SaaS is one of the cleanest business models to build if you want recurring revenue. You create software once, host it online, and customers pay you monthly or yearly to keep using it. That simple setup is why so many saas startups keep popping up, and why the SaaS industry is projected to reach over $200 billion by 2025.
This guide walks through the full roadmap: how SaaS works, how to research and validate an idea before you waste months building, how to launch an MVP, how to price it, how to market it, and how to scale without losing customers.
Why SaaS Businesses Are Booming
SaaS stands for Software as a Service. It’s a cloud-based model where users access your software over the internet, usually through a browser or app, without downloading and installing a traditional program.
The big appeal is the business model. Build once, sell forever is the dream. You don’t ship physical products, you don’t deal with inventory, and your customers can sign up from anywhere in the world.
If you want more context on how fast the category is growing, this SaaS market size and forecast report breaks down projections and what’s driving demand.
Here’s what makes SaaS so attractive:
- Recurring revenue: subscriptions can create steady cash flow.
- Scalability: one product can serve 10 customers or 10,000 customers with the right setup.
- Global reach: anyone can access it instantly.
- Remote-friendly: it can be run from anywhere (yes, even the Bahamas).
And if you’ve ever looked at your bank statements and realized you’re paying for more tools than you remember signing up for, you’ve seen how frictionless SaaS can be for buyers. Signing up is often one minute, and canceling is “later.”
Step 1: Research Your Market (So You Don’t Build in a Vacuum)
Most SaaS failures are simple: the product was built without proof that people would pay for it.
Before you plan features, answer two questions:
- What problem does your SaaS solve?
- Who are you solving it for?
Keep it tight. “Everyone” isn’t a customer. “Small businesses” also isn’t specific enough. Try to name a role and a situation (for example, “marketing managers at small e-commerce brands who need social posts scheduled weekly”).
Next, research what’s already out there:
- Competitors and what they claim on their homepages
- Pricing (what the market is already paying)
- Market size and growth
- Who spends the most money in this category
- Emerging trends in that space
A simple approach is to search Google for direct competitors and read how they position the product. You can also use a tool called Frederick AI (mentioned in the video) to speed up research and data gathering.
The point of research isn’t to copy competitors. It’s to confirm that money is already flowing in that category.
Step 2: Prototype the Product With Wireframes
Before you spend money on development, sketch the product experience. A wireframe is a simple layout of the interface: what’s on each screen, where buttons go, what actions users can take.
You can do this with:
- Pen and paper
- Balsamiq
- Figma
Wireframes help you avoid the classic mess where you hire a developer and realize you never agreed on what the product should look like. They also force you to focus on what matters: the user flow.
Skipping this step often leads to expensive rework.
Step 3: Validate Your SaaS Idea Before You Build
The most expensive mistake in SaaS is building first and asking questions later.
A clean rule to follow: the moment someone pays you is the moment you have a business.
Validation method 1: Start a waitlist
A waitlist lets you collect interested users before the product exists. You can also build sharing incentives (points, discounts, early access) to get people to invite others.
Tools mentioned in the video include:
- Waitlist.me
- Viral Loops
- Shopify forms
- Google Forms (simple and fast)
A waitlist isn’t perfect validation, but it helps confirm interest and helps you start building an audience.
Validation method 2: Run an early adopter program (best option)
An early adopter program goes a step further: you offer a discounted first-year license for people who want to invest early.
If they pay, you’ve proved something important: this isn’t just a “nice idea.” It’s a pain worth paying to solve.
To make it compelling, give exclusive benefits such as:
- Verified status on the platform
- Early access to new features
- A voice in feature creation
The video mentions Daniel Priestley, who said validating before spending big money was key, he launched his first company at 21 and reached $10 million in revenue within 3 years. Whether you want investors or not, this type of traction looks good because it shows demand is real.
If you like the pre-sell approach, this story about pre-selling a startup idea and making $20K before launch matches the same principle: collect money early to reduce risk.
Step 4: Build an MVP (Minimum Viable Product)
An MVP is the smallest version of your product that still proves the core value. It’s not the “cheap version.” It’s the focused version.
You can build MVPs with tools such as:
- Figma (for clickable prototypes)
- Bubble (no-code apps)
- Shopify (useful for landing pages and basic flows)
- Glide (no-code apps)
The video mentions examples of big companies that started with MVP thinking:
- Buffer launched with a simple landing page explaining social scheduling.
- Zapier started with a manual behind-the-scenes process where the founder connected apps manually.
- Airbnb tested demand by listing their own apartment on a simple website.
The lesson is simple: prove demand before you build the polished version.
If you want to ship quickly, the Shopify free trial for launching a basic site can help you publish a landing page fast.
Step 5: Pricing Models for SaaS Startups
Pricing is not just “pick a number.” It’s part of product strategy.
Start by researching what competitors charge in your category. Then consider:
- Your monthly operating costs
- Your upfront investment
- How quickly you want to earn back what you spent building
Here are common SaaS pricing models mentioned in the video:
| Pricing model | How it works | Examples mentioned |
|---|---|---|
| Subscription-based | Monthly or annual recurring fee | Netflix, Shopify, Spotify |
| Freemium | Free base version, pay for premium features | CapCut, Dropbox |
| Usage-based | Pay based on how much you use | Stripe |
| Flat-rate | One price for all features | Notion, Adobe Express |
| Per-user | Pay based on number of users in an account | Slack, Zoom |
Patrick Campbell (ProfitWell) makes a strong point: a great pricing strategy doesn’t just maximize revenue, it maximizes customer success. If your customers don’t win with your product, they cancel.
Step 6: Marketing Your SaaS (How People Actually Find You)
You can build the best software in the world and still get ignored. Marketing is how you get discovered and how you get paid.
SaaS has one nice advantage: there’s no shipping. People can sign up and use it instantly, anywhere.
Partner with influencers and key people
Find people your audience already trusts (influencers, thought leaders, communities, businesses). Offer them free access, and ask them to share it if they like it.
You can also set up affiliate deals, paying a percentage for each referral who becomes a customer. This works well because it ties the reward to results.
Tools mentioned for outreach and prospecting:
- ChatGPT or Google Gemini (to identify potential partners)
- LinkedIn Sales Navigator
- Apollo (for contact info)
- Shopify Collabs for finding affiliates
Run paid ads
If your customers spend time on social media, ads can work. The video points to tutorials that help with the basics:
Use free trials, content, and social proof
A few practical ideas that work well for SaaS:
- Offer a free trial so users can test the product before paying.
- Create educational content around the problem your product solves.
- Build a community around the product (it raises trust and retention).
- Put reviews and customer success stories on your homepage.
- If your SaaS serves merchants, consider listing it in the Shopify App Store (mentioned in the video).
Step 7: Build Your Team and Your Tool Stack
At minimum, you’ll need:
- A developer (to build the software)
- A UI/UX designer (for the interface)
As you grow, you may also need:
- DevOps engineer
- Product manager
- Customer support reps
The video mentions hiring platforms like Toptal (top 3% of talent), Wellfound, and Gun.io.
No-code options (with a trade-off)
You can build SaaS products with no-code tools like Bubble, Glide, or Adalo. This can be great for speed, but there’s a downside mentioned: you don’t fully own the software the same way you would with your own codebase since it runs on their platform.
Helpful tools mentioned
- Firebase (app building)
- Maxio (billing)
- FullStory (behavioral data)
For sales, you can start by selling yourself. If you hire a sales team, you can also structure compensation around a percentage basis.
Step 8: Keep Customers Happy (Retention Is the Job)
Acquiring customers is hard. Keeping them is where SaaS becomes profitable.
Focus on:
- Ongoing customer support
- Keeping the software updated
- Fixing bugs fast
- Monitoring feedback and responding to it
The goal is simple: keep people on the platform as long as possible, because retention protects your revenue.
If you want more on what tends to go wrong early, this guide on product-market fit mistakes SaaS founders should avoid is a useful checklist.
Step 9: Scale What’s Already Working
Scaling is not doing everything. It’s doing more of what already works.
The video suggests using the 80/20 rule: 80% of results come from 20% of actions. Find that 20%, then double down.
Ways to scale once you have data:
- Refine your target customer, then retarget them with ads
- Upsell existing customers (solve problems before, during, and after they use the product)
- Expand into new markets or adjacent industries
- Build a sales team, or automate parts of sales and onboarding
- Raise funding to invest in growth
A simple mindset here: put money into the places where money is already coming out.
Common SaaS Challenges (And How to Handle Them)
Churn rate
Churn rate is the percentage of customers who stop using your service during a given period.
Churn rate (%) = (Customers lost during a period / Customers at start of period) × 100
Example: if you start the month with 1,000 customers and lose 50, your churn rate is 5%.
The video notes a typical SaaS churn rate is around 5%. If your churn is higher, figure out why. A simple survey asking “Why did you leave?” can uncover fixes that increase retention fast.
Competition
Competitors will lower prices, copy features, improve faster, and try to win your customers.
Your defense is staying close to your users:
- Listen to feature requests
- Keep improving what matters
- Update the product often
- Stand out with better outcomes, not just more features
SaaS Trends to Watch Going Into 2026
A few trends mentioned:
- AI features inside SaaS tools
- Data as a Service
- Platform as a Service
- Market consolidation (bigger companies buying smaller ones)
- Micro-SaaS (smaller, focused SaaS businesses)
- White-label SaaS (buy unbranded software, add your brand)
Consolidation is worth noting because it creates a potential path where you build a SaaS product, grow it, then sell it to a larger player in the same category.
What I Learned While Building SaaS-Like Projects (The Part That Hurt a Little)
The biggest surprise when you start thinking like a SaaS founder is how easy it is to fall in love with features.
It feels productive to add “just one more” setting, dashboard, or automation. But the moment you put your idea in front of real people, you realize most of that stuff doesn’t matter early on. What matters is whether the product removes a real pain fast.
The second lesson is that signups can lie. People will join a waitlist for a cool idea. They’ll even tell you they love it. But payment is the real signal. Even a small paid early-access offer tells you more than 200 polite compliments.
If you want motivation from founders who repeated wins, this case study on how to hit $100K MRR with multiple SaaS apps is a solid reminder that simple execution and tight feedback loops beat long build cycles.
Conclusion
Starting saas startups in 2026 comes down to a repeatable pattern: pick a real problem, research the market, prototype fast, validate with payment, ship an MVP, then market what you built. After that, retention and scaling become the long game.
If you take one idea from this guide, take this: validation beats confidence. Money from early customers is the clearest signal you can get.
Keep your pace up, keep learning, and keep shipping. As the quote in the video says, being an entrepreneur means doing the known work for the unknown outcome.
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