The value of an idea lies in its using of it. – Thomas Edison, General Electric Co-founder

Launching a business once needed a heavy inflow of capital supported by technical expertise. But this is not true anymore. Use of software involved purchase and download. Companies had to handle space constraints whenever an update was needed. Thankfully, SaaS (Software as a Service) products have made things easier and more efficient. 

The SaaS market is valued at around 197 billion dollars and could reach 232 billion USD by 2024. SaaS is one of the three cloud computing levels that minimize spending on software, hardware, and personnel in the IT field. Businesses stand to benefit immensely when they use the right software products. Using the services of one of the top software development companies for startups will ensure the best outcomes.

Since software applications are integral to most businesses, investing in the right software development company will positively affect the bottom line. This article provides detailed info on creating a Minimum Viable Product (MVP) for SaaS startups. Here are the steps to follow to create MVP for SaaS startup.

Overview of the SaaS industry and its growth

SaaS is a cloud-based software delivery system that provides end users access to software applications online. Due to the cloud backing, system users need not spend excessively on infrastructure to access the software. 

Some examples include Spotify, Zoom, Mailchimp, Salesforce, Google Workspace, and Netflix. The industry is expected to be worth 883.34 billion US dollars by 2029. A rise in the adoption of cloud-based solutions, centralized data-based analytics, and integration with other tools fuels the growth of the sector. 

Importance of creating a Minimum Viable Product (MVP) for SaaS startups

A minimum viable product (MVP) is the initial basic version of a product with minimal features but is of value to the customer. It is considered a crucial part of SaaS startups as it helps in

  • Validation of the business idea
  • Helps in the quick launch of the project
  • Provides concept representation
  • Reduces primary costs

With an MVP, a startup can effectively focus on further design, development, and upgrades.

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Understanding the MVP concept

MVP is an efficient method of product development that is unlike the traditional waterfall method, which requires the development of the entire product before finding its viability. While MVP may sound like a powerful product, it is not easy to create MVP for SaaS startup. For an effective MVP, its purpose and benefits should be known.

Definition and purpose of an MVP

A minimum Viable Product or MVP is defined as a free-standing product with minimum features required to solve the key problem of the targeted customers. It is a specific version of a fresh product that helps the developer team to understand customers efficiently.

The main objective of creating MVP for SaaS startups is to test the core idea of a company and find out whether it is what the customers need. With the least effort put in and on a stringent budget, creating MVP for SaaS startups is possible. An MVP helps to collect knowledge and validate ideas in a business model.

Benefits of building an MVP for SaaS startups

An MVP helps to know whether the product is useful for customers. While it is not possible to know customer acceptance without a fully developed product, the idea of creating MVP for SaaS startups is to concentrate on the value proposition and promote efficiency without being fully developed. Some of the important benefits of an MVP are:

1. Validating business ideas

The MVP needs to convince users of its ability to solve or have features to solve the problem. Early iterations help to field-test the product, which is not a fully marketable product but more than just proof of an idea.

2. Reducing development time and costs

To create MVP for SaaS startup, a business requires less time to develop, and the cost is also less than the amount needed for a full-fledged product. The reduced time and cost for learning and adapting to market requirements help reduce startups' failure risk. 

3. Gaining early customer feedback

With early feedback, a business can get the necessary input to create a marketable MVP for SaaS startup. It paves the way for the development team to focus on adding features that meet customer needs. But the feedback must be applied in batches and not as single actional data points.

4. Attracting investors and partners

One of the key purposes behind the move to create MVP for SaaS startup is to prove the product's functionality. Investors find the information valuable, and it helps them assess its effectiveness. Since pitching a business idea alone is insufficient in the current scenario, MVP is tangible proof for investors and partners. 

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Identifying the core features for your SaaS MVP

To create MVP for SaaS startup that has only the basic features, identifying them is a vital step in the development. Here are the ways to identify them.

Analyzing your target market and customer needs

The main purpose of a product is to satisfy the end-user or solve a problem that the end-user has. It is therefore important to first analyze the customer using honest feedback from customers on the problem and how the product can help solve the issue. Feedback forms via email and social media will help receive diverse opinions for the analysis and identifying the customer's needs.

Defining your value proposition

How a product is useful to the customer is a vital part that helps decide on the features to add to create MVP for SaaS startup. The best value proposition is one that is tried and tested using customer feedback. With a proper value proposition, many of the features and functionality can be left behind if they do not serve the value proposition.

Prioritizing features based on customer pain points and market demand

Loading an MVP with features can complicate it. Further, the uses of the features can shoot up the cost. To avoid this, it is necessary to categorize the features as vital and nice to add features and eliminate the latter in the MVP. Choosing a few of the core features that the customers will need and pay for will help prevent feature overloading.

Balancing simplicity and functionality

Achieving a balance between simplicity and functionality is vital for an effective customer-focused product. This can be done by

  • Identifying the core features
  • Using simple design for user experience and design
  • Gathering feedback continuously and iterating
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Planning and designing the SaaS MVP

Planning and designing the SaaS MVP involves user stories, use cases, mockups, and wireframes. These help in understanding the product and ensure effective development.

Developing user stories and use cases

User stories help in understanding the needs of the customer and the market. Without user stories, a company wastes time, money, and effort. Some of the advantages of user stories are:

  • Minimizes documentation and administrative work
  • Provides user collaboration
  • Ensures easy estimations
  • Prioritization is simpler
  • Gives importance to technical feasibility

User stories are gathered first and organized as per the execution difficulty and priority, like product requirement, deadline, and targeted user base.

Creating design mockups and wireframes

The focus on design is as vital as concentrating on the planning and research part. Key components of design include wireframes and mockups. Wireframes help show the app screens to capture the important features and the user flow. It saves the time spent collaborating with a designer. 

Selecting the right technology stack for your MVP

A technology stack comprises languages, tools, frameworks, and other elements that aid in app development. The right choices used to create MVP for SaaS startup can help enhance overall app performance and user experience.

1. Front-end and back-end technologies

A technology stack for an MVP is divided into two main components –backend and front-end technologies. The former is where data processing is done and includes backend language, framework, database, web server, and operating system. 

Frontend includes images, user interface, text, etc. Python, Ruby on Rails, and Node.js are popular backend technologies. React.js, Angular.js, and Vue.js, are common front-end frameworks.

2. Database and hosting solutions

To create MVP for SaaS startups, it is important to consider the hosting solution which will make the product available to the consumers. Some of the common hosting solutions used include

  • Netlify
  • Serverless hosting like Vercel
  • Docker and Container as a service (CaaS) platform
  • VM with docker-compose 

Database solutions help to deploy user data effectively. These include

  • Relational like Oracle, MySQL, etc.
  • NoSQL like Cassandra, MongoDB, Hive, etc.
  • Hybrid
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Developing the SaaS MVP

Development of a SaaS MVP requires acknowledging that each SaaS is unique, particularly in the MVP phase. It involves factors like assembling the team and implementation.

Assembling the development team

A service with an experienced team of developers will ensure the solution is of high quality and within a budget. 

1. In-house vs. outsourced development

For building an MVP, the best choice is to collaborate with a team specializing in making SaaS solutions rather than hiring outsourcing teams that work on multiple projects. This helps in saving time and working within a budget.

2. Key roles and responsibilities

Assigning roles and responsibilities is based on the skill set of team members. Depending on the skills, the team members are assigned to cover various aspects like 

  • Defining, validating, and articulation the product vision
  • Networking and marketing efforts
  • Estimation of the effort and returns expected from the concept
  • Providing design suggestions
  • Explaining product features to Sales, marketing, support, potential investors, and partners
  • Managing the scope and arranging resources needed

Implementing the development process

Without proper implementation of the development plan, creating MVP for SaaS startup that gives effective results is difficult. Here are some tips on the implementation.

1. Agile development methodology

While Agile and waterfall methods are used commonly, Agile is the most preferred as it is efficient and produces the best outcomes. It enables quicker production and the use of a flexible approach due to its focus on iterative and incremental development.

2. Development milestones and timelines

Setting milestones and timelines helps the development team to view the entire project plan in a single window. Tasks are organized well by breaking them into phases and linking dependent tasks. Task deadlines and the beginning are visible to project managers, and they can also identify team members working on the task.

Quality assurance and testing

Assuring the quality of the product is paramount to its success. Quality assurance aims to check the quality standard, defect-free status, and positive user experience of the product. 

1. Functional testing and user acceptance testing

Functional testing ensures the features and functionalities work as they are meant to and meet particular requirements. A positive user experience is another criterion tested, including ease of use and intuitiveness.

2. Security and performance testing

The security testing confirms the product's adherence to the standard security measures and whether it complies with the required regulations. For performance, the product is tested for its ability to handle user load and scale with a growing user base.

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Launching and validating your SaaS MVP

Validating a SaaS MVP ensures it is a legitimate idea with good chances of success. It also helps to mitigate risks.

Pre-launch activities

To create MVP for SaaS startup, it is prudent for the startup to allow the users to develop it. While the company may do the planning, research, and design, the product should be built from the pain points of the target users. Beta testing and user feedback are essential for this.

1. Beta testing and gathering user feedback

Two ways of beta testing are present- private and public beta testing. In the former method, the product is tested by a certain group of participants that are either from the existing user base or paid testers. 

In the latter method, any person is allowed to test the product and provide feedback. Some places where beta testers can be found include existing customers, social media groups, and beta testing websites.

2. Finalizing the MVP for public release

Building a well-balanced MVP requires all the above aspects to blend harmoniously for a successful launch. This includes assembling a talented team and using a smart marketing strategy. 

Marketing and promotion strategies for your MVP

A sound marketing and promotion approach helps to develop an MVP effectively. Some of the successful approaches used are given below:

1. Content marketing and SEO

Using relevant and engaging content is vital for marketing success. Search engine optimization enables the use of targeted and relevant keywords resulting in impactful ads. It also gives the company a better ranking in the search results for the MVP.

2. Social media and email marketing

Using social media channels such as Instagram, Facebook, LinkedIn, and more help to attract user attention with the posting of different types of content. Email marketing is another significant tool for acquiring users. It helps boost retention rates, return on investment, and creates brand awareness.

3. Networking and industry events

Industry events provide a wonderful networking tool and discovering the latest trends and expert opinions. Attending industry-related trade shows and events provides new ideas. It also helps to meet up with potential users, know about trends, and meet investors and partners in person. 

Analyzing user feedback and metrics

User feedback and metrics are valuable in knowing user sentiment and help to improve customer satisfaction and reduce failures.

1. Key performance indicators (KPIs) for SaaS startups

KPIs for SaaS startups focus on acquiring customers, the satisfaction of customers, and monetization. The metrics used are

Traffic-based metrics: Includes organic traffic related to visitors finding the site via search and paid traffic related to visitors from social media ads, pay-per-click ads, or sponsored content.

  • Activation rate
  • Conversion rate
  • Active users
  • Feature related metrics
  • Customer retention rate
  • User satisfaction metrics

2. Evaluating the success of your MVP

The success of an MVP relies on identifying the long-term product potential and finding an approach to develop the potential. Metrics that provide qualitative feedback on the product's prospects help in this endeavor. Understanding customer sentiment and user engagement helps assess an MVP's current and future value.

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Iterating and scaling your SaaS product

A crucial part of product development is creating MVP for SaaS startups. But it is not the end phase. Iterating and scaling are important to turn the MVP into a Minimum Marketable Product. Here are the ways by which this can be achieved.

Incorporating user feedback into product development

It is important to incorporate user feedback in the development of the product. Feedback helps in making key decisions on the growth of the product and feature prioritization.

Prioritizing new features and enhancements

Measures such as using the insights gained from user feedback, making changes such as adding new features, and improving existing features will help make the product competitive.

Growing your user base and expanding to new markets

An effective marketing plan and a robust online presence are needed to increase the user base and expand the reach of the product. Use of social media, content marketing, and search engine optimization help. Influencer marketing, paid ads, and email marketing also work.

Securing funding and partnerships for future growth

Finding funding and partnerships helps in the future growth of the product. Finding partners that share similar beliefs and are invested in the product's success will help. Government agencies, Angel investors, venture capitalists, and crowdfunding are some of the sources to try for funding.


Despite being a basic model of the end product, an MVP is vital for the success of the product. Knowing how to create MVP for SaaS startup will ensure this.

Key factors for building a successful SaaS MVP

To create MVP for SaaS startup, the key factors to note are identifying the target market, understanding customer pain points, spotting the core features, planning, designing, developing the product using appropriate methodologies, and focusing on quality assurance and testing. Beta testing before marketing and promotion will ensure the MVP launch is successful.

Final thoughts on validating your business idea and maximizing growth potential

Clarifying the product concept, planning, designing, defining target users, testing, demo, customer feedback, and other KPI metrics help validate a business idea. Once validated, iterations and adjustments result in enhanced product development and maximized growth potential.

Peter Herzog
Ruby on Rails Developer
Peter is a Ruby on Rails web developer with 10 years of experience, and a strong foundation in full-stack development, with a particular focus on building scalable and efficient web applications using the Ruby on Rails framework. With a proven track record of delivering high-quality software on time and within budget, Peter is skilled in agile development methodologies and has a deep understanding of modern web technologies, including HTML, CSS, JavaScript, and various database systems.

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How to Build a Minimum Viable Product (MVP) For Your SaaS Startup