Product validation: How to build enterprise SaaS products
Product validation: How to build enterprise SaaS products
Starting a SaaS business might seem like a good decision now that the software market is booming, but things could turn sour quickly. About 50% of startups close down within their first five years, partly due to not having good-enough fit products or well-enough focused markets.
Similarly, applications that bypass the product validation process consume a lot of resources and time only to be rejected by the end-user. As such, it is essential to conduct due diligence on any SaaS ideas to avoid the cost of developing and redeveloping applications every other time.
Validating your SaaS product first begins with identifying what needs to be validated. Some of the key categories to validate include:
Every entrepreneur believes they have the next big innovation, yet it's not the case in many situations. Product validation is a process in the product development cycle that helps you know whether there is a demand/need for a specific SaaS product or product feature in the market. Essentially this tells about your understanding of the customer's pain and your ability to translate that pain into a feasible and actionable solution.
The approach depends on product type and time constraints. All in all, the validation process helps you figure out critical factors like:
Although business is about taking risks, it is sometimes better to take calculated ones to meet your bottom line. When developing SaaS ideas, a tested and proven framework always trumps the "figure it out on the way" attitude. Here's a summary of what you need to do continuously to develop the right SaaS ideas:
The ideal markets for your SaaS business are customers who show interest in your product and are likely to purchase. Create a persona or perfect customer profile that includes their name/title, bio, motivation, and character, and try to formulate a hypothesis to get to know them better. In this case, for your SaaS enterprise products, these are companies with 100 or more employees.
Once you identify the target market, it's time to evaluate their problems to know whether your software can solve them. For successful founders or product leaders, the problem-space vision usually comes from deep experience or empathy. This is also the one part that you cannot outsource. The problems need to be sufficiently significant, and they can be related to one of the following areas:
For many enterprises today, this could be related to security, data management, compliance, workflow efficiency, or integration. Nowadays, technological solutions aren't usually the problem, but rather their interfaces with people and processes. How might you help with that?
Some problems enterprises face require straightforward SaaS solutions, so ideas may flow naturally, while others are more complex and need a bit of research. The best resources to help you get started with brainstorming solutions are:
Some of the ideas you obtain from validation will be viable, while others won't. Consider the more profitable ideas or the ones you capitalize on with the current industry trends. Ask yourself:
Plus, with tools such as Google Keyword Planner and many other keyword research tools, you should have no problem getting enough information on any business idea. It is usually also a good idea to share your thoughts with someone who matches the customer persona or has deep experience.
A while back, conducting a product validation without a minimum viable product was tough. Luckily, technology has facilitated the rise of techniques other than SEO to help validate SaaS enterprise products.
Audience validation involves validating how big of an audience your product has. There is no better tool for the job than Facebook, with over one billion users on the platform. You don't even have to advertise directly at this point. Instead, you can use the Facebook Campaign Builder to estimate your potential reach when advertising.
Surveys, through questionnaires, help validate whether your assumptions of the audience's pain points align with what they're facing on the ground. However, this survey is purely informational as it doesn't translate to monetary value.
Competition is crucial to the validation process, especially when developing new SaaS products. The good thing is that there are many online tools to help you with this type of validation, including:
Remember, finding similar products in your niche instead of none is positive, as it shows a willing and able market to purchase.
This is my personal favorite. The sample group method involves organizing a group of 10 contacts to provide feedback on your products, whether in person or online. But, of course, the best way to know you're dealing with a serious bunch is to ask for a monetary commitment for the product up front.
People naturally land on a landing page whenever they visit a website. You can use your landing page to gauge validation through prior commitments like email signups. To get people to your website's landing page, advertise on social media or arrange for paid advertising.
The more people land, the better validation you get on the product. Don't forget to use persuasive words such as "get on the waiting list" for people to take action.
The best way to launch a product is to get validation on your business idea so you can know whether to allocate more resources. Then, make sure your product offers solutions to real-time problems enterprises face. Even though this blog provides some high-level ideas and alternative ways to validate your product or business idea, it's usually a good option to get support from someone who's done it successfully before.
When it comes to product validation, don't be afraid to leverage as many tools as possible to get insight into the market. At Coventures, we carefully approach every client's validation as we know it could make or break your business. Visit our website today for more information on our market validation process.