when you build SaaS applications.

We consider three options to start MVP and identify the development costs.  They are American digital agencies, Indian and Ukrainian outsource development teams. Even though all of them know how to create SaaS software. The quality of the final product is different.

They all have benefits and drawbacks in cooperation:

  • The American developers look like the most reliable partners. But, their development costs are too high.
  • Indian developers have much less cost. But the quality of the SaaS software code is relatively low.
  • Ukrainian teams cost a bit higher, then Indian, but with a quality equal to American.
Country The average cost per hour Cost of 1,500 hours
The USA $120 $180,000
India $25 $37,500
Ukraine $35 $52,500

This average estimation includes:

  • Planning stage. Discovery phase of the project. Market, competitors, and customer research. Creation of documentation and prototypes.
  • Development stage. Design, coding, and testing of the product.
  • Post-launch stage. Maintenance of the project and costs to maintenance server, database, integrations.

Thus, you must create the SaaS software in these stages. Plus, the total development cost will also depend on these stages.

Want to Build Your Own SaaS Application?

The team of SpdLoad has focused on the development of SaaS applications since 2013. It’s our core design and development expertise. We have prowess in building software as a service. From the initial stages of planning and allocation, to how to create it, we can do everything.

Besides the development itself. We pay great attention to the business component of each product. Because a product without users leads to an unrewarding expense of the founder.

For this reason, we provide each customer with experience in growing SaaS startups.

What We Do Why It Is Important
Develop the customer onboarding flow SaaS onboarding is a process that helps new users get started with your application. If it is convenient for the user to use the product, its success rate will be equally higher

Thus, onboarding is a tool to engage and retain the user. We develop a smooth process, that includes:

  • User-friendly roadmap for each user’s role
  • Catchy motivators to increase user’s retention rate
  • Mechanics to easily stick to the user’s daily routine
Develop the SaaS pricing strategy Every Software as a service startup requires an advanced pricing strategy. The reason is simple. There is an opportunity with the subscription-based payments and complex SaaS packages. They can make a higher profit.

We conduct constant market and customer research. This helps to implement value-based pricing for your product.  It allows you to significantly boost up pricing in the development of budget limits. We know how to create the final product that gets the best results.

Help to increase MRR / ARR One key metric is the Monthly or Annually Recurring Revenue. It helps define the profitability of the product. Higher profit means a faster expansion on the market.

The difference between cost metrics (CAC, churn rate) and income metrics (retention rate, LTV) is the generated revenue.

We help you to launch the business processes in an income-oriented way. It includes:

  • marketing and SaaS sales activities
  • collecting customer feedbacks and requirements
  • rapid testing of new business hypotheses

Let’s take a look at our case study of a SaaS development. We created an MVP for the Human Resources department for an enterprise company.

The team of founders had a clear and validated set of production values. It helps us to rapidly collect the requirements. We did feature prioritization and launch the developmental stages of the application. Our approach helped us to build a scalable MVP in tight timeframes.

At the MVP stage, there were a few key challenges and insights.

Startup Challenges Our Solutions
Integrate SaaS in the custom CRM of an enterprise company. We work with the development team with a tech lead at the architecture level. It helps us to develop a SaaS integration strategy.

We set up our product in the custom CRM of an enterprise. It was built and maintained on outdated technologies.

Yet we did it without interruptions in the work of the live version of the product. The work was complete within the pre-set tight timeframes.

Configure the process of collecting and prioritizing the product backlog.

It would help us to clearly communicate and launch new features more often.

We implement the framework for eliciting and prioritization requirements.

The solution depends on customer development:

  • Use of design thinking
  • Use of interviews
  • Analyze the current way to solve customer’s pain
  • Use of MoSCoW framework
  • Implement the tech writings
Launch the project coordination for on-time delivery of updates.  For both Germany and Ukrainian offices. To synchronize the development process, we implement SCRUM method in the German office.

It gave us a starting point to use the same project management software.

Check our Case Study

Take a look how we managed challenges of complex database design, plenty of integrations, and the lack of documentation.

Check Case Study

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Posted by

Max Babych

Max Babych

I am CEO of SpdLoad

I launched SpdLoad almost 7 years ago and now it has 20+ successful products in SaaS and Marketplace industry and several own products. I am an expert in Marketing, Lean Methodology and Customer Development approach.

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