Ruhani Rabin
8 min readAug 22, 2022


Building a SaaS Startup in 2022: All You Need to Know Featured Image

The SaaS industry is expanding at a rapid pace. Gartner expects end-user spending on public cloud services to grow 21.7% in 2022, reaching a whopping $482 global spend.

And further data shows that the number of SaaS customers is on the rise too. In fact, more than one-third of businesses have already shifted to cloud-based systems for their needs.

But here’s the thing. Building a SaaS startup in 2022 seems like an idea guaranteed to come through. However, many entrepreneurs cannot understand that a significant number (over 70%) of all SaaS startups fail within the first three years of being founded.

With this in mind, it’s essential that when considering building a SaaS startup, you know what to do. This article will guide you through the process, telling you everything you need to know to ensure that your vision turns into a success story.

Let’s get into it.

Step #1: Identifying a Consumer Pain Point

They say that every successful business starts with a good idea. But that’s not entirely true.

To build a company that has a chance of success, you first have to efficiently identify a pain point you can solve. And even though pinpointing consumer pain points seems simple enough, you’d be surprised how many entrepreneurs get this first step wrong.

Analysis data from CBI Insights discovered that 35% of all failed startups shared one issue: there was no market need for their product.

So, to prevent yourself from putting your valuable time and hard-earned money into a venture bound to fail, ensure that you cover your bases and precisely define the problem you wish to solve.

Remember, you don’t have to focus on a unique consumer pain point that no one has ever addressed before. You can just as well decide to build a SaaS solution for your company’s own specific needs. Or identify your unique skills and past experiences that will help you solve a problem. You might even decide to take a shot at solving a consumer pain point better than anyone else.

What matters is that enough potential customers need the solution you’re considering developing and that you’re not wasting time on a product that’s either unnecessary or already exists.

Step #2: Market Research

Once you’ve pinpointed a problem you wish to address, it’s time to do market research.

By getting to know your targeted market, you can confirm that your SaaS startup has the highest chance of success. Moreover, in-depth market research will allow you to develop a business plan that yields results. Plus, it will make marketing easier by informing you of any potential market gaps you can use to your advantage.

We can describe market research as a two-step process.

Industry research

The first thing you need to do is to study the industry you wish to enter. This will include getting acquainted with current trends and predictions and will require you to identify and explore your niche.

Make sure that you:

  • collect a solid resource base
  • subscribe to leading analysts
  • explore fresh content that will keep you up to date on everything you’ll need to know to stand a chance of making it in SaaS

This can mean subscribing to mailing lists, listening to podcasts, reading SaaS news blogs, or watching YouTube. Do whatever works for you, as long as you’re actively doing your best to remain in the loop on the latest industry developments.

Competitor research

The second step of properly conducting market research is conducting competitor research.

To guarantee that your SaaS product sells, you need to understand who you’re competing with.

This will enable you to find out product features that could make your brand stand out. It will also allow you to identify ways to differentiate yourself from other businesses in your niche.

Proper competitor research can also give you some pointers on how to market your product. That might seem superficial, but it plays a significant role in helping you build a successful SaaS business.

Step #3: Developing a Solution-based Product

Once you know what you want your SaaS product to do and who you’re competing against, it’s time to go into development mode.

Now, this step of building a SaaS startup may seem straightforward. After all, if you’ve done your homework, you’re aware of the consumer pain points and the state of your niche.

But here’s the deal. One reason so many SaaS businesses fail is that they try to do too much too soon. They blow all their finances on building the best solution out there. And in the end, they either end up with no cash left to finish the project or have a product that’s so complicated that finding customers is next to impossible.

For this reason, aspiring entrepreneurs must remember that the best way to build a SaaS startup is to focus on developing an MVP: a minimum viable product.

What is an MVP?

An MVP is a basic version of a product.

Wihat Is An Mvp

It targets specific consumer needs and solves them with just a few core functions.

It’s affordable, effective, and a great way to attract an audience of early adopters. It’s an excellent way to validate an idea and see if it can make money.

Some of the most widely adopted SaaS products started as MVPs: from Spotify to AirBnb to Foursquare and Dropbox.

The greatest benefit of focusing on an MVP instead of a fully fledged product is that the development phase is cost-effective. The result suffices to get a business operation going and generate an income, allowing your SaaS development team to improve the product’s functions and devise additional features.

Step #4: Marketing Strategy

You understand your industry, know your audience, and have a product. All you have to do now is launch and sit back, waiting for profits to make their way into your pockets, right?

Not really. In fact, perhaps launching a product is the simple part of building a SaaS business. Making sure that the products sell is where the real work starts.

Therefore developing a first-rate marketing strategy is crucial for SaaS startups.

Admittedly, it’s not an easy undertaking. It requires expertise, hard work, and intuition. However, you can follow a few basic rules to ensure your SaaS brand is well-positioned and set up to thrive.

Set up branding guidelines

The secret behind every strong business is a well-thought-out branding strategy.

While, on the surface, a branding strategy may seem like a simple set of guidelines regarding your visuals, voice, and tone, it is so much more.

Video: branding 101, understanding branding basics and fundamentals

A branding strategy is key to ensuring your business is unique, recognizable, and memorable. It’s what will help you identify your potential customers, settle on the best pricing strategy for your business, and inform all of your future marketing decisions.

A defined branding strategy will allow you to connect with your audience. Just think of Coca-Cola’s marketing campaigns, which are all based on the emotional impact of sharing and togetherness.

Finally, great branding will compel people to invest in your SaaS products.

So, as you work towards building your startup, make sure that you know how to build a brand identity.

Invest in SEO, content, & social media marketing

Besides defining your brand’s identity, you must actively work towards reaching and converting clients.

SEO will help you:

  • generate organic traffic to your website
  • boost your brand’s authority and trustworthiness
  • spread the word about your products
  • minimize your advertising costs

And the great thing is you can implement SEO in several ways. On the one hand, you can choose to perform on-page activities like increasing site speed and optimizing for targeted keywords. Or, you can invest in strategic link building to boost your site’s authority and get closer to the top three SERP positions.

Of course, for SEO to work for your brand, you will also have to produce high-quality content. You should aim to supplement your marketing efforts with social media, which is an excellent place to reach audiences and strengthen your brand authority.

Set a paid advertising budget

Even though the abovementioned marketing strategies yield stellar results and go a long way they’re not enough on their own. Particularly not for startups that need to sell quickly to establish a cash flow and maintain their operations.

For this reason, you must set aside a portion of your marketing budget for paid advertising.

Running PPC ad campaigns will help you win more traffic to your SaaS website (and test whether your targeted search terms and unique sales propositions are efficient at attracting your audience and driving conversions).

Video: How Much Should You Spend on Facebook Ads? Budgeting Steps

Collaborating with influencers will allow you to expand your reach amongst niche audiences who might benefit from investing in your solution.

And re-targeting will ensure that you make the most of all the organic traffic you’ve generated through SEO and content, helping you establish your organization as a household name and allowing you to win more business.

If you’re unsure how much your advertising budget should be, one rule of thumb you can stick to is to allocate approximately 5–10% of your total revenue to paid marketing. Of course, keep in mind that these numbers should be flexible so that you can scale or cut back on marketing costs as needed.

Define KPIs

Finally, for securing the success of your SaaS startup through marketing, don’t forget to identify and track the key performance indicators that will tell you whether you’re doing a good job.

Monitoring metrics is not that difficult. However, by being diligent about it, you can ensure that you:

  • avoid unnecessary spending
  • have relevant data to base your decisions on
  • catch any unexpected audience reactions in time
  • are able to adapt your approach as necessary

Step #5: Delivering an Exceptional Customer Experience

The last step of building a SaaS startup in 2022 is paying attention to the customer experience you deliver.

An innovative software product and a stellar marketing strategy won’t do you good if your customers have a poor experience using it. So make sure you develop sturdy customer support operations, invest in onboarding, and, perhaps do your best to nurture customer loyalty.

That’s right. As you consider starting a SaaS brand, you need to be conscious of the fact that these companies deal with churn rates that can reach up to 50% per year. Know that you will lose a significant portion of the customers you convert.

So don’t let yourself drop the ball. Instead, consider everything you can do to make your software solutions indispensable to your clients.

Whether that means delivering an unmatched customer experience, consistently delivering new functions, or even teaching your subscribers how to get the most out of your products is up to you.

Building a SaaS startup: Wrapping Up

We guarantee SaaS to grow over the coming years. And getting in on the action is a great way to build a business with the potential to thrive.

However, keep in mind that with fast growth comes high competition levels and quickly evolving consumer needs. So be prepared because you’re committing to an intense pace and an all-in approach to building a SaaS startup.

By following the above steps, you can maximize your chances of success. But before implementing them, ensure you have a passion for the project. Getting you through the undoubtedly challenging period ahead of you will be essential.

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Ruhani Rabin

Ruhani Rabin being a tech and product evangelist for two decades. He was VP, GM, CPO for various digital companies. Obsessed with Generative AI now.