All you need to evaluate a SaaS idea

If you plan to create a SaaS product, these are the things you should consider when evaluating ideas:

• Makes money/saves money/saves time for your customer;
• Solves a recurrent, painful problem;
• Your target customer has a budget;
• You experienced the problem yourself (optional, but ideal!);

1. Makes money, saves money, or saves time

You can think of any successful SaaS, I guarantee it will fall in one or more of these categories:

Makes money

"We make you $10k every month for just $50/month".

Example: AI sales assistant that converts leads to paying customers.

Saves money

"Every $1k you spend on Facebook Ads, we'll save you $500".

Example: Social media software that automatically stops the campaign when it stops delivering leads.

Saves time

"Say goodbye to paperwork, do everything from your computer".

Example: Electronic signature for contracts.

If your product does two or all of them, you have a great idea in your hands.

2. Solves a recurrent, painful problem

No one will pay you money if the problem you're solving only happens every 2 years and they can solve it themselves.

People will start considering paying for your SaaS if they are:

• Aware of the problem;
• Willing to pay to solve it;

If the problem is painful and recurring enough, there's a high chance they either:

• Use a competitor;
• Hired someone to do it;
• Tried to build a solution (pay attention when people create complex excel/google sheets);

Your SaaS must solve it better, faster, and with less overhead for the user.

How will you know if it does all those things? Talk to your users!

3. Your market has a budget

This might seem a bit obvious (it is), but people seem to overlook this part.

You can check every item on the list, but if your target customers don't have a budget, you're back to square one ($o revenue).

Ideally, your target audience is part of the core team of the company if you're B2B or have enough money to buy your product.

Core teams are where the money flows in B2B SaaS.

For example, a tech company has at least two core teams: engineering and product.

Does your product solve a painful problem for a lot of engineers in hyper-growth contexts?

Does your product solve a painful problem for a recruiting team on a company doubling in size every 6 months?

If you have a compelling value proposition for a team (B2B) or someone (B2C) with a budget, your chances of success are much higher.

4. You experienced the problem yourself (ideal, but optional)

If you experienced/still experience a painful, recurrent problem and you can build a solution for it, you're halfway there.

This will speed up validation dramatically.

It's no excuse to not talk to your target audience, though.

But if you experienced the problem first-hand and know people in similar contexts with the same issue, you have a much better starting point to:

• Know what to build for an MVP;
• Talk and sell to them;

Those are my suggestions for evaluating a SaaS idea, let me know what you think!

Originally posted here.