What Does a Validated SaaS Idea Look Like?

What Does a Validated SaaS Idea Look Like?
NamNguyenHai via Twenty20

At a Glance

Having a great SaaS idea is extremely important, but even more important than having the idea is to validate it. This will help avoid any pitfalls at a later stage when a large amount of time and resources have been invested in materializing that interesting idea.


There are no secrets to success. It is the result of preparation, hard work and learning from failure.

Colin Powell

While having a great SaaS idea is an important ingredient for success, validating it is equally important to avoid any unfavorable outcomes at an advanced stage.

There is intense competition in the market, no matter which field you are pursuing. There is no shortcut to success, but there is a way to go after your goals smartly. This holds, especially when it comes to the SaaS industry. With the annual industry revenue set to surpass $623 billion by 2023, the competition is heating up. In recent times, marketing a SaaS idea has become a real challenge as more SaaS enterprises optimizing their content for the keyword “SaaS” on Google. If you are an established SaaS entrepreneur and already have some experience developing a product from scratch, you know the struggle.

Why is it important to validate your SaaS ideas?

Sometimes you might feel that you have come up with this great idea, and you immediately start working on that. But months after investing a lot of time and money, the outcomes are not satisfactory. Being an entrepreneur, you are always looking for great market opportunities and ideas to build your SaaS product. But it is not very wise to directly jump into creating a SaaS product without proper market research. It is especially important to validate your SaaS ideas before developing and launching the product in the market. Your product should make a real change in people’s lives, and they should be willing to pay for it because the yearly churn rate for SaaS businesses serving small and medium enterprises ranges between 5% and 7%.

If you are a SaaS entrepreneur who already has a brilliant idea in his mind or even if you don’t have that one unique idea yet, this article will help you understand why you must validate the SaaS idea beforehand. One should have a proper estimation of the market, customers, competition, resources, struggles, etc., before moving onto the next step.

How to validate your SaaS ideas?

Here are a few guidelines that will help validate your SaaS idea and check if it can survive in the tough competition of today’s market.

Who are your ideal customers?  

If you already have an idea for your SaaS product, you have a rough idea of who will be your customers. There is always a target audience for a SaaS product. For example, if you want to build an e-learning app, your target customers are students and teachers. Another example is creating software for optimizing content like Grammarly, your target customers will be mainly the content creators, bloggers, marketers, etc. 

Before you move on to making a proper SaaS business plan, create a profile of your target audience and the potential customers. This will help you in the future when you plan strategies on how to preach about your product, email marketing, etc.

How strong and big are your competitors? 

You should know who your competitors are and the current SaaS applications in the market that consumers are using or talking about. This is not the point where you will compare your SaaS idea with the current competitors in the market. This is a rather crucial step to better understand the SaaS landscape of the domain you are interested in. You can have a better idea of the market if you conduct surveys asking questions like what the major apps are that they use, how much time they spend on those apps, and if they are looking for an alternative, can they spend a day without using any of these apps, etc.

Thorough market research on SaaS 

Proper market research is the foundation of a SaaS product. This is a rather lengthy process, and you do not want to waste your time hovering at the wrong points. So, to check your SaaS idea’s feasibility, set some research goals and make a set of questions that need to be answered. Always rely on well-known research sources to answer your queries. You should always have insights into industrial experts and CEOs of companies who have survived the competition for a long time. They will help you provide some perspectives you did not consider before or even aware they existed.

After you have gathered enough information, evaluate where you and your idea stand. Will your product make a difference, or need to shift from your main idea to create a more alluring target audience? Is the market opportunity big enough for your SaaS product? Can you beat the competition? These are some of the basic questions that need to be answered before making your business plan.

Is the marketing time too long?

Do not spend too much time building the product to find out people are not interested in paying for it. So, if you are going ahead with your SaaS idea after thorough market research, try to build and launch an MVP (minimum viable product) at the earliest. As soon as you will be the MVP in the market, it will be clear to you if there are enough customers interested in this product. After launching the MVP, feedback is very crucial. Ask some considerably basic questions to the people and see if it is worth building your SaaS product at all.

What is the cost of developing your SaaS product? 

If the people are not interested in buying the product, you need to work according to their feedback. Here are a few questions you should think of asking them.

  1. What is it that they want you to change?
  2. What are the problems they are facing with your software?
  3. Is your SaaS product useful or not?
  4. If the product cost is too high as compared to its usage?

If people are interested in your SaaS product, the next step is to evaluate the final cost to build the software. Make sure your product is not too complex. Because at the first stage, if you plan on a product that will perform too many tasks at a single time, the cost will escalate. So, try to keep it simple when you are going for the MVP. You should learn to take the baby steps first and not climb the mountain at the first chance you get.

Are people looking for a solution? 

Before building your SaaS product, you will want to know if your idea is on demand. To do this work, you can use tools like SEMRush for keyword research. You can find if your SaaS idea matches what people are searching for in Google every month by conducting keyword research. And, if you have the solution that they are looking for to solve a problem, BINGO! You can go on board with your idea as there is a target audience looking for a solution at the earliest.

The importance of validating your SaaS idea can not be overstated. By following the guidelines shared above, you can effectively remove the element of uncertainty from your business idea and invest your wholehearted efforts to make it a roaring success.

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