3 Pros and Cons of Building a SAAS Business

James Cookson

October 8, 2020

When you run to Old Navy on your lunch break and come back with your new suit.

Pros

1. One product that keeps getting better.

It’s much easier to manage one growing app/software that you’re familiar with and can continue to enhance than most traditional businesses that sell a growing product line. When you see an area of improvement, or receive feedback from your users, we can make adjustments on the fly and bolster our product to the best it can be.

2. Focus on customer retention.

SAAS style businesses often provide foundational tools to a company or individual. Depending on the product, It’s often that the software you create can become an essential component of your customer’s operations and thus they will require its use on a potentially full-time or monthly basis. It’s your job to keep your users happy, but as long as you put in the time and effort to upkeep your product, you can maintain paid client relationships for much longer than a traditional business model.

3. Lower than average startup cost.

Granted your team has the programming skills to build a SAAS product, the cost of creation, storage, hosting, launch and maintenance can be relatively affordable, and scale as your client base increases.

Cons

4. It’s a lot of work to get off the ground.

There are many SAAS businesses out there that handle a variety of tasks. Many of which have large development teams, operate out of Silicon Valley and have 10+ years of product enhancements. When you’re beginning to build your software, it can take years to build your service before being competitive.

5. A lot of development skills are required.

A fully functional web/mobile application often requires a ton of programming experience and creativity. If a small group of people are kickstarting the development, you could be looking at combining 5+ coding languages, well-rounded server knowledge and security, A/B testing experience and more. You’ll likely require some unflattering blue-light protective glasses.

6. Potential liability and maintenance.

As your user-base grows, so do the expectations and potential for risk. Things are bound to cause disruption and if an error occurs for one person, it’s possible that all of your customers can/will experience this error. It’s important to stay diligent with monitoring functionality, bugs and security and reacting to potential issues in a timely manner.

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