5 SaaS Startups and Their Best Practices

Geri Mileva on SaaS Marketing

SaaS Start UpsIt’s full steam ahead for Software as a Service (SaaS) companies. With around 22% annual growth, it’s definitely a thriving industry.

But in SaaS, it’s not enough to grow. You need to outpace your competitors. The biggest SaaS companies tend to be the ones who enjoy the fastest-rising revenue and team size. Those who scale their teams rapidly (56% each year) reap the rewards of a quick ratio, earning back revenue as much as three times for every dollar lost.

Succeeding as a SaaS company requires you to provide a product or service that’s useful, scalable, and cost-effective for customers. Striking a balance between quality and cost is a challenge, but an actionable one.

SaaS Best Practices

If you aspire to make the best SaaS products and grow your brand into a recognized cloud service, there are strategies to keep in mind. Here are five SaaS best practices and the companies that used them to earn their success:

1. Choose a Large Market

When starting to conceptualize a SaaS product, it’s very important that you start off with a sizeable target audience. In SaaS, volume means customers!

The possibility of generating a healthy profit is achieved only when you have a sufficiently large customer volume to cover development and marketing costs. If your audience is uninterested or too hard to reach, you will be hindering your own expansion goals.

So before you start product development, ask yourself, “Who is my target audience?” and “Is my market really big enough?” Research shows that the biggest reason SaaS startups go out of business is due to the low marketability of their product.

The best way to identify your target audience is to focus on those who have the highest need and are the easiest to reach. Some examples of potential markets include small to medium-sized businesses and small departments within large companies.

HubSpot, for instance, is an inbound marketing SaaS company that started catering to small businesses back in 2006. The company focused on “Ollie Owner” businesses, small operations with 1-10 employees who managed marketing efforts and other tasks.

The gradual scale up of marketing and products enabled HubSpot to move towards larger and more complex businesses, all the way to enterprises by 2012.

2. Have a Self-Service Feature

An important component of SaaS success is to offer a self-service application. Anybody who wishes to use the software should be able to register and use it on their own, without any assistance from technical personnel.

User-friendliness is key—customers prefer being able to manipulate and navigate a service independently. Don’t force users to contact the admin or support team for help, as it would discourage them to get started.

An easy self-service application for users will eliminate any additional burden on your team and make your product resonate with customers.

The online workspace Box enables professionals to securely share large files through the usual link mode or through custom URLs. The platform supports more than 120 file types and safeguards data via permissions and password protection. Additionally, Box automates review and file approvals.

Box’s easy-to-use application and solid onboarding procedures help customers use the product successfully.

3. Solve a Problem

SaaS applications should always provide a worthwhile solution to any challenge that audiences may experience. With so many options on the market, you have to emphasize what value proposition you’re bringing to customers’ lives.

However, having a solution-based product is not enough. You also need to guarantee that users get the same user experience anytime, anywhere, and on any device.

One such app is Concur, a tool for companies that want to manage travel and expenses on the go. Travel booking and reconciling expenses for each trip is usually time-consuming if done manually. Concur provides a web- and mobile-based interface that addresses the tedious paperwork involved.

By enabling staff to book according to their own needs and preferences, they can easily manage their entire itinerary. In addition, the app sets company spending limits for all travel arrangements. Electronic receipts and tickets are all documented on the app and sent directly into digital expense reports. Staff won’t need to collect, track, and submit paper receipts from hotel, auto rental, and airline expenses.

4. Ensure Security for Users

Successful SaaS companies are those that not only solve user problems, but also protect the privacy and integrity of each user. This entails establishing security measures for the SaaS app as well as any accompanying hardware needed to provide the service.

If your SaaS software is designed for multiple clients to share the same infrastructure, you should guarantee that the data is segregated and accessible only to those authorized to do so.

DocuSign is one app that embodies such practice. It’s a transaction management platform that supports the exchange of digital contracts and other documents that require an e-signature. Users access, sign, and send business files whether they are at the office, at home, or anywhere else.

The perfect tool for professionals who are mobile, DocuSign guarantees contracts and agreements are executed in a matter of minutes instead of days or weeks. Plus, DocuSign e-signatures are considered legally binding in virtually every country worldwide. The company has garnered more than 85 million users in 188 countries because of their secure and reliable tool.

5. Establish Scalability of Both App and Database

When it comes to SaaS, scalability is a crucial aspect of your software and database. Why? Because if your entire architecture does not have the capability to handle a growing amount of data and features, then the product may not have the potential to accommodate growth.

App scalability means that you can adjust server capacity to be spacious and powerful depending on your needs. You should be able to allow heavy data usage and/or storage, and still maintain app performance even during peak times.

Database scalability, meanwhile, means that your database can be upgraded if need be. For instance, if it needs to be able to keep up with a million users instead of just a thousand in the beginning, you have the ability to increase database capacity.

Dropbox, one of the most recognizable SaaS companies with 500 million registered users, employed a successful scaling strategy that enabled their growth.

To address scaling, Dropbox did not opt to have different server configurations and hardware. Instead, they placed smaller server and machine types with consistent configurations. That way, any hardware issues are isolated and addressed easier and faster.

Dropbox also prefers beta channel updates for users, introducing new code and features before they hit the main line. Such beta testing gives the company immediate results that help resolve bugs and provide continuous improvements for users.

A Great App Can Be Transformative

Software as a Service is growing strong because of one big reason: a great app can transform how companies and organizations operate. Through SaaS, clients can decrease infrastructure, increase efficiency, and save on upfront costs.

Learning about what best practices have proven successful for SaaS companies enables others to follow the same principles to make their own mark in the industry. And who knows, with enough inspiration and innovation, you could be joining the ranks of these top-performing companies in the near future.