8 Incredible Hacks To Make Your SaaS Startup A Success

8 Incredible Hacks to make your SaaS Startup a Success

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It seems like kicking off a Startup has emerged as a new hobby these days? Anybody who has got some bucks in his accounts comes up with an idea and opens up his own company…

Well, to me it LOOKS the same!  People need to put a full stop to this new activity and think wisely before entering into any market.

Software-as-a-service (SaaS) is an emerging business model which is increasingly prevailing in both B2B and B2C markets. SaaS business models are comparatively easier to start and also require relatively less amount of capital.

That’s the reason a whole lot is going crazy over this model and you see a lot of people opening up SaaS businesses.

But my dear fellas, it’s frankly not a piece of cake at all!

One needs to consider many aspects before entering into this market and thinking of a solid business idea.

Your business model needs to cater a ‘Pain Point’ of the market. A need which has not been fulfilled. Otherwise you’ll just be another startup selling the same old products and paying everything from your own pocket even after a year.

However, through using some amazing strategies, SaaS companies have the highest chances to become successful startups these days.

A person who aims to open up a successful SaaS startup should be confident about certain outcomes first so he doesn’t enter into a wrong market or makes a loss through a wrong strategy.

Here are the five useful metrics that a startup needs to confirm before starting its operations:

1. Gross Margin

When thinking about kicking off a SaaS startup never forget to look at the gross margins of the business model you are going in to.

The gross margin is basically the amount of revenue retained by the company after subtracting the cost of goods sold (COGS), mostly measured as a percentage. It tells the business that how much hold it has in setting up prices.

Researchers tell that the best SaaS companies at scale are going to have 80-85% gross margin on software, and on services anywhere from 30-70%. It really depends how strategic the services are.

Gross margin for your startup should be compared with the industry trends.

Example show Hubspot’s Gross Margin comparison to the industry figures.

This explains that you pretty much control your pricing in SaaS businesses if the model is properly built. Make sure you create a beneficial model and then earn higher margins from it.

2. Customer Acquisition Cost (CAC)

Another criterion is the customer acquisition cost, which is calculated by dividing total cost spent on acquiring more customers by the number of customers acquired in the period the money was spent.

Your funding and payback period is directly related to each other.

You really need to know what exactly you need to earn higher gross profits and to get the return on the acquisition cost.

After scaling your marketing efforts, the SaaS company pay out less as customer acquisition cost than the competition.

3. Churn Rate

The other big criteria is the SaaS Churn Rate or usually known as Customer Turnover in the SaaS business model. One needs to measure how much churn rate a particular software or service business has. If it is higher, so the risk in the business will also increase. It depends on the person that how much he wants to put at stake.

Example shows the impact of churn rate on SaaS growth.

As seen by the current market, SaaS business models do not have much churn rate, in fact they have high retention rates where customer stays back. Reason being the new digital marketing strategies, retention policies and the attractive offers like promo codes or coupon codes.

SaaS founders should also be measure their dollar retention with the customer retention.

Paras Chopra explains churn in an awesome way, “Churn and active product usage is the metric a SaaS company should be super-obsessed about.”

4. Annual Contract Value

Annual contract value basically tells us to look at how quickly a company is adding new contract bookings. This helps in separating new contract booking from renewal bookings and takes out an annual contract value.

This measure helps us to see the future proxy of the startup one is thinking to pursue. This gives an idea of how the business would be doing on revenues.

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5. Sales and Marketing Efficiency

Along with the above explained measure, one also needs to look at the Sale and Marketing efficiency of the future startup.

How much sales and marketing efforts will be required, what kind of strategies need to be adopted and what costs will be incurred.

On average, the SaaS company sales efficiency tends to decrease with time.

Now after talking about the criteria which one needs to look before entering into the market, I will be moving on to some tips which should be adopted to make your SaaS a successful one.

Here are Eight Useful Hacks to make your Startup a Sure-Shot Success:

1. Offer a Compelling Story:

Always remember to have a compelling story or the idea behind your startup. Never enter a market with a loose script. You’ll go step back like a failure in that case.

Search about the Pain Points of the industry, look in how they can be sold and then work forward towards your success. A loose script won’t give you much for longer.

Example shows the success story of Canvas.


Customer buys your stories not your products. Every product has a story behind it. Find a one which is catchy and which will serve a large market.

2. Cater a Large Market for your SaaS Startup:

Assessing your market is another aspect in which one needs to master at.

Software-as-a-service models seem like simple, plain and precise models but when the whole bandwagons of stakeholders start building then the market keep on getting larger and larger.

There is a great deal of effort behind a SaaS business model as well.

The thing you should be sure about is that the market size should be broader in order to have more choices, more clients and more flexibility to move around in.

Or else you are left with very few options.

Try offering a platform to your clients. SaaS based services often consist of platforms like salesforce.com and many other. See how iTunes has given an online platform to users.

3. Create the Right Sales Structure:

Today, we see a variety of business models in SaaS domain. We need to think wisely before designing the sales structure. The sales funnel should be optimized, timely and efficient to get the returns on money invested.

It is being told that you should never argue with your customers about how they want to buy your product/service.

SaaS model companies shouldn’t really finalize on what sales process they should run, they should always let the customer be content with what they’re offering and later they can decide on what the customer needs, ALWAYS keep altering your sales process.

Startups should build their sales structure around the needs of the customer, spending time with the customers is the best way to develop a structure that will work for your market.

Example of sales structure used at HubSpot.

4. Be a Core on the Web:

Software-as-a-service providers can also be called Web publishers. These Web publishers deal in different online activities like news, games, e-commerce, or a simple blog.

Here’s what you need to know:

They are majorly concerned with increasing their site traffic and converting that traffic to registered users.

And the Web, there is one and only one source of site traffic which is links. You can get those links from search results, search ads, banner ads, websites, blogs, feeds, widgets, bookmarks, toolbars and various other ways.

Links from site with high domain authority are considered to be the best. They drive the most relevant traffic to your site.

5. Know that Customer is Always Right:

A long lasting bond with customers is important for any kind of business, but it’s way critical to build a successful SaaS company and have loyal customers. There is a huge difference in how a traditional enterprise works and how a SaaS model works.

You have to cater the customers differently according to the kind of service you are providing. Now, new strategies have come up to build a wider user base.

Keep a look on what strategy is trending!

Look at how Uber is using Promo codes and building up a user base.

Peter Cohen guides on how to ‘Treat Customers like Prospects’. Read the whole tip to know what he means in detail.

6. Be Open to Risks:

Startup success stories come in amazing ways. Sometimes the kind of businesses opened up and how they are running simply amazes you. These are the people who took a step out and took risks.

Ron Pragides tells how creativity can be implemented with lower risks.

Entrepreneurs are like visionaries! They see things in a different way; a better future and better opportunities.

They are convinced that they can make it. Biggest SaaS companies have come up with new, tricky and catchy idea which didn’t seem practical at the first step but they turned out to be successful SaaS startups.

Risk Assessment for SaaS startup is essential for its growth and profitability.

Entrepreneurs keep on thinking about their next move. They have to look out for disruptions and innovations.

SaaS entrepreneurship is about risk taking, and making bold statements about “what’s next.”

7. Make Perseverance the Key:

You might be wondering:

That how difficult it could be to make changes and tweaking the procedures. A company should definitely respond to new trends and optimize accordingly.

But be careful not to make too many changes too quickly because real and measurable impact takes time to show the true colors or results.

React to valuable changes, not everything.

Sometimes, it’s better to follow your gut based on what you know and trust about your niche than responding to everything that’s happening around!

The best strategy in SaaS startups is to respond timely to market shifts and customer demands.

8. Never Be Afraid to Aim High:

It’s a must to know your own capabilities for growth.

Above diagram shows the primary SaaS goals and these should be aimed by the SaaS startups.

Several startups make the iterations much earlier and frequently, but at times they forget that this also applies to goal achievement. Even if you don’t achieve remarkable results, why not aim for it? If you miss, you still may surpass your original goal and grow your business faster than you ever thought it would be.

So, aiming high and keeping up the pace with on-going disruption is the best technique to make your startup one of the successful SaaS companies.

These were some useful hacks that one should definitely adopt and implement before opening up a SaaS startup company. These are seriously going to rock your startup and turn it into a major success!

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