Mistakes to avoid when building your first SaaS application

One of the hardest things I have ever done was getting a Software as a Service (SaaS) Applicaton built and working. In fact, after nearly two full years, my first SaaS app, Rank My Keyword, is still in development and is pretty close to being ready for re-releasing to the public. However, had I not made so many mistakes along the way, it would have been rocking and gaining income for over a year now. As this project finally wraps up, I am already looking ahead to additional SaaS apps, while making sure I avoid those horrendous mistakes I made with the first one. If you too are looking to create a SaaS app for yourself, you would do well to listen to what I have to say here.

Find some experts and listen to them!

If I were to be 100% intellectually honest with myself, I wasn’t ready to attack this kind of project two years ago. First off, I failed to recognize how difficult it is to design and develop a complex web application with many working parts and functions. This first mistake would pretty much lead to all of the other mistakes made along the way.


Instead, what I should have done was attack that knowledge void through those who have successfully bootstrapped a SaaS idea into a working and profitable business. Once the mistakes started pouring in and money was flowing out from my co-founders bank account, I began to realize I was rapidly building a failure and I did what I should have done long before the first dollar was spent – I began listening to experts. The first experts were introduced to me by a good friend of mine and those guys do a weekly podcast called Startups for the Rest of Us and their large reservoir of episodes and knowledge really saved this Rank My Keyword project from being a complete disaster and costing me thousands of dollars to pay back my co-founder.

Through their advise and focus, I was able to rework a broken website into one that at least functions if used an exact way, then set out to redesign large complicated sections and am now building funds to implement those changes for a re-launch of a much simpler and much more effective SaaS product. If I hadn’t done this, I’d be very deep in debt and lamenting at how I had blown my one shot at this entrepreneur stuff. My wife sure as hell wouldn’t be on board with a second shot if that had happened.

Recently, that same friend also introduced me into another company called and they have a 30-day challenge program to launch your product. Instead of dropping cash into something, that friend and I have decided to try the challenge together on a single product. He’ll design it, I’ll develop it. I am fairly certain, however, we’ll need one more developer for the more complex backend code I have yet to fully figure out. We’ll see how that goes, but so far I know for certain we won’t be making any of these mistakes I’m listing out here.

Be wary of working with friends.

I hired a good buddy of mine at the time to do the design work and what ended up happening was I treated our meetings as a friendly gathering to drink beer and shoot the shit, while spending very little time scoping out everything that was needed for this complex SaaS application. It wasn’t his fault as it was up to me to lead the conversation and give him all of the details he needed to get the job done. Instead of doing that, I gave him very little direction and expected him to figure it out. Looking back, that was a horrible idea and would eventually lead to me feeling unsatisfied with the work he produced and no way to express that feeling, because I had no one to blame, but myself.

This suggestion isn’t to say you should not work with friends at all, but to make sure you approach it as a professional meeting and not a get together for socializing. Focus only on the job you have hired your friend to do and be very specific to the requirements, otherwise you could lose a friend if the project doesn’t meet both of your expectations. This has almost happened in my case – heck it probably has happened as one or both of us felt like we got left standing in the rain.

All because I failed in my job as the client to provide quality information throughout the months we worked on designs together. We still chat every now and then, but I can feel there is a little bit of bad blood now. It really sucks too, because he is a good dude. Hopefully one day I will be able to make things square and we’ll both be actual friends again.

Be even warier of freelancers.

This I cannot stress enough. I actually scoped out the project very precisely, but I found freelance developers will promise the world and deliver as much of it as they can until they have given enough development hours for the amount agreed upon. One the freelance developer “ran out of hours”, he pretty much stopped working on the web application and I found myself left with a horribly buggy and unusable website (except by me). Not only that, I was bone dry of funding.

A fair warning, every person has a limit to how many hours they will work for any amount of money. I don’t blame the guy for calling it good after hundreds of hours of code work. He probably came away making less than $10/hr, which is chump change for a back end developer. This mistake also falls upon me, because I assumed that if everything was listed out within the bid that the developer would be on the hook to build it all. That was fairly naive on my part, but it was a lesson learned. And another mistake in a long line of mistakes that almost ruined my dream of becoming an entrepreneur.

The better plan would have been to break this massive project down into smaller bite sized chunks that would have provided very specific goals for a freelance developer to achieve along the way. That way, he would get paid after each completed chunk of code and I would have been able to ensure each section of the SaaS application was fully functional prior to funding the next goal.

What to do now with this SaaS app?

Fortunately, being within the industry this SaaS app served, I was able to build up a few clients that I personally managed through the website and have been able to slowly build up the funds to get the redesigns completed. I know this Rank My Keyword idea is one that is going to succeed, but I am more concerned about paying back my co-founder right now than I am doing a bunch more work on it. RMK generates a few hundred in income each month from 2-3 clients, so I figure it was best to get the debt repaid first before redoing the code base for a re-launch. It is my hope to have it ready by early 2015 rather than 2013 as I had hoped … all because I rushed forward before getting advice from those who have successfully launched SaaS applications before.

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