Exclusive!Join our Community for SaaS Leaders! Learn More

FundingProduct and technology

Launching a SaaS product without venture capital

4 Mins read
  • Synergy Research reported that IBM had 7 percent of the cloud infrastructure market
  • These major platforms probably only went all-in on flexbox fairly recently
Listen Now to this Post

Software as a service (or SaaS) is increasingly garnering the interest of young entrepreneurs. The entrepreneurs who are more interested in cloud computing mostly favor this. There are many advantages that come with this; the product is not physical, which eliminates the need for storage space, shipping and other similar concerns. They can be sold to people anywhere in the world as all it requires to use your product is an internet and a device that supports your product, also eliminating the need for office space.

Developing and launching a SaaS product will still require a lot of resources and capital investment. It has its startup costs and you will require capital if you want your product to be successful.

 Most people look up to venture capital for funding, while it may work for some, we don’t think it is the best idea and we will give you our reasons

Losing control over your own company

Launching a SaaS company is tedious, and it requires a lot of work and you would be happy to steer the ship. You would want the company and its product to be yours but with every onboarding investor, you will lose a little bit of control over your company. The more you lose control, the more you will be forced to do things their way. And if they own more of your company than you do, you can be pushed out of control from your own company.

This is insane!

Ourt special shortcodes

Product and technology

PaaS, IaaS, SaaS – choosing what you need.

3 Mins read
Listen Now to this Post For someone who isn’t very closely following the IT industry, the number of acronyms they use can…

Venture capitalists are investing in your company with the hope of cashing in on your exit. This might be natural and might not be much of a concern to you at the moment, but it is bound to affect your team. Not a lot of talented people will be interested in seeking long-term employment in a company that could be sold down to the investors. The will affect you from building a quality team that you can sustain for a long time.   

More than that, getting venture capital is not that easy. Convincing investors is a really difficult task and it will only work if you can promise them what they expect, show undeniable prospects of growth and if the luck favours you. They have their own agendas, and if yours don’t match, then no matter how good your product is, you cannot make it work.

Avoiding VC might make things difficult for you while you are starting out, but you are better off without it in the long run.

Some people take business loans or even save up enough but we will tell you alternative methods that might help you with starting your own SaaS Company without having to lose your control over the company.   

Building capital through the audience

Most entrepreneurs seek VC because they want to make it big as soon as they enter the market with their product. They are intentionally or unintentionally giving away long term value for short term success. One way you can go about this is to generate capital is to build your capital slowly through the audience that is going to buy your product as soon as you launch them.

You can start with marketing information products. Information products have extremely low production cost and they can also provide amazing ROI if they are marketed properly.

If you are developing a SaaS product that is going to help a certain set of people, start by finding the target audience and start developing your capital by selling something that is a relatively low cost, like an online course that will be of benefit to them, which is also related to a problem that your product is going to solve. You can use paid ads and outbound marketing to sell your course. You will also be marketing your product to them through this.

The list of people who have signed up is extremely valuable. They will endorse your company to others if they like it and they are likely to pay for another course. Keep nurturing them by keeping them constantly informed about your company and your goals, if they see what you are offering them in the long run, the more likely they are to endorse your product.

Once you launch your product, you can easily market it to them and you can offer them discounted prices as they have been with you since the beginning, making them your loyal customers. 

Building strategic partnerships

You cannot do everything on your SaaS product from developing the product, marketing it and running your company all by yourself. Even if you are an extremely good programmer, you need more people to make sure it runs smoothly, for security, for functionality and to critique. Moreover, launching a SaaS company is more than just developing great software. You need to market it, you need customer care, and you need research and development and a lot more.

The best way to solve the startup cost issue while also launch your product properly is by building partnerships with people who are an expert in an area where you lack skills. This is better than outsourcing the problem to an external company. 

You can also build strategic partnerships with people who have already established an audience and have more experience than you do. By this way you can offer something that they might need for their growth in their field and in return, they will offer what you need. Making it a win-win situation.

It can be very tempting to find as much as VCs as you can and enter the market soundly. For some people, it might be what they want, but in the long run, if you want to drive your company the way you desire without giving a piece of it anybody, it is worth the extra effort that you put in while launching the product.  

Emerge Stronger from COVID-19

We don't have all the answers. But what we do have are a very particular set of capabilities. Capabilities we perfected over a decade working with 10,000+ SaaS businesses.

Read more

Related posts
Product and technology

PaaS, IaaS, SaaS – choosing what you need.

3 Mins read
Listen Now to this Post For someone who isn’t very closely following the IT industry, the number of acronyms they use can…
PeopleProduct and technology

SaaS tools that aid organizations with remote working

3 Mins read
Listen Now to this Post SaaS tools were already an essential part of many businesses and enterprises for a long time. Still,…
Subscribe to Insights by SaaS Industry

High power obtained posts by SaaS Industry leaders and practitioners. Weekly digest Email straight to your inbox.