SMART INVESTMENT IN A SOFTWARE PLATFORM (SaaS)FOR YOUR BUSINESS

Are you an entrepreneur constantly thinking about how to add value to your business?

Perhaps you have the idea of an app or clever software platform that, if deployed in your company, will enhance your client experience or make your business more agile or save costs or accelerate new business.

And, if this piece of tech is developed by your company (rather than bought off-the-shelf), and you hold its IP, it will most likely also increase the valuation of your business.

If so, it's worth it to keep reading ⤵️

Pluralit works with many business owners and founders to create their proprietary software platform that grows the value, and valuation, of their business. We are often asked what is the right approach for a growing business to get going when starting on such a significant journey. Taking the right/smart approach, and working in stages or steps, can help maximise the value delivered to the business and its clients, whilst minimising risk and allowing for a lot of learning and optimisation along the way. We (and a lot of tech startups and scaleups) use this kind of approach.

In this article, we take a strategic approach to making a smart investment in a Software Platform. By phasing your investment and adopting an agile methodology such as Scrum, you can efficiently develop and launch a software product that adds exceptional value to your business. The best part? The journey itself provides a treasure trove of customer research and invaluable insights.

1. DEFINE THE PRODUCT

Before diving into the development process, it's important to clearly define your product. This stage involves fleshing out your high-level idea to a level where it can be worked on effectively. What is the product vision? Which market needs will it cover better than competitors? Which features are a must to launch? And which features, in particular, differentiate the product?

If the product conception is mature, this step can take as little as a couple of weeks mainly to map it in the right ‘language’ for agile software development. Otherwise, much longer time will be needed to discuss and agree on the features that will largely define the product and answer the strategic and marketing questions. This step, if properly done, can and will save time and resources later on. Falling into the temptation of cutting product design short to start developing will almost certainly cost time and money later.

A vital part of this process is to consider which parts of the software platform encapsulate the strategic value of the business, and which should therefore be designed and largely built from scratch to be unique IP. In most cases, a significant part of the platform can be built using existing commercial or open-source components. For example, there are many existing solutions for user identity management or scaleable search. Making effective use of this technology will massively reduce delivery time and cost and will ensure the platform continues to benefit from wider industry investment.

2. START SMALL, WITH A PROOF OF CONCEPT (PoC)

A Proof of Concept (PoC) is a small version of your software product designed to validate your idea and test its relevance and usability. The main purpose of the PoC is often to gather market research and feedback from early users, to support a pitch to investors, or both. It will also validate any technical assumptions and allow more accurate estimates and plans to be developed.

This stage should be developed quickly and cost-effectively. During this phase, you will identify a few customer journeys, develop their experience (front-end) and assess the technical feasibility in the background.

Properly managed, PoC development typically takes about 8 weeks, followed by 4-5 weeks of testing and learning from friendly users (and perhaps feedback from potential investors).

3. DEVELOP A MINIMUM VIABLE PRODUCT (MVP)

The MVP will focus on a key area of functionality and demonstrate the business value that the final platform will deliver. The main objective is to elicit a positive response from key stakeholders, enabling them to truly understand your vision and ensure it resonates with potential users. By focusing on a compelling user experience and core functionality, the MVP approach avoids feature overload, helps deliver a lean and successful product, and gathers valuable feedback and insights.

4. MINIMUM MARKETABLE PRODUCT (MMP)

Once the MVP has been successfully validated, it's time to complete the product for its proper commercial launch. This usually involves adding additional backend and infrastructure features and functionality to ensure the right security, data protection, scalability and performance across multiple platforms, all upon having real customers. This is the smallest set of features that delivers value to customers and can be released to the market. Sometimes we also have the chance in this phase to correct identified issues or further refine the user experience.

For most software or products that followed the above process, this phase should not take longer than 8 to 12 weeks for the MMP launch (R1 Commercial). From here onwards, typically the product team runs quarterly releases (R2, R3, …) to continuously evolve the product (add further client features, strengthen the platform security/scalability/interoperability, correct bugs, etc.).

5. MARKET AND MONETISATION

Once you have a reasonably stable product design (no earlier than POC, no later than MVP), it's important to focus on defining the marketing and monetisation strategies for commercial launch. This includes: defining the pricing strategy for your product and derived feature pricing; creating a go-to-market plan; setting up a website (if necessary); and planning a promotion plan.

Many launch failures can be traced to having the wrong pricing strategy, a poor communication plan, or both. We should give these product aspects as much thinking and energy as to the technical development if not more! A smart project starts working on pricing and marketing plan as soon as the client feature set is reasonably stable (somewhere in between POC and MVP milestones), and constantly iterates and refines as the product evolves towards an MMP to launch.

More often than not we hear of entrepreneurs shortcutting this step to launch quickly, only to fail due to insufficient clarity of pricing or communication. The effective pricing and promotion of your product is essential to both its initial traction and long-term success.

6. MAINTENANCE AND SUPPORT

Investing in ongoing maintenance and support is essential to ensure that your software platform or product remains reliable, bug-free, secure and up-to-date. Regular updates and bug fixes will help you provide a seamless user experience and address any issues promptly. This ongoing investment will contribute to the long-term success and growth of your SaaS platform.

We are confident that by following this approach you can create business value with smart investment and modest, controlled risk.

For example, we use an agile methodology such as Scrum to ensure a streamlined and flexible development process. Scrum enables rapid prototyping and delivery, with client checkpoints every couple of weeks, in a highly- collaborative team with the ability to respond quickly to change. With self-organising teams and short sprints (typically 2 weeks long), Scrum empowers your development team to incrementally deliver high-quality, working software, and gives the client peace of mind of checking the value delivered every 2 weeks.

Deciding to invest in your software platform is not an everyday decision. This recommended approach can help you take ‘small incremental steps’ (in time, money, effort) rather than one big jump. At Pluralit we help companies mature their Software Platform (SaaS) vision and, when ready, bring it to life on their behalf.

If you are interested in making this move in your business and would like to learn more about how it works, we recommend you read the article "HOW TO INCREASE BUSINESS VALUE AND VALUE BY INVESTING IN PROPRIETARY TECH"

Contact us to find out more about smart software investment!

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