How to Develop a SaaS MVP: Step-by-Step Guide for 2024

Some of the latest studies show that two-thirds of startups don’t make it even if they possess the required ambition and creativity. There is a need for more experience management knowledge on where to allocate resources or find a way to scale correctly. The best way to mitigate most risks is through a Minimum Viable Product (MVP).

Software as a Service (SaaS) has become one of the leading models of service provision due to its convenience. Industry experts are waiting for the SaaS market size to reach 295 billion by 2025. 

More and more businesses are moving to the cloud. Startups see this opportunity, so developing a solid MVP for SaaS is an excellent way to enter the niche. This article offers insights into the process of SaaS MVP development and ways to ensure the success of a SaaS solution.

Software as a Service is a cloud-based service delivery model. These apps do not require extensive hardware, installation, or complex setups. Service providers handle all these processes, while customers use a solution via internet access. It has advantages such as flexibility, scalability, and cost-effectiveness.

Launching a complete SaaS product puts high stakes, especially in the modern competitive market conditions where mistakes can cost you everything. However, if a company focuses on MVP development for SaaS, it sets itself on a strategic course. Building an MVP has numerous benefits and can solidify a company's future success.

Idea Validation

One of the most critical benefits of SaaS MVP development is the ability to validate a business idea. A startup can allocate some of its resources to building a basic version of its solution and showcase its functionalities. As a result, a company tests assumptions, peeks at market interest, and determines whether the idea is worth the money and time.

Suppose a startup chooses to use an MVP to test an idea. In that case, it can receive crucial information to make informed decisions about refining the concept and investing money in the future. For example, Dropbox started as a simple landing page that piqued users’ interest in the concept, allowing the founders to validate their idea and dive into the development process.

Attract Investors

As a rule of thumb, investors are more likely to fund startups that demonstrate actual market potential via real-world applications. This is why a decision to create MVP for SaaS software can boost a startup’s chances of finding investors and securing future growth through funding. 

An MVP helps companies stand out from the crowd and showcases their initiative. With a functional MVP (even if it’s a bare-bones version), a startup already has something to show potential investors and answer their questions. The same example of Dropbox comes to mind again, as the founders managed to get Sequoia Capital to fund their idea.

Faster Time-to-Market

Speed is one of the determining factors in a startup's success. That is why a decision to build an MVP for a SaaS startup can seize the market opportunity while preventing competitors from gaining a foothold in a particular niche. 

A company can achieve faster time-to-market by focusing on core features and streamlining the development process. With this approach, it is possible to start engaging with target customers and gathering user feedback to begin the iterative update process.

Advantage Through Early Adopters

SaaS MVP development also sets startups to cultivate communities of early adopters. This move can become a powerful tool for solidifying and shaping the solution’s future. Early adopters are the most enthusiastic user group that willingly provides extensive feedback. They also make great brand advocates and use word-of-mouth to expand their customer base further.

The key is to find early adopters through properly developed core product features, as it’s pretty easy to understand what a SaaS solution offers. Due to the service's very nature, SaaS companies can generate customers quickly, so it is important to capitalize on the advantage of early adopters. 

Step 1: Perform a Market Research 

Successful SaaS MVP development begins with in-depth market research. This is an imperative step that includes:

• Identification of target audience;
• Understanding of the user needs.

By understanding user preferences, pain points, and expectations, a startup can design a product that resonates with these factors and solves users’ pressing issues. 

The next step is to assess the market. Along with market size and growth potential, key analysis factors should include:

• Direct and indirect competitors;
• Strengths and weaknesses of competitors;
• Barriers to entry (regulatory requirements, costs, etc.).

With this information, you can build an entry strategy focused on your SaaS MVP strengths while mitigating the external environment's negative influence.

Step 2: Define Core Features and Technical Requirements

The next step in learning how to build a minimum viable product for SaaS is identifying the features and requirements. The main goal is to focus on critical functionalities that will form the core of your MVP—they will solve your users’ problems.

• Make a list of key features – focus on the things that will determine the main purpose of your SaaS solution;
• Exclude non-essential features – your MVP has to be cost and resource-efficient, so don’t let the feature creep into your project;
• Think about scalability – consider functionalities that you can build upon in the future and expand in later iterations of your SaaS MVP. 

Establishing technical requirements is necessary as well. A startup needs to select a proper tech stack to suit its needs. Here is an example of typical and popular modern tech stack options for SaaS MVP development:

Front-end:

• HTML/CSS – fundamental for structuring and styling web pages;
• JavaScript – a core scripting language;
• React, Vue.js, or Angular – popular frameworks for creating component-based UIs.

Back-end:

• Node.js – highly popular because it can handle asynchronous operations;
• Ruby on Rails – great for getting MVP to market fast because of development speed and convention-over-configuration approach;
• Python – is versatile and easy to use, especially when combined with Django or Flask frameworks;
• Java or .NET Core – great options for scalability and security for enterprise-level SaaS products.

Database:

• PostgreSQL or MySQL – highly popular relational databases;
• MongoDB – a NoSQL database suited for handling large volumes of unstructured data;
• Firebase – a popular option for SaaS MVPs for its simplicity and scalability.

Cloud Infrastructure and Hosting:

• AWS – the most widely used cloud platform packed with features and services;
• GCP – an alternative to AWS with seamless integration with other Google services;
• Microsoft Azure – a great option with high security and integration with the Microsoft ecosystem.

Step 3: Design the MVP Prototype

Designing a prototype is an important step in developing an MVP for SaaS. It serves as an actual representation of a product that a company can present to stakeholders such as users and investors. This step involves the creation of wireframes and mockups that demonstrate the functionality of an MVP and allow the company to:

• Refine UI;
• Validate design choices;
• Identify potential design issues.

DBB Software considerably accelerates rapid prototyping through the use of DBBS Pre-Built Solutions. Our specialists use this unique repository to:

• Create storybooks and test individual UI components in isolation;
• Use pre-configured environments to test prototypes in settings that closely mimic the real production ;
• Access reusable UI components to quickly enable a high-quality experience even during prototyping.

Step 4: Develop the MVP

The actual MVP development for a SaaS solution involves coding, integrating features, and ensuring product stability and scalability. DBB Software specialists use agile methodology and utilize sprints to cover every aspect of the development process.

Our developers achieve up to 50% faster development speed with consistently high quality using DBBS Pre-Built Solutions. Here is how MVP development changes with the Solutions:

• Pre-built architecture – we can deploy architecture almost instantly instead of building it from scratch, enabling our team to start the development process faster based on an architecture designed for scalability, security, and performance;
• App generators – our tools are designed to set up the skeleton for a SaaS application automatically. These generators assist our developers with creating essential elements of the future solution aligned with modern development standards;
• A library of UI elements – the repository features ready-to-use UI elements that are time-tested and align with the latest design practices, allowing our specialists to quickly build interfaces and focus on enhancing user experience;
• Third-party integrations – DBB Software developers can easily enable integrations with different CMS, CRM, authentication tools, payment gateways such as Stripe, and various API connections.

Step 5: Test the MVP

During this critical development phase, we ensure your SaaS MVP functions correctly and delivers a seamless user experience. Through thorough testing, we optimize performance, resolve issues, and confirm that the MVP meets your expectations.

DBB Software specialists also use DBBS Pre-Built Solutions to streamline the phase through ESLint, Prettier, SonarCloud, and integrated testing environments for:

• A/B testing;
• Unit testing;
• E2E testing.

Step 6: Launch the MVP & Iterate

The final step is to launch the SaaS MVP. However, a soft launch is worth considering instead of a full-scale release. This way, startups can introduce an MVP to a smaller audience, gather feedback, and fine-tune the solution before a more significant release. 

After receiving feedback, it is possible to begin iterating. This is the key to improving a SaaS product, as feedback loops inform companies about ways to improve their solutions. The iterative process is not limited to bug fixes – it can involve adding new features, performance optimization, and user experience improvements.

Building a SaaS MVP comes with its own set of challenges. Let’s walk through them to understand how to deal with them.

Choosing a Tech Stack

The most common challenge is to select a proper tech stack. Startup founders often weigh different options and try to balance familiarity with speed of development and scalability. That is why they usually use technologies they are most comfortable with to start developing an MVP quickly and smooth out the learning curve.

However, this approach can present challenges in the future. Speed is crucial for creating an MVP, but it is also required to consider scalability. Therefore, a company that wants to build a SaaS MVP should balance short—and long-term goals when selecting a tech stack. 

Getting First Users

Acquiring these first users is one of the toughest challenges that a SaaS startup can face. A new product without a solid reputation usually has no solid user base. That is why focusing on a targeted outreach is imperative to attract new customers.

To do so, a startup should consider building a solid presence exactly where the target user base “gathers.” This includes niche forums, social media networks, and communities with specific industry interests. There are other ways to attract first users – exclusive access, special pricing, and similar incentives work great.

Repeatedly Setting an Environment and Architecture 

A common pain for SaaS founders is the repetitive need to set up environments, infrastructure, and architecture when they try making changes or changing approaches to their MVPs. This time-consuming process distracts teams eager to focus on coding.

To solve this problem, founders consider using reusable templates and pre-configured setups. DBB Software similarly uses the DBBS Pre-Built Solutions, as they are equipped with ready-to-use development environments and architectures to jump into coding immediately.

Balancing Learning and Development

One of the biggest debates in the SaaS MVP development is whether to invest time into learning technologies or hire contractors for the development tasks. The reason is simple – founders want to grow personally and professionally but must deliver their product to the market as quickly as possible.

However, outsourcing the development to a team of experienced professionals offers speed and efficiency advantages. DBB Software has rich experience in developing SaaS solutions and MVPs, and our developers achieve up to 50% time reduction in the development process through the use of Pre-Built Solutions.

Code or No-Code Approach

Another issue that SaaS MVP founders face is deciding between code-based or no-code approaches when creating solutions. This challenge becomes especially apparent when individuals have to work with limited resources and tight deadlines.

While a no-code solution is a viable option that enables founders to focus on the product’s core idea, it has its limitations. A code-based approach offers more flexibility and enables scalability to an MVP, which plays a crucial role in creating a solution aimed at long-term success.

Lack of Guidance

Many entrepreneurs need more guidance on developing SaaS MVPs. They state that it is challenging to navigate the complexities of creating a complex solution without a roadmap and/or resources to address their needs.

While there is no universal answer to this issue, entrepreneurs suggest answering the following questions:

• Who is on your team?
• How will you get the word out about your product or service?
• What is your vision for your business?

Other ways to solve the problem of the lack of guidance are through targeted guidance such as online courses, consultations, etc. Another solution would be to use frameworks explicitly created for SaaS development, but they are not readily available for the broader audience for the most part. The final solution is hiring specialized contractors to develop an MVP.

Despite all the challenges, there are proven ways to secure the future of a SaaS MVP. This is not something kept secret from the public, but general tips that work due to their simplicity.

Think About the Value Proposition

A clear value proposition communicates why your product is worth the attention of potential users. The most effective way of building a value proposition is through:

• Identifying the specific problem your SaaS solves;
• Highlighting how your MVP is unique and/or better than the existing alternatives;
• Communicating these points to your target audience to touch their pain points.

In combination, these steps ensure that your target audience is fully aware of your value proposition. They will understand what to expect from your solution and how it will address their unresolved needs.

Create a Software Design Document

With a clear roadmap, any company, regardless of size, can organize itself effectively to work on a SaaS MVP. If all the stakeholders, including the developers, designers, or investors, know where they are moving, they understand what needs to be done.

In this context, DBB Software specialists use a Software Design Document (SDD). This document outlines lots of things, including:

• System requirements;
• Technical specifics;
• Key features;
• Work processes;
• Tools to be used.

By creating an SDD, our developers inform clients about the technical decisions they are going to make and how they align with the final vision of an MVP. This document also improves the quality of communication between us and our clients. 

Gather Feedback and Update

Gathering feedback from users is essential after the initial MVP launch. This information drives a solution's evolution and helps companies understand how users interact with products. Therefore, gathering insights provides valuable data for identifying areas for future improvements and allows focusing on features that drive the most value.

To do this, it is better to set several key metrics and gather analytics. In terms of SaaS, companies should consider the following:

• Monthly recurring revenue;
• Churn rate;
• Daily/monthly active users;
• Customer lifetime value.

There are widely known ways to speed up SaaS MVP development. Also, each company has its trick up its sleeve. Let’s explore how to develop faster using the Agile approach and DBBS Pre-Built Solutions.

Follow Agile Methodology

Agile methodology has become a standard for software development. This approach's core is delivering high-quality results in small and manageable increments. The concept itself offers several benefits:

• Handling changes in requirements;
• Fault detection;
• Increased performance;
• Iterative and incremental delivery;
• Flexibility in design;
• Quality improvement.

DBB Software also uses the Agile approach when working on projects, providing the highest degree of flexibility and control while consistently delivering outstanding results.

Use Pre-Built Solutions

Our team effectively speeds up the development process for MVPs by up to 50% through DBBS Pre-Built Solutions. These are ready-to-use components that include:

• Web, mobile, serverless, and server-based app generators;
• Ready-made cloud hosting settings;
• Built-in testing tools such as Cypress, Playwright, and Detox;
• Code quality solutions;
• Integratable CMS, CRM, authentication, and payment systems;
• Reusable UI components.

Combined, these solutions speed up time-to-market through improved development speed. Our developers can focus on the most critical aspects of SaaS solutions and integrate readily-configured elements to save precious time.

DBB Software assisted Uniform in promoting its SaaS platform for composable digital experiences. Our main tasks included developing demo and promotional websites and bringing quality-of-life improvements to the client’s platform. 

Challenges Faced

• Boost the scalability of the in-house team for marketing projects such as new websites and R&D projects requiring PoCs to derisk investments.
• Improve the client’s platform's functionality by implementing feature and tool integrations.
• Advertise the platform to potential customers through demos and promotional websites.
• Migrate projects to new React Server components for better performance.

Solutions Implemented

• Demo websites: our team developed web portals to showcase the platform’s live editing capabilities.
• Marketing website: we created a dedicated website with user-based personalization, analytics tracking, and flicker-free A/B testing based on the client’s Uniform platform.
• Project migration: the team migrated projects to React Server components to improve performance.
• High-performance CLI: our experts created a CLI to export separate apps from monorepo.
• SSR-SSG mechanism: we developed a mechanism to switch between SSR and SSG rendering models via CLI.
• New integrations: DBB Software specialists developed high-architecture solutions to connect the platform to various CMS, PIM, search engines, and DAM.

Results Achieved

• Launch in 1 month: the first version of a promotional website in record time.
• 2-3 integrations per month: created and implemented by our experts for the client’s SaaS platform.
• 90+ performance score: achieved on Lighthouse metrics.
• Product development roadmap: created in cooperation with DBBS specialists.

SaaS slowly but surely becomes a dominant way to provide services. This is the biggest reason why this direction is experiencing such a rapid evolution. Below are the most prevalent trends in the future of SaaS that are applicable to MVP developers and fresh startups as well.

Adoption of artificial intelligence

AI is already set to revolutionize the way businesses operate. The technology offers personalized user experiences, intelligent automation, and advanced analytics. Regarding SaaS products, we can expect features such as chatbots, recommendation engines, and predictive insights to become a standard for these solutions.

Focus on Data Security

Security standards are continuously rising due to increasing cyber threats. That is why compliance with regulatory requirements such as GDPR and CCPA will become a priority for SaaS providers. Points of interest will include encryption, authentication protocols, and compliance tools. These measures will also build customer trust in SaaS.

Rise of Vertical SaaS Solutions

Horizontal SaaS is the traditional approach to the product that serves a broad audience. However, this niche is slowly saturating, and we will experience the rise of vertical SaaS products. They will focus on providing highly specialized functionalities for specific industries to open new markets with their requirements.

Technological Integration

Integration is everywhere. Businesses that use SaaS solutions often go for numerous other products that should work together. That is why the ability to integrate with other platforms is becoming a critical requirement for SaaS providers. Clients want solutions to create interconnected systems, and SaaS startups now build highly connective products.

Flexible Pricing Models

Traditional subscriptions are transforming. Companies such as AWS offer a pay-as-yo-go pricing model that users find highly attractive. SaaS companies also experiment with this approach and freemium and hybrid subscription models. This tendency will allow smaller SaaS startups to adapt to varying markets and business needs.

Building a SaaS MVP from the ground is a challenging task. It requires a systematic approach to consider all factors influencing the final product. However, the solution allows startups to validate their ideas and build strategies for completing their SaaS products.

DBB Software knows how to overcome the challenges that startups face when developing MVPs. We also use DBBS Pre-Built Solutions to speed up the development process by up to 50%, ensuring faster speed-to-market, which is crucial for startups. 

Contact us to receive a consultation and a Software Design Document to start building your SaaS MVP.