With SaaS being one of the popular business models, many IT startups opt to go this route. However, the field can be surprisingly complex. And being unprepared can lead to various mistakes. Let’s look at some of the significant ones your startup company will encounter and how to avoid them.
SaaS Mistake No. 1: Not Understanding The SaaS Model
Arguably the most common mistake many startup companies make when jumping into the field is not fully understanding the SaaS model. As mentioned earlier, the model can be surprisingly complex. Such a misunderstanding will impact how well you implement the model and do business.
One of the most common misconceptions here is what SaaS operations actually entail. Note that it isn’t just about getting your online software running. You also need to have a good grasp of the other components that make the business viable. These include:
- The development plans for the product
- Your servers
- The required databases
- Your actual software implementation
Each of these components requires a lot of attention. And an issue with the management of one can have a significant impact on the others and the business as a whole.
How Your Startup Company Can Avoid This Mistake
Obviously, the solution here is to study the model more and how it would be relevant to your business. The first thing you would want to determine is whether SaaS would be suitable for your product idea.
Note this depends on factors like your target customers, intended use, etc. For instance, target customers are field workers who might not always have a stable Internet connection on-site. Because of that, they might have a hard time using a SaaS-based solution.
You also need to think about the revenue that SaaS brings. Here, remember that this business type runs on a recurring revenue model. What that means is that you earn through monthly subscriptions. With that, you need to decide whether this revenue model would adequately satisfy the costs of running your business.
Virtua Solutions can help you even at this early point in company development. Our team has worked with various clients running this type of business. With that, we have a good understanding of how it works. We can provide you with the knowledge to develop the business model further to match your needs.
SaaS Mistake No. 2: Not Doing Market Research
Okay, so market research is essential for any business. So, you have likely done it in preparation for operations. But the mistake here comes in how deep your research went. Often, it is only about the level of demand for your product.
However, there is more to it than just that. You also need to understand various things that are fueling that demand. For instance, specific customer behaviors can increase the demand for your products. Not being able to research these nuances can make it harder for you to build up your customers service
How Your Startup Company Can Avoid This
The trick with doing market research is having a clear idea of what you want to learn from that study. That will help you create a research process that will effectively bring in the data you need from that study. Additionally, you get more extensive insights into the results.
A particular area you want to dig into deeper is customer requirements. Here, you need to understand that your customers are not static. Their needs will change and you should be aware of those changes as they happen. Thus, market research should be ongoing work after you launch your product.
For a small SaaS startup company like yours, this might be challenging. We are ready to step in and help you with the work. Here, we don’t just offer grunt work. Our team of customer success agents can do more extensive research methodologies, such as focus group discussions and customer interviews. These agents will then help you interpret the results of these studies and develop your SaaS management strategies more.
SaaS Mistake No. 3: Not Looking At Your Expansion Revenue
The goal of every startup company is to accelerate its growth. And for that, you need to know the potential expansion revenues you can explore. However, the mistake comes in when you misidentify these opportunities.
You might spend too much on a venture that doesn’t deliver enough return. It can also affect your main product, as your time will be divided between these ventures. On the other hand, your users can be annoyed if your service continues to upsell other products they don’t even want.
How Your Startup Company Should Avoid This
The key to finding the right expansion revenue sources for your startup business is determining how they tie back to your main product. Here, what you want are revenue streams your current customers can get into. Often, these additional services are those they need to get more out of your products. With that, they are more likely to explore these new products.
Still, you need to know how to push them in that direction effectively. Just upselling to them might not convince them. Instead, you want it to be more purposeful. Consider the specific issues your customers are dealing with. You can then provide them with comprehensive solutions that use these other products.
SaaS Mistake No. 4: Not Having A Customer Success Strategy
Ultimately, the goal of every customer is to reach their desired level of success through your SaaS product. However, if you don’t have the right success strategy, you won’t be able to help them. That can lead them to ditch your product for another option.
That lack of customer success strategy often comes from the perception that your product alone is what your customers need. That can lead you to not developing adequate support for your customers.
How Your Startup Company Can Avoid This Mistake
This requires a complete change in your mindset. Just like what its name says, your SaaS startup company should be heavily service oriented. That means your company should be ready to develop an entire service ecosystem to help your customers use your product more effectively.
We at Virtua Outsourcing are ready to help you develop and implement that strategy. Our customer success agents will work closely with you to determine the best paths for each customer segment. We will then provide the needed support to help you make these paths more achievable.
Get Past These Mistakes And Your SaaS Startup Company Will Succeed
As they say, mistakes are part of the learning experience. And when your startup company has Virtua Solutions by your side, you know you can overcome these. Contact us today and let us help you get on the right track.