If you are looking for a profitable startup idea for a SaaS business, it’s essential to be armed with guiding information. This article will outline the key steps that can help you find your next successful business idea. So let´s get right into it!
The 5 Requirements for a Profitable SaaS Startup Idea
For a software as a service (SaaS) business to be successful, it’s crucial to understand the requirements for a profitable idea. For your idea to have the best chance of success, it should meet the following requirements.
Discover a Real Problem You can Solve
One of the most essential requirements is that your business offers a solution to a real problem. The problem must be worth solving, and there must be enough people who have the problem and are willing to pay to have it solved.
Define a Growing Target Market
Another requirement is that the business has a well-defined target market. The target market should be defined by characteristics like size, demographics, and needs.
Make sure, that your target market grows. Serving a growing market is important for a startup because it allows the startup to capitalize on the increasing demand for its products or services. This increased demand can increase sales and, ultimately, increased profits. Additionally, serving a growing market can help a startup achieve economies of scale, leading to lower costs and a more competitive product or service.
Create a Competitive Edge
A startup needs a competitive edge to differentiate itself from its competitors. A startup can capture more of the market and potentially increase its profits with a strong competitive advantage. A competitive edge can be created through various means, such as having a better product or service, lower prices, better customer service, or being first to market. A startup can improve its chances of success and become more successful than its competitors by having a competitive edge.
As an example, I would like to mention my product Finmods SaaS. It´s a financial excel model for SaaS startups that allows you to build a complete financial plan in 1 or 2 hours. My competitive edge is the One-Screen Assumptions page, where you find assumptions and results on one page. This enables you to build a solid financial plan with the power of your intuition.
Find a Business Model with Revenue Potential
Your idea needs a solid business model. The business model of a SaaS startup revolves around providing software as a service to customers. This usually involves selling a subscription to the software, allowing customers to access and use the software from a remote location.
The revenue potential is the estimated amount of money a company can generate from a product or service. To assess this, companies often look at how much similar products or services have generated in the past. They also consider how much it would cost to produce and sell the product or service and how many people are likely to buy it.
Develop Your MVP Quickly
A common approach to developing an MVP (minimum viable product) is to identify the key features of the product or service that are most important to the user and then focus on developing a prototype or MVP that delivers those features.
It’s also important to keep in mind that an MVP should be as simple and lean as possible to be tested and iterated on quickly.
Building your MVP should take you no longer than 2-4 weeks. However, coding an MVP from scratch can be very trying. To save money and time, you could consider no-code tools like AppGyver (free!), Bubble, or Buildfire.
11 Ways to Develop Your SaaS Idea
Now that we know the requirements let´s discover eleven ways (plus a fancy bonus) to get your creative juices flowing.
Listen to People
Startup ideas can come from various sources, but one of the most common is listening to people. By understanding what people want and need, startups can identify new products or services opportunities. Listening to customers also helps startups gather feedback and learn about potential problems with their products or services.
Identify the Pain Points
The first step in identifying the pain points of a target market is to understand what the target market wants and needs. Once you know what the target market wants, you can identify what they are struggling with or what is causing them pain. Then, once you have identified the pain points, you can work on developing solutions to help alleviate those pains.
Discover Passions
There are a variety of methods that can be used to determine what people are passionate about. One way to do this is through surveys in which individuals are asked to indicate their level of interest in a particular topic.
For example, you could join a community like Indie Hackers, which I´m a big fan of, create a post, and insert a poll. In my post “Can a Blog be the Launchpad for Your SaaS Business?” I did this. From only 55 views I got three votes and 11 comments within a few days. I´ve never seen a more active and supportive community in the online space.
One of the best ways to discover passions is to research keywords that people ask search engines like Google. When people enter a search term on Google, they always tell the truth because they want a helpful answer. My favorite keyword research tool is WriterZen, for which there is now a fantastic lifetime deal on AppSumo for only $79 instead of $1,035.
Another approach is to analyze the content of social media posts to identify keywords or topics that are mentioned more frequently than others.
Research Competitors
One can use various methods to research competitors, including reviewing public filings, such as annual reports and 10-K filings, surveying industry analysts’ reports, conducting online searches for company and product names, and subscribing to or reading trade magazines.
Tip: subscribe to free newsletters of competitors to discover their product funnels.
Other ways to get information on competitors are contacting people on LinkedIn and asking them a question, attending industry events, and meeting with people who work at those companies.
Read Product Reviews
Startup ideas can be gleaned from product reviews in a variety of ways. One approach is to look for common problems experienced by customers. This could include issues with the product itself or the customer’s experience using the product.
Another approach is to look for opportunities to improve the product based on feedback from customers. For example, if customers request a feature that is not currently available, that could be turned into a new startup idea. Check out these websites for reviews: G2, Product Hunt, Amazon.
Hang out in Online Forums
Finding startup ideas by hanging out in online forums is a great way to get a feel for what people are struggling with and what they are looking for help with. By reading through the posts and responses, you can get a sense of what people are struggling with and what solutions they are looking for. This can give you an idea for a new startup.
Visit Marketplaces and App Stores
App stores can be great resources for finding startup ideas. By browsing through the various app categories, you can understand what types of apps are in demand and what might be worth exploring further. Additionally, you can look at the top charts to see which apps are currently popular. This can give you some ideas for apps to build or improve upon. Check out these app stores: Google Play, Apple App Store, Shopify, WordPress, Airtable, and Notion.
Research on Google
Another way to research startup ideas is to explore what people search for on Google. This can be done by using the “Google Trends” tool, which allows you to see how often particular terms are being searched for. You can also use the “Google AdWords Keyword Tool” to get information about how many people are searching for a keyword each month and the average cost-per-click for related ads.
Serve a Niche of an existing large Software Company
Finding a software niche is essential to success in the software market. Niches exist for every conceivable type of software, and finding the right one for your product can be the key to success.
To find a niche, you need to understand the needs of your potential customers and identify a gap in the market that your product can fill. You also need to clearly understand your competitive landscape and what makes your product different from the competition.
The best way to make a product unique is to focus on its unique selling proposition (USP). A company can create a fantastic product by emphasizing its features and benefits not found in its competitors’ products. It is also essential to differentiate the product in the minds of consumers through effective branding and marketing.
Productized Services
Productized services have been stripped of their customization and personalization, leaving only the essential elements that make them a service. This allows for a standardized offering that can be sold as a product. The goal is to make the offering as easy to purchase and use as possible, without any need for additional customization or support.
There are a few different ways to develop startup ideas for productized services. One way is to look at industries ripe for disruption and identify areas where there are a lot of inefficiencies. You can also look at places where you have a lot of personal or professional experience and see if there is an opportunity to create a service that can help people solve a problem.
Examples of productized services include creative design services, content writing, bookkeeping, online chat, personal finance, and web design.
Before I started selling my financial excel models, I spend some time on Fiverr to learn more about my targeted customers; you can see two of my Fiverr gigs below.
Solve One of Your Problems
You have a potential startup idea whenever you solve one of your problems. To solve a problem, one must first identify and understand the problem. Once the problem is understood, a plan of action can be developed to solve the problem.
The action plan should be logical and concise, and you should follow through until the problem is solved. Finally, it is essential to evaluate the solution’s effectiveness and make any necessary adjustments.
Bonus: Try it with AI
If you want some inspiration, check out IdeasAI. All startup ideas there are completely generated by GPT-3, which is artificial intelligence, built by OpenAI.
Conclusion
There are a few key things to keep in mind when looking for a profitable SaaS startup idea. First, make sure that your idea meets the minimum requirements, like finding a business model with enough revenue potential. Second, get your creative juices flowing by using the suggested methods to discover a great startup idea. And finally, make sure you have a clear value proposition that differentiates your product from the competition. If you follow these tips, you’re on your way to building a great startup.
Peter is a solopreneur in Salzburg, Austria, a husband, and a family father. He runs a little publishing company, and blogs about starting and running online businesses. In his spare time, he enjoys hiking with friends and reading the Bible, and sometimes he takes a trip in his roaring old black 2001 Jaguar XJ8.
