Only 8% of SaaS companies get away with this

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Only 8% of SaaS companies get away with this
At a Glance

Having a significant gap between a Minimum Viable Product and customer’s preferences can be detrimental to any SaaS start-ups growth plans. This is why enterprises need to invest in their tech stacks that will provide them the flexibility of making quick and prompt changes. Along with a minimum viable product, creating your own tech stack holds the key to success in the fast-evolving SaaS industry.

Failure is there to teach you something so that you can go beyond that. There is a lesson hidden in there

Irfan Khan

Why do 92% of SaaS companies fail within three years, even when the idea behind them is one of the greatest? This fact is staggering. It’s not a lack of growth or funding. One major reason behind this is the lack of product-market fit, and as a result of this, all the early start-ups are advised to find the right customers and the right market to serve. Many SaaS enterprises working in the early stage rely heavily on MVP practice, i.e., Minimum Viable Product so that they can change their products quicker when there is any sort of malfunction and thereby know what their target market and customers want. It often happens that the MVP becomes a lot of scripts and UI components, which are stacked together to try and test their new features and gather feedback from the customers and the target market.

When a SaaS enterprise achieves this product-market fit, they start investing in building a scalable and secure product. However, there is one issue which the companies might face here, and it is that the Minimum Viable Product and the product which is thereby expected by your target audience seems to have a large gap. However, if a business is favorable with enough capital conditions, it is still possible to overcome this condition, but this becomes harder during situations of low funds. Also, what one can do is keep the technology stack of the product in mind from the very start and keep it growing in sync with your business’s growth. What becomes essential for the organization’s success in the future during such circumstances is giving a serious amount of attention to one’s product tech stack.

What goes into building a successful SaaS product?

To build a technology stack, the enterprise must have a proper plan in place. Here are some important aspects of what goes into building a tech stack and ensuring its viability: –

·   Database

For a modern SaaS product, something which becomes especially important is a reliable, scalable, and secure database. Now, this becomes crucial because if this is not the case, the company might be in the process of incurring huge funds to fix their mistakes later. 

Self-Managed vs. Fully Managed

The self-managed option lets one have complete control over the company and, thereby, have a database that will exactly meet the demands of your customers and yourself. It is not an expensive approach, but what one is supposed to be paying here is his time, skills, and resources to achieve this. But if one does not have this available lot of resources, he can go for a fully- managed database, which many cloud vendors offer as a service. Here the organization will not have to take care of anything. But here, the drawback is that the cost incurred is too much, and the customization provided is not a lot. 


This aspect will depend on your product, the kind of data you want to get handles, and the interaction between the product and the data. SQL databases tend to have data normalization and ACID properties at their crux. The resources in this type are used very efficiently. The only disadvantage one may find here is the difficulty in selling it horizontally. NoSQL databases, on the other hand, are flexible. In short, if the data of your product seems to be well- structured, predictable, and rational, one may go for a SQL database; however, if the data looks highly unstructured, then NoSQL is what you might be looking for. 

·   Multi-tenancy

There is not only one customer who will be using your product, and for that, you need to design it so that it becomes compatible with the needs of other users. It is advisable to develop multi-tenancy in one’s product from the beginning itself. Its advantages include lower costs, efficient utilization of resources, easy maintenance, and upgradation. 

·   User-authentication

This can either be done by yourself or by hiring a vendor. This is not just about maintaining usernames and passcodes but also about encryption, anomaly detection, and vulnerability management, among many others. If the customers require a different aspect, one may also have to include multi-factor authentication. 

·   User-interface

Now, this is especially important to keep your customers intact. Here one can either choose from server-side or client-side rendering.  Choosing any of the ones will depend on the interaction your customer has with your product. If there is a high interactivity level, client site rendering is appropriate, whereas when the interactivity is quite static, the server-side option fits better. 

·   RESTful API

It is responsible for making the data of the database available to the outside world. Use HTTPS to encrypt data in motion. Have token-based authentication to confirm identity and control access. 

The stack should be one that fulfills your future growth. You and your organization will survive in the market only if you listen to your customers well and revert appropriately. A perfect tech stack requires an organization to get through the MVP practice and then proceed ahead at the same pace. So the choice is yours. Do you want to test waters and see if you are in the 8% or be prepared to make sure you are not in the equation itself!

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