By Thomas MEVEL in Discovery — Jan 22, 2023

Do Not Build A SaaS

Build towards having a SaaS.

If you have read our article 'What is SaaS' you know our position is about building a full-blown SaaS for your service business.

The summary is we strongly believe that NO, you shouldn't. But also think that you should build towards it.

In this article, we'll get slightly deeper into why we believe that.

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Before we start, this article is addressed to non software businesses. If you are considering building a brand new SaaS company, this likely won't apply, though you may find it useful.

The only time you should build a SaaS

The only time we would say, yes, go ahead, build a full SaaS solution from the start is if you are looking to fully move towards being a Software Business / SaaS provider and have the resources to do so, either by shifting your full business or by creating another separate entity.

Though even then, there are some caveats to consider, read below ...

Why you shouldn't build a SaaS at all

Is it really what you want, to possibly move away from your currently successful to an uncertain future?

Building a SaaS takes time, commitment and a completely different skill set than what you may be used to, especially if you are a non-technical person. But, even then, multiple things are to consider, here are some of them.

Your current client may not be users for your SaaS

That is one of the main misconceptions. I got to experience first hand. Clients of your services may not be users for your SaaS.

That seems weird, but it is linked to a different set of expectations. You may think there is no difference especially if your software delivers the same results as you are. But for your client, there may be multiple factors at play:

Transitioning from a full service to a SaaS means change. And change can be scary, it involves work and uncertainty. It requires adapting processes, and that is not something that will happen overnight.
Using a SaaS means becoming more active. Depending on the service you offer, clients may not have to do anything to see results. Moving to a SaaS is quite different. It may be expected from them to become more active in the processes. And that is not straightforward.
There is a deeper distinction to make once moving to SaaS. When delivering services you are sort of becoming partners with your client. You both work together to reach your clients goals. With a SaaS, the relationship changes to more of a provider-customer relationship. And in many cases, who you view as the customer won't be the user.

Streamlining your whole business into a SaaS doesn't mean your clients will follow suit.

Pricing

Shifting to being a SaaS platform means productizing your services and as a result possibly loosing some value in the eye of your clients. Things done by computers tend to have a lower value in the customer eye. That means that you will likely have to adjust your pricing and loose income.

The the long, slow SaaS ramp of death

That's related to the 2 points above and refer to how quickly can your income grow for your SaaS. I will direct you to those articles for more details:

The summary is : it will take time. Growing your customer base will be slow and even if it can feel like a success, it may be an illusion. It can feel painful and take a while for things to take off. There is a silver lining once you reach a certain point, things will be great, the question is how quickly can you get there.

A different skill set

That's especially important if you are not already using software to perform tasks in your service delivery.

Becoming a SaaS provider means transitioning to building software, becoming more technical. There are ways around it, from no-code to outsourcing development, or others, but you have to ask yourself a fundamental question: Is it (1) worth it? (2) a change that you want to do? and, if so, how quickly?

A SaaS is more than just building a software

Yes, software is what you see when being a SaaS user. But a real SaaS business is much more than that, both technically and non-technically.

On a non technical aspect, you have to think about everything that will change with a SaaS. How will you sell it? Market it? Deliver it? Customer Support? ... Things that you probably do to some extent in your current business, but they will change in some ways :

Your work may have to shift from being project based to offering recurring benefits. Meaning before, a 1 month engagement would be lasting 1month. Now due to the nature of the work, it may have to evolve to something recurring. Customers will want value for as long as they are paying.
You will have to develop processes handle a growing number of simultaneous users.

While also introducing a lot of potential technical headaches to deal with.

A SaaS software is a fragile machine. You have to take care of it and make sure there is no issue.
You'll have to consistenly balance between old and new. Build new features to provide more value but also improving, fixing, maintaining the existing ones
Security risks, making sure your client are safe
...

As similar as it looks from the outside, providing a SaaS application isn't the same as running a software on your computer or phone. A SaaS provider takes over the responsibilies from its users. Their are ways to mitigate risks but you can't remove it.

Users will forget, not forgive easily

They will forget your product but remember the deception. If they encounter some issue : it doesn't work as expected, they loose their trust in it, ... it is very likely that they will move on to another one that fits better.

Think about how you behave, unless you're force to use something specific, if for any reason the product in itself fails you, what do you do?

Once a customer has moved on from you because a bad experience, it will be hard to convince them to come back because of both the initial disappointment and the cost of switching, again.

What will make you stand out?

That's worth exploring, why should people use your SaaS? what makes it different? what makes it better? Can your services' USP (unique selling proposition) translate to the software world?

Saasify your process

Here is a suggestion, instead of going all-in on building a SaaS, a better approach is to simply slowly work towards it, what I call Saasify. A process where you introduce software in your practice, the same way you would do with a SaaS, but progressively, mindfully and carefully.

I will get into more details about those various topics in other articles.