Home » A Step-by-Step Guide to Generating & Validating SaaS Ideas – SitePoint

A Step-by-Step Guide to Generating & Validating SaaS Ideas – SitePoint

by Arifa Rana

Picking the right SaaS idea is critical to your success as a startup business. This guide will show you how to generate ideas and know which one to pursue.
Starting a SaaS business or micro-SaaS can be a profitable endeavor – but first, you need to come up with the right idea. So how do you go about doing that? In this step-by-step guide, we’ll walk you through the process of finding and vetting potential SaaS ideas. We’ll also show you how to determine whether an idea is worth pursuing or not.
Let’s get started!
SaaS stands for software-as-a-service. In layman’s terms, it means creating and selling a software application that can be accessed and used by customers over the internet.
Some popular examples of SaaS businesses include Slack, Dropbox, and Salesforce.
SaaS businesses have a few key characteristics that you should keep in mind as you generate ideas:
This combination of recurring revenue, scalability, and freemium-driven demand generation makes the SaaS model popular among entrepreneurs.
Building a business is hard work, and the risk of wasting years on something that doesn’t pan out can be daunting. The key to avoiding this disaster? Solving problems people are motivated to solve in their lives – enough that they’d pay for the solution!
There are many different ways you can go about generating SaaS ideas. We’ll dive deeper into these strategies in a moment. But regardless of which idea generation methods we use, we’ll follow a similar process from brainstorming to prototyping:
There are a few benefits to using this framework:
This ensures that your ideas are problem-focused and that you’ve done some basic due diligence on their market potential before spending time on a more formal validation process.
We can alter the inputs to get different results, but this is the framework we’ll keep coming back to for generating and vetting SaaS ideas. Let’s take a closer look at each step.
The first step is to identify who your potential customers could be. SaaS businesses typically serve one or more of the following broad segments:
These are the broadest categories you’ll tend to work with in SaaS, but you can get much more specific based on niche, income (or revenue) range and other demographics, interests, and so on.
Once you’ve identified a few potential customer segments, start brainstorming problems they might face.
For each target market, make a list of potential problems or challenges they might face that your software could help with. As you brainstorm, think about the following:
Here’s a cheat sheet to kick off your brainstorming based on the top-level market segments.
Some common problems that small businesses face include:
Common challenges that enterprise businesses face include:
Problems that startups face include:
And finally, some common problems that consumers face:
Now that you have a list of potential problems, it’s time to start thinking about software solutions that could address those issues.
As you generate ideas, keep in mind that the best SaaS solutions are usually ones that are:
If you’re looking for more ideas, here are a few resources to help you get started:
Once you’ve generated a list of potential ideas, it’s time to start evaluating them.
When you’re thinking about which trends to capitalize on, it’s important to consider whether there’s a large enough market for your idea.
This intermediary step between coming up with ideas and validating ideas is essential. Validation requires a short but notable time investment, so you’ll never be able to validate every idea you have.
This will help you narrow your list of ideas down to the eventual winner without relying on too much sheer intuition. You don’t want to prematurely discard a prescient idea, but you don’t want to get bogged down here, either.
The idea is to quickly filter a shortlist for a more formal validation process.
As you evaluate your ideas, there are a few key factors you’ll want to keep in mind:
One useful way to guide your decisions with data in a hurry is to use Google Keyword Planner or your preferred keyword research tool. see how many people are searching for keywords related to your idea.
This allows you to see how many people are looking for solutions in a given area in a way that’s fast and rough, but data-driven. If there aren’t enough people searching for these keywords, it’s likely that there’s not a large enough market for your idea.
The benefit of using this indicator is that you’ll start with an idea that’s been evaluated for demand and that you know has a viable organic search strategy available to it.
We’ll come back to full-scale validation later.
When it comes to generating ideas for SaaS products, there are a few methods you can use.
Among others, you can solve your own problem, ask your potential customers, or conduct market research.
It might to help to think of these brainstorming lenses in terms of the perspective they emphasize.
Each of these methods can be a great way to generate ideas for SaaS products that could be successful.
One of the best methods is to look at the problems you’re experiencing in your own business or life.
You can also look at the SaaS products you’re currently using and see if any areas could be improved.
These could be potential areas to focus on when coming up with SaaS ideas.
Basecamp is a great example of a company that solved its own problem. It created a project management tool because they were frustrated with the existing options on the market.
If you’re experiencing pain points in your business or life, it’s worth considering whether a software application could help solve them.
Another method is to talk to people you know and ask about their experiences. This can be a great way to generate ideas because you’re getting first-hand information about the challenges people face.
Talk to other business owners and ask them about the problems they’re experiencing. You can also look at the SaaS products they’re currently using and see if any areas could be improved.
Zapier is a great example of a company that asked its customers for ideas. They created a tool that allows people to automate tasks because they were constantly being asked for recommendations on the best way to do this.
Another method is to talk to people who work in sales or customer service. 
These are the people who are on the front line and have direct contact with customers.
They’re likely to be aware of any pain points or frustrations that customers are experiencing. This information can be used to generate ideas for SaaS products that could help solve these problems.
Conduct market research and see what areas are growing or declining. This can help you identify potential areas to focus on when coming up with SaaS ideas.
You can look at industry reports, read articles, and talk to people in the industry to get a better understanding of what’s happening.
Slack is a great example of a company that saw an opportunity in the market and created a product to capitalize on it. They noticed that people were using messaging apps for work and saw an opportunity to create a tool specifically for businesses.
Identify trends in the tech industry and think about how you could create a SaaS business to capitalize on them.
This can be a great way to generate ideas because you can see what’s popular and identify any gaps in the market.
In the previous section, we thought about potential businesses by evaluating the competitive landscape in verticals and niches. 
Here, we’re employing similar methods in a different way. Which developments in the tech industry open the door to new solutions for old problems in existing industries? We’re particularly interested in applying these broad changes and developments to areas we’ve identified as those where we have skills, strengths, and experience.
Keep your eyes peeled for news stories about companies that have been funded or acquired. This can be a good indication that there’s demand for the type of product they offer. Even if you’re too late for a high chance of success in one of these markets, there are often adjacent gaps you can fill or ways to repurpose the strategy for a more specific segment.
Once you’ve identified a few trends that you think have potential, it’s time to start thinking about how you could create a SaaS business to capitalize on them.
For example:
To help you evaluate your ideas, here’s a simple framework you can use. This framework is based on the Lean Startup methodology, which is all about validating your business ideas quickly and efficiently.
The first step is to validate that there’s a real problem to solve, and existing demand in the market. You can do this by conducting market research and talking to potential customers.
Once you’ve validated that there’s demand, the next step is to validate your ability to build the idea. This is where you’ll need to do some feasibility research to see if it’s possible to build a solution that meets the needs of your customers.
The next step is to validate that your solution solves the problem. You can do this by conducting user research and talking to potential customers. During your conversations, ask:
Then, validate that people are willing to pay for your solution. You can do this by conducting customer research and talking to potential customers. You’ll want to find out:
Once you’ve validated that there’s a market for your idea, the next step is to validate your business model, go-to-market strategy, and growth strategy. There are a few different ways you can do this:
After you’ve gone through this process, you should have a good idea of whether or not your SaaS idea is viable. If you’re able to validate both demand and feasibility, then you have a good chance of success. However, if you’re only able to validate one or the other, then reconsider your idea.
One final note: it’s important to validate your ideas as quickly and efficiently as possible. The goal is not to spend months or years developing a product that no one wants. The goal is to validate your ideas quickly so you can either move on to the next idea or continue developing the idea.
The tech industry is constantly evolving, and it can be difficult to keep up with the latest trends. However, if you’re interested in starting a SaaS business, it’s important to do your research and validate your idea before investing too much time or money into it.
In this article, we’ve outlined a few tips for coming up with ideas for a SaaS business and how to validate them. With a little bit of research, you can be on your way to starting a successful SaaS business.
Joel Falconer is the managing editor of SitePoint. In the past he’s worked at The Next Web, Envato, DesignCrowd, and AppStorm.
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