How We Realized the Benefits of SaaS
We currently own and operate half a dozen SaaS businesses. For those of you who don’t know what that is. A SaaS is a software as a service business. The idea is that instead of paying a one time fee to buy software and install it on your computer, you pay a monthly fee. The software is web based and you essentially pay a subscription fee to use the software. The information is stored remotely and accessible from anywhere you have internet access. The benefits of SaaS are endless and we will look at what we love about them.
With the increases in internet speeds over the years, delivering software online has become more and more of a viable solution. While there are a number of benefits for users including instant bug fixes, feature enhancements, and web based access, the beauty of the model and the real benefits of SaaS are for the provider. When we started our first software as a service product we actually started out to build a solution that was better than an another software that existed. The software was a client side install. When we set out to build our own competing product we always imagined it would also be a client side application. You can read more about our successful online businesses here.
I remember the moment we realized we didn’t have to. We were looking for a developer or coding partner that would be willing to take a percentage of the revenue from our idea in exchange for building our software. My partner Bob and I met an eccentric character for a beer one afternoon. We chatted for a little while. The guy clearly wasn’t the best match for us. He proceeded to tell us how lazy he was and how he doesn’t like time-frames. All that aside he made an incredible pitch for the benefits of SaaS at the time. He said that anything you can do client side you can do in a web browser and you can do it quicker and more easily.
While this statement is clearly flawed in many ways, it is mostly true. Lets take a look in more detail at some of these benefits of SaaS. Here are 5 specific benefits of SaaS that show this as a far better solution than a one time single-sale software.
5 Actual Benefits of SaaS
Apart from being able to easily fix bugs in real time and make changes as you go, you don’t have to worry about operating systems and the host of other problems you may have after “shipping” the packaged software version.
You can easily pivot. If you aren’t selling or getting subscribers, you can re-market and modify the software functionality. You can change things in real time which makes your business flexible.
Revenue is recurring. If for no other reason this, in my opinion, is the most powerful benefits of SaaS. Recurring revenue grows. If you can retain users and grow your user base faster than they cancel, you have a giant snowball that continues to grow. When you go to bed the credit cards are charged month after month. It’s an automated money tree.
You control your users. Daily or weekly your users come to your site to login and do what they need to do. This means you have the potential to get to know them and find more about their needs or interests. Thinking about building something new? You have a captive audience who trusts you already. Ask them.
Up-selling a current customer is far easier than converting someone new. If you have someone satisfied with your product and paying you $10 a month, its far easier to have them upgrade to spend another $10 a month then finding new users. You can build additional bells and whistles for your software and upsell them to use these.
Hidden Problems of SaaS
There are exceptions to this model and there are flaws with a SaaS business. Building a SaaS is not easy. Not only are you trying to build something that people want, they have to pay for it. There is a big difference between wanting and actually putting in their credit card. Even once you know your product idea and have people willing to pay for it, you have to build it. For those of you who have done this before, you know its no small feat. You may spend 3,4,5 months maybe even a year building your software. You are at a point where you are willing to launch which hopefully is a minimum viable product and nothing fancy.
Great. You are done with your software so now its time to sell it. How are you going to do that? That’s right. You have to sell it now. You need a platform to do that. You need a sales site. You need somewhere to show all the cool features and address all the pain points your software is going to solve. You need to answer FAQ’s and you need to explain your pricing options. Phew that’s a lot of work you probably didn’t think of. Great there goes another month figuring that all out.
So you got that done and you actually have convinced someone to signup for your SaaS. How are you going to collect their money? Oh forgot about that also huh? I need a billing system and it has to be recurring and it has to notify users when their credit card expires and lock them out of the system if they haven’t paid. These little things add up and can be a daunting task. We actually have used aMember on most of our SaaS products which is an amazing software that handles all of this subscription portion for you and doesn’t have a recurring fee like other membership software products.
Don’t be discouraged by these problems but I want to be clear its not all peaches and cream building a SaaS. Apart from having to build an amazing software solution that people are willing to pay for, you have to build a fully functioning sales site and payment processing subscription site around it.
All this aside, the benefits of SaaS far outweigh the problems. Building a successful SaaS is incredibly rewarding. We are in love with this model and just may think its the best online business model around. Disagree with me? I know a lot of you build plugins or themes and sell them as one offs. I also know that informational products do incredibly well. Tell me why these online businesses are better than a SaaS? Is it even fair to compare them?
Are You Ready To Start Your Own Online Business?
Sign up now to receive our 5 Step FREE Crash Course to starting your own online store. Learn the tricks we have used with clients for years. Get started building your future now.
- FREE 5 Step Crash Course
- Designed For Beginners
- Receive our Resource Guide Instanlty
- Start Now By Entering Your Email Below