How to Create an MVP for SaaS Startup

Every startup wants to succeed, but not every of them achieves that success. Although the reasons for failure can be different, skipping the process of MVP development is one of the most common of them.

Often an MVP is that one small thing that allows startups to test their theories and succeed even in a highly competitive market. It can be the answer to so many problems, from idea validation to cost optimization.

Read further to discover why you should build a SaaS MVP, how to do this, and which mistakes you should avoid.

Key takeaways

  • Building a minimum viable product (MVP) allows companies to validate their product idea quickly and with minimal resources. This helps them save costs by prioritizing core features, adapting to market needs, accelerating time to market, and reducing risks by identifying and addressing issues early in the development process.
  • The process of building an MVP starts with thorough user research to understand the target audience, market trends, and competitive landscape. Then you need to identify the core functionality and technical aspects of your SaaS product. Designing the MVP includes the creation of clickable prototypes, architectural planning, and choice of the right technology stack. You also need to invest time and resources into early testing to identify and address issues, reduce overall costs and ensure a high-quality of your solution.
  • The cost of developing a SaaS MVP depends on lots of factors like complexity, infrastructure needs, and technology choices. A basic MVP can be created for under $20,000, but might not deliver the quality that is crucial for achieving product-market fit. Investing in a higher-quality MVP often helps achieve better long-term results.

Why you should start from MVP

MVP stands for a minimum viable product. Simply put, this is the most basic version of a product released to early customers to gather feedback and verify if the core functionality of a solution is truly efficient. Building a SaaS MVP allows companies to validate a product idea with minimal resources.

MVP can be confused with proof of concept (POC). POC is a prototype or a small project created to demonstrate if a concept is feasible to deliver. It is created to validate the technical aspects of a product to decide if it's wise to invest in full-scale development.

Both MVP and POC are crucial steps in SaaS product development. However, they serve different purposes and occur at different stages. POC is created first to verify the technical viability of a product. MVP for SaaS is built later to test the market viability and collect user feedback to improve a product that's already functioning.

Here's why you should consider developing an MVP for SaaS:

  1. To validate your assumptions quickly and at a low cost. A SaaS MVP helps you test your ideas about your target market without spending a lot of money.
  2. To save money by investing in core features first. Doing that saves you from spending too much on things users might not want. This way, you can create a SaaS product that truly meets user needs without wasting resources.
  3. To easily adjust to market needs. With an MVP, you can make changes based on what users say and what the SaaS market demands. It's much easier and cheaper to tweak a smaller, simpler product than a large, complex one.
  4. To reduce time to market. A SaaS MVP lets you launch your product quickly by cutting down on development time. This means you can start attracting users and getting feedback sooner, which is especially beneficial for SaaS startups that want to stay ahead of competitors.
  5. To reduce risks. Developing an MVP for SaaS and launching it quickly helps you spot potential problems early. Getting your product in front of real users allows you to identify and fix issues before you've invested too much time and money. So, if you want to optimize your SaaS development costs, this is a great way to do that.

Types of MVPs you should consider

If you are ready to invest time, funds, and effort into SaaS MVP development, you need to figure out which type of MVP will work best for your needs. Currently, there are four main types of SaaS MVP, each one having its pros and cons.

These types are the following.

  1. Wizard of OZ. This MVP for SaaS is half-automated and half-manual—humans are responsible for completing the core tasks. As such a workload can be quite intense, this type of MVP usually focuses on 1-3 main features only. It's one of the most efficient choices if you want to test how users interact with the main features of your SaaS product. One of the most famous examples of such an MVP is Zappos.
  2. Concierge. This type of SaaS MVP is similar to the previous one. However, in this case, humans (or "concierges") replace most of the app's functions. They serve customers and gather their feedback. This option can be best to verify if your app meets market needs. The Airbnb case is a vivid example of a concierge MVP.
  3. Piecemeal. This MVP approach tests your idea using existing services and platforms to help you save resources. For instance, if you want to create a marketplace for pet goods, you could start by using current marketplaces to see if there's demand. This option can help you create a viable product for SaaS on a tight budget. One of its most famous examples is Groupon.
  4. Single-feature MVP. It focuses on one key feature that solves a major problem for your target audience. This feature often highlights the unique selling point of your SaaS startup. With the help of this type, you can verify if your app's main feature is technically feasible and valuable to users. Buffer used this approach for its minimum viable product.

MVP development stages

The Brights team has been building MVPs for SaaS businesses for over 13 years already. Naturally, we have a well-polished, time-proven development flow for this that we want to share with you in this article.

So, to build a high-quality MVP, you need to follow these steps.

Research your users first

To build with users in mind, start with user research. This reduces MVP development costs and helps achieve product-market fit faster.

Begin with a thorough discovery phase to understand your users and their needs. This phase is crucial and therefore should be done by professionals who can offer you valuable insights. They can use various methods for that, such as surveys, focus groups, social media listening, user interviews, and feedback forms.

At this stage, your focus areas will be the following:

  1. Target audience. Identify who your users are and what they need.
  2. Market research. Study the market to understand trends, demands, and gaps.
  3. Competitive analysis. Analyze your competitors to see what they are offering and where they are lacking.
  4. Pricing model: Determine how you will price your product based on user value and market standards.

Focusing on user research first will help you build a more successful SaaS MVP that resonates with your market.

Identify the core functionality & technical aspects

The goal of a SaaS MVP is to include only essential features that solve a specific problem for your users. This will allow you to save SaaS development costs and verify your theories more precisely, as the users will have fewer aspects to focus on.

The MVP has just those features considered sufficient for it to be of value to customers and allow for it to be shipped or sold to early adopters. Customer feedback will inform future development of the product.

Scott M. Graffius, Agile Scrum: Your Quick Start Guide with Step-by-Step Instructions

Here is how you can do it.

  1. Start by clearly outlining what core features your SaaS product MVP needs before you start building.
  2. Examine each of the chosen features. You can do this by evaluating if a feature is technically feasible, meets the needs of your users, aligns with your business goals, and is or isn't already explored by your competitors.
  3. Choose the most essential features. You can do this by using methods like RICE (Reach/Impact/Confidence/Effort).

Outline the technical requirements and constraints. These can include:

  • System architecture
  • Scalability requirements
  • Data security and compliance measures
  • Integration capabilities
  • Performance requirements
  • User experience (UX considerations)
  • Development constraints
  • Compliance with industry standards

Outlining these things will help you build a clear roadmap for SaaS MVP development. Such a roadmap, in turn, will help ensure the successful delivery of a scalable, secure, and user-friendly SaaS product.

Design the MVP

This step of the SaaS MVP development process is not just about designing the app's user interface and pages. It also includes architectural planning.

To design a well-functioning SaaS MVP, consider the following tips.

  1. Start with a clickable and interactive prototype. It will help stakeholders visualize the user flow and interactions. You can build it using prototyping tools like Figma or Adobe XD to create a dynamic representation of your SaaS MVP.
  2. Then, move on to architectural planning, which is crucial for MVP success. Define the system architecture, including front-end and back-end components. Keep things like scalability, performance, and security requirements in mind.The Brights team recommends using a multi-tenant architecture for SaaS MVP development. It allows multiple users (tenants) to share a single instance of the app while maintaining data isolation and security. Implementing such an architecture helps enhance scalability and reduce operational overhead.

Build the MVP

This is one of the most fundamental steps of MVP development. To create a well-functioning MVP for SaaS startups, you need to focus on technologies and methodologies. This will lay the groundwork for a successful MVP launch and the following iterations.

Choose the right tech stack for your SaaS MVP:

  1. Back-end development. The Brights team recommends using Node.js for scalable SaaS solutions due to its efficiency and scalability.
  2. Front-end. Front-end development. Here, we generally recommend using Vue.js and React. However, you should also take your project specifics into account.

To finalize your decision, consult with in-house or external tech experts to pick the best technology choices for your project requirements.

Opt for Agile methodology over Waterfall or other alternatives for managing the software development team. Agile is flexible, supports iterative development, and allows you to adapt to changes in project requirements quicker.

Start testing early

With SaaS development, speed is often very important. Still, it doesn't mean that you should skip the essential stages of MVP development, such as testing. Doing that can lead to costly issues later on.

Testing early in the software development process helps you reduce overall costs as you spot bugs and issues sooner and can fix them instantly. Fixing bugs post-launch, on the other hand, can be up to 100 times more expensive.

To make the most out of your SaaS MVP testing, consider the following tips:

  1. Use various testing methods like integration, load, performance, regression, and unit testing. This approach will help you increase the efficiency of testing and create a high-quality SaaS MVP.
  2. Make security and compliance testing your priority. It helps protect user data and ensure regulatory adherence.
  3. Develop a detailed testing strategy to streamline the QA process.
  4. Test on actual devices. This can help you discover issues that might be missed otherwise.
  5. Implement automated testing tools and frameworks such as Appium and Selenium to quicken the testing processes and improve their efficiency.

Avoid common startup mistakes

Strictly following all the essential stages of MVP development doesn't make you invincible to all the potential mistakes, especially when you are a SaaS startup in its early stages. The best way to protect your product from potential risks is to learn all the most common startup mistakes and do your best to avoid them.

Such mistakes are the following.

Assuming customer needs

Don't assume you know exactly what the customer wants if you don't have the research data to back you up. Instead, invest in a discovery phase and have an experienced Business Analyst (BA) on your team to gather insights and validate assumptions.

Neglecting marketing launch plan

Don't overlook the importance of a marketing launch plan. Plan ahead to create buzz and attract users' attention to your product before you introduce your SaaS MVP.

Trying to do everything yourself

Even if you are short of employees, this doesn't mean that you should handle everything on your own. SaaS development is a complicated and responsible process. To succeed in it, delegate tasks and consider outsourcing to experts when needed.

Striving for perfection with too many features

No matter how tempting it might be to equip your MVP with all those amazing features you came up with, please avoid it. The goal of MVP development isn't to present you with a full-functioning product—instead, it should focus on essential functionalities to help you save time and resources.

1.0 is not all your ideas, it's simply what made the first cut. Which is one of the most frustrating things about a 1.0 - it's not *everything* you wanted to do, and you can't wait to dive back in to build more stuff. Always a wild mix of excitement and frustration.

Jason Fried, Founder & CEO at 37signals

Involving the wrong people

It's natural for startups and small businesses to want to save costs whenever possible. That's why some of them hire freelancers for their MVP development. But while this might seem like a cost-wise option at the moment, it is also associated with lots of risks.

Entrusting your SaaS MVP creation to individuals scattered across multiple locations or even time zones can result in poor quality of the final product, missed deadlines, and other unpleasant things. If you want to make your software development process successful but cannot hire as many in-house workers as you want to, you can reach out to MVP development companies instead.

Such companies specialize in building SaaS MVPs in rather short time frames. They take full responsibility for the result and ensure that all the deadlines will be met. What's more, they offer you the help of a well-versed and experienced team that can completely take over the entire process from the discovery phase to prototyping, design, development, testing, and release. Working with professionals can also help you receive valuable tips on how to cut corners, save cash, and modify your MVP development strategy.

SaaS MVP development with Brights

If you're looking for a reliable and skilled partner in SaaS development, Bright can become one for you. We have years of experience in the development market and created top-quality high-tech solutions to over 100 companies across the globe.

One of our most recent samples of SaaS MVP development is the product we created for Signal Intent, a platform that allows users to configure and set up online calculators of different complexity.

Our main challenge was to create a generator of tools that allow anyone to edit the formulas and adjust styling of the calculator to the needs of each business. This had to be done simply and easily. What's more, such calculators had to be easy to integrate into various web pages in one click without any extra effort.

The Brights team used progressive technologies to create an MVP that is easy to grasp and use even if you don't have any developer experience. Signal Intent's MVP offers 35 calculator templates that can be launched and updated within minutes. Looking to create something just as efficient for your SaaS business? In this case, contact us to request a quote or a free consultation.

Average MVP development cost

What is the average cost of SaaS MVP development? Unfortunately, there's no general answer to that. The total development cost depends on the variety of factors.

The main factors that affect the cost of developing MVP

  • The app's complexity. The number of features and their complexity impact development costs. A simple MVP with basic features costs less than a complex MVP with advanced functionalities.
  • Infrastructure costs. You should also consider the cost of the entire app infrastructure, including servers, databases, and third-party services. Infrastructure expenses should be included in the budget.
  • Tech stack and platform choice. Your choice of technologies and platforms affects development costs. Different tech stacks have varying development and maintenance costs.

But, on average, it comes out to:

  • A simple MVP – $20,000-40,000$
  • A medium complexity MVP – $50,000-80,000$
  • A complex MVP – $100,000+

It's possible to create a basic SaaS MVP for under $20,000. However, sacrificing quality may hinder achieving product-market fit. That's because quality matters, and you should put it first.

That's the reason why investing in a higher-quality MVP typically delivers better results in the long run.

Steps to take after releasing an MVP

What to do after you've successfully built and released your Software as a Service MVP? To ensure that your hard work pays off, top up your efforts with the following steps.

1. Collect and analyze user data to gain insights into user interactions, behaviors, and usage patterns within your MVP.

2. Conduct in-depth interviews with early users to find out about their experiences, pain points, and receive suggestions for improvement.

3. Use the feedback to identify and prioritize new features or improvements that address end-user problems and improve overall user experience.

4. Offer exceptional support, timely updates, and a strong brand identity that resonates with your target audience. This will help you win user engagement and loyalty.

Wrapping up

Minimum viable product (MVP) allows businesses to validate their ideas, save costs, adapt to market needs, reduce risks, and accelerate time to market. However, to create a high-quality MVP, you need to learn and avoid common mistakes, prioritize user research, and work with professional developers. The Brights team can guide you through all the stages of MVP development and help you build a solution that will pave the way for a thriving and sustainable business.

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