Number one mistake SaaS founders make when building a new product
The one that costs businesses tens of thousands of dollars in labor and wasted opportunities.
Running a SaaS product is difficult, but building one from scratch is even harder.
Over the last decade, I’ve worked with dozens of startups helping them design and build digital products and services.
I noticed several common mistakes, but one that stood out to me that costs businesses tens of thousands of dollars in labor and wasted opportunities is choosing not to invest in quality product design upfront.
Most startup founders are domain experts or have prior expertise in related businesses who saw the opportunity to tackle a specific market problem.
As a result, the founders start planning and developing the product based on their assumptions and vision of how the solution should work, without seeking feedback from the audience they are targeting.
There are two main reasons why they make this mistake
They may not be aware of the right product research and design process. Founders might assume that they know better since they are deeply familiar with the problem and have already envisioned a solution. Their premise is, “I know the market well, so I don’t need to do any more research.”
They are hurrying to get the MVP out the door, thinking that they can fix the smaller problems afterward. They are not considering how designing a product in a vacuum will increase development costs and delay time-to-market over 6 to 12 months.
When the founders finally take their finalized MVP to the target market after spending six to twelve months developing it in isolation, it’s no surprise that they receive awkward feedback from their customers.
Even if you’re an expert in your field, remember that you’re designing products for your customers, not for yourself.
If you need to go back and rework components of your solution, you will have to invest more time and resources. For example, if it took you a year to build your product and you’re not a technical founder, and you needed to hire two full-time engineers to do it, you’ve invested around $200K in a product over a year.
After gathering feedback from customers, you have to redesign and rebuild parts of the application, which might take anywhere from a few months to six months or a year.
By failing to invest in high-quality product design and user research ahead of time, you have already wasted around $300K in labor costs, sales, and lost time spent fixing your mistakes. While you are making adjustments, one of your competitors may beat you to the market.
The most important thing to remember is that the further you get into the process of building a product, the more expensive it is to fix problems.
If we discuss an idea, we can change our approach on the fly.
If we sketch a concept on paper, it can take anywhere from a few minutes to several hours to come up with a superior solution.
If we are currently in the UX/UI design process and are working on high-fidelity designs, redesigning something can take anywhere from a few days to a few weeks.
And if we’re already in the software development phase, it could take weeks or months to move things around.
By skipping this critical step and failing to invest in quality product design you could waste tens, if not hundreds of thousands of dollars simply to save $10,000 to $20,000.
If you can invest $10,000 to $20,000 in excellent design and customer validation upfront, it will save you tens and hundreds of thousands of dollars in the long run. This is the 5–10x return on your investment.
Furthermore, when you look back at it in a year, you’ll notice that hiring a professional designer not only helped you develop a higher-quality product that resonates with your target audience but also allowed you to start making sales sooner. You can utilize the interactive high-fidelity prototypes to start doing sales demos and getting pre-sales from your customers.
You can also enhance customer retention because your target audience enjoys your product, which meets their expectations, solves their problem, and is simple to use. You will make your investors happy and confident that their money will multiply with you because you will be on the right track to grow the business and increase sales.