SaaS MVP: How to Create Your First SaaS Startup


There are thousands of startups getting launched every day. SaaS solutions are noteworthy for their flexibility. If you have the idea that it is the one-stop solution for your target customers, your SaaS startup can indeed be a great success. But, how to create your first SaaS startup?

Setting a SaaS startup is even more challenging than the original idea. It takes a lot of research, analysis, planning, and the correct allocation of resources to create a SaaS startup and thrive in the industry. If you are looking to create your first SaaS startup, we have curated a complete guide for building a new SaaS startup that can stand out in the industry and attract the most number of customers. Let’s get started!

Conduct Market Research

Market research is the ultimate requirement of building a SaaS company. Here are a few points you should analyze while doing your market research:

  • Industry Overview

Expand your industry knowledge by knowing what works best amongst the customers and the best performing trends in the industry. This will help in defining your market segment. Focus on vertical markets, mobile-first SaaS apps, transfer from SaaS to PaaS, etc. You can also try to attend webinars to summits that talk about the latest trends and give you a better insight into the current SaaS market. 

  • Target Market Research

Everyone is not your customer. Your SaaS startup should be focused on a specific target audience. Hence, start finding your potential customers and learn about different demographics such as age, gender, geographic location, professional, education, etc., to understand how well you can convey your products to your target customers.

  • Competitor Analysis

There are millions of SaaS companies worldwide. What makes your SaaS business stand out from the rest? Focus on understanding what cloud computing model if your competitors adopt: SaaS, PaaS, or LaaS? Understand the products launched by them and study their financial information. This analysis will give you a deeper insight into the pricing models, revenue, and marketing strategies that work best in the industry.


Start with Lean Planning

When you have all the insights about the industry, you’ll need a business plan to start the venture. An efficient way to start with your business planning is to choose the lean planning process, which offers faster deliverability and an easier approach to building a business plan than traditional methods.

Here you need to start with a one-page pitch instead of a lengthy 40 pages book of the business plan. The pitch should cover your strategy, tactics, business model, and your schedule. To sum up, it should state everything about what you’re going to do, how you’re going to do it, who is responsible for the processes, and when you plan to complete every stage of the plan. Here’s a simplified breakthrough of the lean planning process:


  • A short description of your business and your unique value proposition
  • A description of the problems your startup is aiming to solve for the customers. Clearly state the solutions
  • A description of the target market which you have already analyzed from your market research
  • How you differ from your competitors and why customers will choose your business instead of theirs


  • List your sales channels which you are going to use for promoting your products
  • Describe the marketing strategies you will use to sell your products
  • List the key partners and resources involved in the process
  • List your entire team and their roles

Business model:

  • Focus on having a sales forecast and expense budget beforehand here
  • List your primary and the other extended streams for revenue
  • Mention your critical expenses and cash flow in your business
  • Mention how your business is planning to make money and earn more profits


  • Outline an action plan of the entire process of how things will be executed in your SaaS startup
  • Set specific tasks and milestones while assigning roles to different team members
  • Map out certain dates and deadlines to hold the people accountable accordingly

You can also try different software and tools such as LivePlan that can help you create a lean plan for your SaaS startup.

Illustration of marketing branding

Test Your Hypothesis with a Prototype

After assessing the market potential of your startup idea, you need to finally build the SaaS product. Even if you consider this too soon to start with the product, at least getting started with a prototype can be highly beneficial throughout the process.

A prototype is simply a rough implementation of your SaaS startup idea. You can use your prototype to demonstrate your idea to your potential investors and help them understand how it works and its benefits. You can also call it a draft for your business.

Another advantage of creating a prototype beforehand is testing. While you create a prototype, your early investors and adopters can test it regularly to analyze from the customer’s end and consequently make the rectifications as required, resulting in a better opportunity to bring the best product to your customers.

Choose the Pricing Model

Your pricing model is another essential element that determines the success of your SaaS startup. You need to choose the best monetization strategy that profits both ends. You can either choose any one strategy or a mix of multiple ones. Let’s check out some common monetization strategies for SaaS startups:

A Free Application that Supports Ads

Here the product is free, but it will be funded from the ads. You can set built-in advertisements, which can bring revenue as more people use your product. However, don’t go overboard with the advertisements since it may affect the user experience.

For example, Wave is free accounting software that does not charge its users for its services but has built-in advertisements to generate revenue.


Flat Rate Pricing

Being one of the most common pricing models for most SaaS companies., here you have a single price differentiated between the time of payment: monthly or annually. This model often comes with a specific trial period for the customers.

For example, Basecamp is a project management tool that offers all its services to customers at a flat rate of just $99/month.



Here, your product’s basic functionality is free. However, customers can always upgrade to avail the Premium features at an additional cost.

For example, Drift is a sales and marketing company that offers free features to the customers and additional functionalities for the premium packages.


Per Storage Pricing

You can charge your customers for your product based on the storage space they need. Usually, a limited amount is free. Post which, you can start charging on a monthly basis. Here customers easily tend to upgrade as long as your product serves them the purpose.

For example, Dropbox has multiple plans which offer different storage space options.


Build the Brand for Your SaaS Startup

Since you are competing in a crowded marketplace, your business needs to really stand out. You can start by hiring companies and agencies that can help build your brand the right way by leveraging different tools and software.

Here are the key branding elements you should consider:

Clarify Your Vision

The vision for your SaaS startup is the stepping stone to success. You have to make it clear to every member of your team to give them the right direction of the entire strategy. It should also explain the goals of your company and what it aims to achieve through the customers.

Prioritize the Quality of Your Services

Focus on making your products inclined toward the customer’s pain points and user experience. Here you need to ensure that your product is valuable to your customers and brings them the desired results.

Name Your Brand

Pick up a good name that represents your brand and its message. Focus on choosing names that are easy to spell, pronounce and remember. Don’t add any words that, when translated, can turn into something offensive in other languages. Lastly, keep it unique from your competitors.

Get the Required Financing

To fund your business, you can try different strategies like bootstrapping your startup, pitching to investors or venture capitalists, or even borrowing revenue from your friends and family.

Bootstrapping your business gives you better control over it since you can operate it however you want and choose who can be involved in the business.

To choose the best strategy, you need to have a detailed financial forecast which can give you a better pricing of the market and the expenditures required to run the company. It is easy and only requires a good knowledge about the target customers and the market. A financial forecast is necessary to go for a loan or pitch any investor to find your business.

Lastly, when you pitch to the investors, ensure that you have a well-built business plan, all the financial documents, and a good pitch ready to close the deal!

Select the Development Team and Approach

Next, you need to pay attention to developing a team of the best professionals who can design the application for your business. Since you are building your business from scratch, here is a rough list of the specialists you may need in your team:

  • Project manager
  • Business analyst
  • QA engineers
  • UX/UI engineers
  • Frontend developers
  • Backend developers

While choosing the specialists, focus on the following aspects:

  • Relevant experience for a similar industry or niche
  • Great UI/UX design expertise 
  • Client testimonials and reviews, especially referrals from other fellow business mates
  • Extensive knowledge of coding to create the product
  • Expertise in building MVP products from scratch

Your ideal development approach should be agile yet efficient. Here’s a rough outline of what should be the prime focus of your development team:

  • Improved quality with manageable units that is more focused on development and testing
  • Transparency about every step of the development process
  • Reduced risks of errors in the processes
  • A stringent schedule of product deliverability.
  • The flexibility of making changes and iterations whenever required

Launch an MVP First

Everything comes down to the quality and value of the customers. A successful SaaS startup development starts with the launching of an MVP.

The Minimum Viable Product (MVP) is just the simplified version of your application with just a few features designed for getting feedback from the investors and the beta users. Like we mentioned before, you can call it an advanced prototype of your SaaS product.

The MVP will validate your business idea by identifying any flaws or features that your users may need. Let’s check some tips to create an MVP for your business:

  • Avoid spending too much time on MVP. Adopt a small SaaS development cycle to identify the requirements and validate the ideas quickly!
  • Focus on the minimum requirements here and implement the SaaS idea. Once you have the complete scope ready, your MVP will get even better.
  • Test out different business models and their elements, such as the pricing models, features, etc., to understand what works best for your business.

Develop a Kickass Marketing Strategy

When you have the -plan, funding, and resources ready, it is time to analyze the marketing strategy to promote your product. There are multiple ways you can promote your product in the market, such as:


You can either hire a PR agency or do it yourself. The latter one is better since you know your business better than anyone else. Start with press releases that can make the buzz about your product throughout your target geographic location.

Participate in Online Communities

Online communities like Reddit, Quora, etc., are the hub of online communities filled with passionate people who are equally interested in your product. Start by conversing with them about different industry matters and offer your valuable opinions and advice. This will assist in building your brand authority while subtly marketing your product.

Start Creating Good Content

Content is the king. Leverage the art of content marketing by creating different forms of content such as videos, blog posts, infographics, email newsletters, and so much more. This marketing strategy is proven to drive immense growth in traffic to SaaS businesses, and it is also a relatively easy way to start your business marketing.

Free Trials

Who doesn’t like free products and services, right? Start by giving out free trials of your product to certain customers, and if it works well for them, you can expect some loyal customers in no time.

Track Your Progress

Like any other business, you need to track and monitor your SaaS startup regularly. After you have launched your SaaS product, you need to analyze the core metrics of your business such as:

Churn Rate: This determines how many users abandoned your product within a specific month. It also indicates the percentage of customers who have canceled your services every month.

You can calculate the churn rate by the number of customers who have canceled divided by the total number of customers your SaaS business had at the beginning of the month.

Monthly Recurring Revenue (MRR): This determines your profitability ratio at the end of every month. Calculate it by adding your first month payments by new users with the total billings from customers who have purchased your product at a certain month.

Average Monthly Revenue Per Customer (ARPU): This indicates each customer’s revenue to your business on an average month. Calculate your ARPU by dividing the MRR by the total number of existing customers in your business.

Lifetime Value (LTV): This indicates the prediction of the figure you want to get from an average customer who uses your SaaS product. Calculate it by dividing ARPU by your current churn rate.

Customer Acquisition Costs (CAC): This indicates the costs for you to gain a customer for your business. Calculate your CAC by dividing the total number of monthly sales and marketing expenses by the number of users added during each specific month.


Launching a SaaS startup is definitely overwhelming. Each of the steps mentioned above requires time, testing, and refinement. The key to creating your first SaaS startup is to do your research, get the funding, bring the best product to your customers and monitor the results. With this combination, your SaaS startup can definitely give tough competition to the renowned names in the industry or even surpass them in the upcoming years!

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