How to Validate Your Software as a Service Idea

What to Consider Before You Begin

Before you dive into this guide, you’ll need to understand the difference between SAAS and other forms of  app development. Software as a service (SAAS) is a method of software development that allows data to be accessed in a cloud by anyone with an internet connection. Now if you’re asking if your app idea is a SAAS project or custom app development project, ask yourself this: Does my software provide a service that I can monetize to my potential clients personal or business life? If so, then you have a SAAS project on your hands ! Keep reading and learn all about how to make the best SAAS app you can.

You’re still here? Great! Let’s continue. 

What is SAAS?

SAAS apps differ from custom development apps in that they house their data in the cloud and are relatively easy to create. Therefore SAAS apps take less time and cost less to build upfront. In this SAAS development, software vendors and creators host as well as maintain servers of data that can be used by potential clients. A great example of an SAAS build is Codelation’s  Where is That Food Truck web application that uses API’s to house location information as well as orders and menu software. This service based application has users pay a fee to and be added to the system. Another SAAS example is Microsoft Office 365, an online application that people pay to use and in return provides a service to them or their business. These applications are meant to be sold either in a subscription form or a one time payment (OTM) where consumers are given an access code that allows them to download the program from the internet. SAAS apps offer a service and platform to its users allowing them to monetize themselves or create their own work.

How to Validate your SAAS Idea

When validating these ideas, the premise is similar to other apps but much stronger: would people pay for this (and continue to pay for it)? If you are creating a custom software for people to use as a service to themselves and in return you are charging them for it, you have to ask them and yourself if it’s really worth it. 

Validating your idea is even more important with an SAAS project as your success solely depends on having consumers pay for your software to use it, if no one wants to pay for it, no one will use it.

Validating the cost vs price is also important. Asking people how much they would pay to solve a problem is a great way to gauge the price you should charge for your service. You can ask that like this. 

You: “What’s something you wish you could solve with technology”

Them: *gives example of something that they struggle with*

You: “Is there a solution you know of for this?” (you ask this to see if they have even looked for a solution) 

Them: “yeah but it costs $50 and that’s way to much for me, I would rather struggle”

BINGO! You now have your answer and you have a better understanding of your target market and their needs, all in one.

Real Buying Interest Vs Lukewarm Interest

When talking with potential consumers about your idea, one thing you should be looking for is real intent or interest to buy your product. Having ‘fake fans’ can be very harmful for your business and give you a false sense of security for your idea. People who are actually interested in what you have to say and will back that up with a commitment to purchase. They are then most likely to support your idea in the future over people who just like to listen to ideas.

Take your grandma for example, if she uses Facebook she is going to like all your posts and comment on everything no matter what, because she’s your grandma and that’s what she does. Now say you have a Facebook page for your business and you tell your grandma about it. What is she going to do? She’s definitely going to like, comment, and share all of your posts because she loves you and wants to support you ambitions and dreams.Grandmas are great and their support on social media is very kind and sweet, but be careful to not let that go to your head. The real supporters are people who are willing to make a sacrifice that will impact their lives as well as your business. Those people will buy into your product and support you on a more personal level.The people you do want are people who have real buying interest. Now, you might ask yourself how you gauge interest without an actual product?

1. Have them sign up for an email list for product updates, giving them inside access to the development process and release dates.
2. Ask them if they would be a prototype tester once the prototype is out or if they would do beta testing during the development process. 
3. Let them sign up for a pre-order list or early access list so they can be the first to get it when it’s released. 

If you can do these things to get people on board with your project and create your 100 allies, then you can prove you have a valid idea with real supporters who want to invest their time and money into your product. 

Market Research 

The second big part of product validation is doing market research. Understanding competition and the product space you are entering is very important to your development. When looking at other solutions to the problem you are trying to solve it’s important to observe what they did right or wrong and how their development process played out. Understanding the competition can be a huge advantage when it comes to entering the market because it can put you ahead of those people who may have failed by learning from their mistakes. 

Market research is also important because you’ll need to find out if there is an actual need for your service in the world. Do people need your product to exist or is there something already out there that’s better? This is super important because if you are creating a SAAS app that is to fulfill a need and you are the only one trying to create a solution, then it’s possible it’s not actually needed. It’s possible that your idea isn’t necessary because the problem isn’t big enough or does not warrant a technological solution. This doesn’t mean your idea isn’t valid however, but it can mean that the problem you are trying to solve isn’t big enough or isn’t worth investing your time and money into it. Where there is a need for something a solution can be found, but be wary that the solution may already exist. 

Define Your Products MVP 

The next important step in validating your idea is defining what your Minimum Viable Product (MVP) looks like. A MVP can look like a lot of different things but it should include your app’s key functions at the very least. An MVP can be as simple or complex as you require it to be for your app to function and perform its intended purpose. While you don’t have to actually build or construct anything, it would be good to have in writing or design what you would define as your MVP so when you present your ideas to a developer or potential customer, they have a good idea of what your plans for the project are and how you define what you’re looking for. 

Creating a Proof of Concept

One tool to help with the validation stage is having what is called a proof of concept or prototype. While this does not have to be a working model, it can still show how your service will work, what needs it will fulfill and how it will potentially look. A proof of concept or prototype of your app can be anything from a simple sketch of the app to whole wireframes and mockups in Adobe XD, there is no standard for what you can create at this stage to show to people so long as it is valuable to you and your business and will help to validate your idea.

Having a proof of concept proves to potential customers that you have a plan in place for what the app will do and how it will look. It also will be a good tool in getting people excited for its release as it provides a teaser to the final product. Having a concrete thing to show people can be much more influential than just an idea and if you are looking for supporters and potential backers, this is a great way to do it. 

Bringing Your Product to Life

Validating your SAAS idea can be very challenging as you may run into lots of roadblocks such as things you’ll have to change and update as you go along your journey. However, one thing remains constant, your idea is meant to be a service to help people. At the same time, to be successful your product needs to be something that people are willing to pay for and that you can monetize. If your service isn’t addressing a common issue for potential consumers then you won’t have any customers, thus why validating the idea is so important. Getting to know your potential customers, their wants, and their needs will help you be successful and create a better product.

Want to read more about the development and marketing of your software or SaaS? Check out these articles:

• Developing Your SAAS Tool
• Launching & Marketing Your Software or SAAS
• SAAS Development – A Guide for Founders