SaaS Startup Benefits: Why Is This Model So Popular?
- Business Startup
Niccolo Romano- 0
- 5 minutes read
If you wish to start a SaaS (software as a service) business, you will have to start by mapping your requirements. But if you are still unsure about whether you should start a SaaS business or not, then here are the SaaS startup benefits that will help you to draw a line of conclusion.
What Is A SaaS (Software as a Service) Company?
Let us begin by defining what is SaaS? Software as a Service implies that the users avail the software via a web-based application or their internet browser. The makers of the software host their products on their own servers which is why the SaaS products are at times referred to as a “web based solution” or a “hosted solutions”.
It can also be heard that the SaaS products are spoken about as “cloud based solutions”. In contrast, a desktop based model is where a company or an individual would install software on their computers and operate on their own servers. For your own business, you are required to quickly illustrate the SaaS startup benefits and measure them with the value proportion of your specific solution.
SaaS Startup Benefits: Reason For Its Popularity
If you are within this startup industry for the last 10 years, then it is impossible for you to not notice the rise of SaaS companies in the market. Unlike many ongoing startup trends, the attention received by the SaaS does not seem to go anywhere. There are many benefits of SaaS business models.
There are many funds for startups that specialize in SaaS businesses, and funds that are in the smaller startup markets that mostly aim at B2B startups where the most sought is the SaaS business model. So here are some SaaS startup benefits. This will allow you to find why is SaaS popular.
Easier to set up
This is the first benefit achieved by implementing SaaS application integration. Just as an efficient salesperson can make a Software as a Service company profitable, one efficient developer can usually construct the MVP on their own. According to the SOIS Report, nearly half of the SaaS company founders work part-time for their company.
In comparison to that, the B2C companies are inclined more towards resources. This does not imply that it is easy to make a SaaS business successful. In the same report, a strong correlation was evaluated between the working hours by the founders and the growth in revenue of the business. So it can be concluded that any SaaS business is less inclined towards resources.
Scalability
While the benefits that have been mentioned above apply to consultancies and other service companies, there is another big SaaS startup benefit that cannot be ignored. Unlike the service companies that can only evolve linearly, a SaaS is a technology business which implies that the additional cost of adding a client is very low. There can be exponential growth of any SaaS startup. One of the biggest SaaS company examples is the Google Workplace.
Platform and marketplace startups have greater upside when compared to most SaaS concepts, but usually, they are much more difficult to get off the ground. Moreover, even this advantage is not a big one, as a profitable SaaS company can often transition into a channel and diversify its products and services to attain higher ceilings.
The Bottom Line
So if we summarize the SaaS startup benefits, the hindrances for entering this industry are smaller than sets up and validates a SaaS startup. This type requires very few resources and hence the time allocation is also very less. The LTV of the consumer is very high. With just a few clients a SaaS enterprise can become a big business. And finally, a SaaS company is as scalable as any other tech company.
