The reality of building the SaaS product — What we did with Deliforce?
Saas products are changing the world. They are the future of technology and development. Everyone involved in the IT industry agrees to the fact that the development of SaaS products will ensure better growth and boost your business. With this notion, all companies have been developing SaaS products, securing the path of the future. But is it as smooth as it seems? Get a real-world idea of developing a SaaS product and making it a success, with our first-hand experience.
We, I and my friend were IT professionals, doing a 9 to 6 job, we decided to launch our own Web and Mobile apps development company. Using our 10+ years of experience and our big dreams, we stepped into the IT world as entrepreneurs. With a grand success of the company in 3 years, 60+ employees, stable growth and revenue, it was time to move into something bigger. While you are bootstrapping IT service companies, it is difficult to get to the next level, after a certain point of time. You need to take a bigger leap to get to the next level. Hence, like many others, we ventured into something that was the future — SaaS-based product, Deliforce.
The idea and market survey
After we planned to move into SaaS product, it was time to analyze the market and full proof of our plan. Our existing company expertise in the development of on-demand delivery mobile and web apps for various industries. Be it on-demand food ordering, grocery delivery, eCommerce, Manufacturing, Courier delivery or any other industry, we knew how fast it was growing and the market is at its peak. This helped us with the idea of developing a SaaS-based last delivery management software, named Deliforce.
We carried out extensive market research and analyzed various existing products from the US and UK market, in order to gain knowledge and understand the basics of developing a SaaS delivery management software. This helped us gain in-depth knowledge before we took the big step.
The first major step of development begins with forming a well-experienced team. We formed a dedicated team of 7. The dedicated team is essential as product and service development is way different from each other. Hence, developers working on existing projects as well as SaaS product is not a good idea. The core team consists of:
Product manager (Partner and Co-founder) — 1
NodeJS developer — 2
AngularJS developer — 1
Android developer — 1
iOS developer — 1
UX / UI Designer — 1
After we formed the team successfully and had a clear vision of what we wanted to achieve, it was time for the hands-on. We thought of designing the product architect which scales to a million customers.
Going by the conventions, we spent more than 3 months to build the Minimum Viable Product (MVP) and performance test it. We tried with a multi-tenant concept. However, we failed to scale a million customers. This was a major set-back and unexpected. This was also costly since we were creating a database for each customer. Our next thought was to change the architecture itself and move to a serverless architecture.
Serverless product development
Going for the serverless product development had its own challenges. We spent more than 4 months to learn serverless architecture and gained basic development knowledge. After a comfortable known process, we started building the product with AWS serverless architecture.
Product development time
The product development time is quite long. We took almost 1.5 years to launch the final product to the market. Now we have an awesome SaaS application with the customer web application, Public API, iOS and Android apps for their agents.
Added digital marketing and BDE into Team
After the final product is ready to be launched, we added one digital marketing and one business development executive into the team, to take care of the marketing and sales activities, in order to promote Deliforce. This provided a much-needed boost to the sales and marketing activities of Deliforce.
Strategic pricing has a key role to play in the success of the products. Since we are new to the SaaS-based product industry, we thought of getting more customer with a free plan. Hence, we started giving 5 agents in the free plan. However, we charge $10 per additional agent.
We realized that, None of the customers are willing to upgrade the paid plan since we got many small customers, they are enough with the free plan itself. Then we decided to make the free type with one agent since AWS, Google maps and other resources bills are increased a lot! It gave the option to convert a few paying customers.
Facing the real customer
Immediately after the launch of our product, we got 10 customers in the first month, who are using the free plan. However, once they started using, they shared many real-time problems faced by them, which we were unaware of even during testing. We fixed all the issues and enhanced the product. These customers became real-time testers to us and we appreciate them at any time.
After 6 months of time, we had 300+ free customers and 5+ paid customers. At present we are getting $1000 USD per month from Deliforce. One issue we are constantly facing is that the majority of customers are asking for customization in SaaS product, which is impossible until they are enterprise customers. We received 3 enterprise customers, they tested and confirmed to sign the contract. Unfortunately, they all disappeared at the last minute. We had expected almost $5000 per month from them!
It almost took us 2 years to build a good product, market, test with a real customer and finally started getting our first $. Patience is the key. You have no shortcut or easy money.
We spent around $120,000 USD as salary of team, operation, server and marketing expenses. The earnings and profits from our IT Services company were mainly invested here. Since we planned to move to SaaS product, after being established as a mobile app and web app developers, initial investments were in our favor.
Started approaching the investors to scale the product?
Even after such dedication and efforts, the truth is we don’t have money to spend on marketing and sales. Hiring expertise in marketing and sales, the cost for digital marketing, Offline marketing, Adwords and many other expenses add up to a huge amount. Hence, we thought of pitching to investors and prepared the pitch deck to request 1M USD from investors. Initially, we started pitching to investors in our circle. However, all of them are asking to show traction. The irony is if we have the traction, I don’t think we need to pitch to investors!
Now, along with pitching, we are enhancing the product, marketing and enrolling the customers as what we are able to do. However, we still believe that if we can crack at least one good customer, it will help us grow exponentially.
Finally, we understood that without investment it is impossible to make the product a grand success. Either you need to invest from your pocket or get external investors. Now we are in track the find the investors who can help us in funding and guide us to bloom into a giant.
Though SaaS products are the future, yet there are certain underlying things which you need to take care of. Before you start, be prepared to invest $100–200k or have your investors ready. The USP of your product should focus on solving an existing problem. It is essential to have a dedicated team who has the patience, perseverance and a big dream. Finally, you have to wait for at least a year and a half or two to see the revenue.
Let's connect to discuss your SaaS product development. I am happy to share our experience with you! My Skype ID is saranraj84