How to Build a SaaS Business: A Step-by-Step Guide to Starting and Operating a Software Company

By Einar Uvslokk

SaaS – Software as a Service, is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted.

«How to build a SaaS Business» will teach you the process of building your own online software business and it defines the tactical and strategic plays technology companies must run to build a profitable subscription business.
The process of creating a SaaS business will be different for everyone based on your products, so instead of the products, we are going to focus on a repeatable framework that you can adapt to your situation.

You will learn about:
-Revenue and how to monetize your products
-Aligning yourself with other players in your space
-How to start, refine and improve your process
-Finding a niche and narrowing it down
-Understanding your product and how it relates to your partnerships
-Building a market strategy
-Building customer advocates
-Relevant information when starting an online business

The book is easily comprehensible and does not go out of its way to confuse the reader with fancy terminology. SaaS solutions are exponentially growing, and with this guide anyone will be able to claim their piece of this 100-billion-dollar market.

• Language: English
• Publisher: Einar Uvslokk
• Release date: Feb 15, 2021
• ISBN: 9781393185901

Book preview

Table of Contents

_______________________________________________

Introduction        1

Chapter 1 – Revenue and Monetization    7

Chapter 2 – Align Yourself with Others in Your Space  14

Chapter 3 – Process, Process and Process   33

Chapter 4 – Work on Road Mapping    44

Chapter 5 – Work on Building a New Marketing Strategy 57

Chapter 6 – Build Customer Advocates    65

Tools – Useful Tools for Entrepreneurs    74

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Introduction

This book is a no-bullshit guide on how to start a SaaS company right now! I could have written a 500-page book about this and filled it with all kinds of information, but I chose to keep it short and to the point, as I know you are quite eager to get to the good stuff - the stuff that matters. 

Software as a service is a booming business and will continue to grow in the years to come. To give you a scope of the size of the SaaS industry:

According to Gartner’s research and insight company, SaaS solutions will generate revenue close to $105 billion in 2020 alone. That is a $20 billion jump from their estimates for 2019. In 2022 it is estimated that SaaS solutions will generate close to $141 billion! Don’t you want a piece of that cake? 

In January 2020, the ten largest publicly owned SaaS companies, per market cap, were: 

(In USD Billions; per market cap)

Salesforce - $161.4

Service Now - $57.9  

Shopify - $52.1

Workday - $41.3 

Atlassian - $33.3 

Square - $30.1

Veeva Systems - $21.7

Zoom – $21

Paycom - $17

Twillo - $16.8 

The process of creating a SaaS business will be different for everyone based on your products, so instead of the products, we are going to focus on a repeatable framework that you can adapt to your situation. 

I have divided this book into six chapters to discuss different parts of starting a SaaS business. 

1. Revenue and monetization plan 

2. Aligning yourself with others in your space 

3. Process, process, and process – Start one, refine it and continue to improve it

4. Work on road mapping your product to coordinate with what complements your partnerships

5. Building a marketing strategy that exposes and aligns your brand while strengthening its recognition with your partners 

6. Building customer advocates along the way, telling their stories 

Before we jump into the first chapter, I will provide some base-knowledge that will set you up for the rest of the book. I will start with a keyword dictionary, which you can refer back to if you get stuck on some of the abbreviations and terms, and then we will take a quick look at the market we are entering. At the end of the book, I will also provide a list of useful tools you can refer to during your process.

SaaS – Software As A Service  

PaaS – Platform As A Service

MVP – Minimum viable product 

CRM – Customer Relationship Management

CMS – Content Management System

Elementor – Website building tool integrated with WordPress

UX/UI – User Experience/User interface

NDA – Non-Disclosure Agreement

TAM – Total Addressable Market 

SAM – Serviceable Addressable Market

SOM – Service Obtainable Market 

SKU – Stock Keeping Unit 

B2B – Business To Business 

B2C – Business to consumer 

LTV – Life Time Value

API – Application Programming Interface  

General about B2B and B2C

If you are B2B (Business to Business), you’re looking at either ongoing services or software. In some cases, it may be a little of both.

If you are B2C (Business to Consumer), you should be looking at:

Consumable products

Things people buy multiple times

High LTV (lifetime value) customers

A product with a subscription element

NO EXCEPTIONS!

Suppose you are selling to any businesses or even consumers today. In that case, it’s all about the perceived value for the customer, which means there must be some wiggle room depending on whom you’re selling to, BUT the following should be foundational:

It saves time (reduces friction or replaces a time-consuming task)

Makes or saves them money (creates revenue/ adds value that lets them win business)

Adoption is simple for their workforce (it is easy to incorporate into an existing workflow, and anyone can use it/cost of switching is profitable)

Adds transparency and allows for more significant insights (provides data)

B2C an additional one – it provides them joy or enhances their life

That’s it!

If your main focus lies in these four areas, you will exponentially increase your chance of success.

High growth business usually knocks out at least two or three of the above.

Uber is a marvelous example of a company hitting just about all of them:

No need to call any cab company and then hope that they show up; you know where your ride is at all times

They save their customers money, as there is no more guessing on price and subsidized rides.

Just download the app on your phone and add your credit card number.

The service tells me where my ride is, how long until they reach me, and how much it will cost

It gives me an easy way to get a ride when parking is hard to find or if drinking is involved.

This framework works for many businesses. More than a few SaaS companies have checked the box on most of them and progress in clients and funding as a result, even in historically busy spaces.

General management advice 

Good management is more important than people think.

Managing is tough. Just because someone was a great employee does not make them a good manager too, and just because someone is an executive in a company doesn’t make them an excellent communicator.

Respect that everyone has unique ways of communicating and try your best to understand from which standpoint they are talking.  

Two lessons I’ve learned so far from working with a lot of higher leadership.

Internally, break down everything into small goals, always ask yourself, What’s my goal? related to calls, emails, posting, meetings, hiring, outreach, and other tasks.

Make this shit your mantra, then distill it down to the simplest form it can be. Asking that question in all situations will radically change how you work and operate at a much more efficient level.

You should always strive for clear, specific, and concise communication throughout all the interactions. If you disagree with any request or find it not in the best interest, raise questions about it. Remember, we’re all in this together. As a

Reviews for How to Build a SaaS Business

[Hunibuni74 · Rating: 4 out of 5 stars]

The title is misleading, it should say " So you want to start a SAAS? Here are the steps to work out if your idea is viable, before engaging a tech to build it."
As I was looking for a technical guide, this wasn't it.

Otherwise great points on working out the niche of your idea. Who your customers are. Where to look for your first tester's, and work out what your SAAS type will be.

[salim khan · Rating: 5 out of 5 stars]

Absolutely Amazing, very useful information on how to start the SAAS Business, Einar Uvslokk has really shared all his experiences in a very easy to understand language . Anyone who dreams of starting SAAS business must read this amazing Book.