How it started was an idea of building a business, as my clients come and tell me all the time they're building businesses, they need investments, and so on. But the truth is, over time, I realized that a good investment is a lot easier when you have traction. So then, when I decided to start working on my own startup following a specific philosophy, I decided to get traction first. To get traction, I started to develop an MVP.
The Cost of Building a SaaS: A Breakdown
Apparently, that MVP is quite costly. I've hit over $30,000 of billing just for the development and the UI of the application. Now, let me break down to you how much it will cost in our day to build a SaaS. A lot of online tools will tell you that you can use something like Bubble or a no-code platform to immediately code your SaaS. That's not accurate. Whatever they say, it's not really accurate because building a SaaS with an actual product is not the same as building a newsletter on Substack.
I started looking for a developer to fulfill my vision. Personally, I started with a conservative budget for the design. I always thought that the alpha version doesn't really require a lot of design; it just requires functionality. So, I focused on creating a platform that would be good for the end user. R&D took quite a lot of time. After six months, we had something—a very early alpha version—that worked with the concept I had in mind. The billings had exceeded $25,000 to get it to work, and it was working as I imagined—it was perfect.
But the truth is, when you go to the end user world, you really need to work on the design, and that's what we noticed. So, we started to hire designers for the UI and UX of the whole platform. We bought brand guidelines, had a decent logo from a designer, and spent over $3,000 to $4,000 just for this. To find the best UI and UX designer, we hired people from Behance. Surprisingly, Behance offers a good opportunity for freelancers; it's a freelancing platform now as well. We found a few people that we liked and hired them for test tasks, paying $50, $100, or more to show us their design skills. After a couple of weeks, we found someone we really liked, discussed pricing and budget, and finally contracted with this person to start designing the UI.
We chose to design at the end because, at the beginning, if we had a concept of a product, iterations often change the whole concept of the platform. That's exactly why we started with development. We started with a design that wasn't great but was good enough to show to acquaintances. If we really needed to get to the masses, we needed the UI, and it's perfect to do it at the end when all the development is 80% finished. That's why I burned a decent amount in building a SaaS.
Execution and Persistence: The Keys to SaaS Success
Based on my experience, what any SaaS developer or founder is looking for is product-market fit. Will the market accept the product and actually pay for it? Market research makes it a little easier, and your network makes it an easier gamble as well. But for a company to actually grow and scale, there are things you can't control. The alpha version or early versions won't be perfect. Some people will stay with you, but most will bounce away. If people stay, that's a huge achievement—you know you have something going on. You can always enhance your product.
When Fiverr started, it wasn't great.
When Upwork started, it wasn't great.
Heck, when Google started, it wasn't great.
But in time, they perfected and perfected because entrepreneurship is about execution.
We intend to execute properly over the next five years. Any SaaS is not a project of a year or two; it's a long-term project. We intend to perfect it, follow our users who subscribe to our platform, and believe in our product and vision. We always want to benchmark ourselves against our competitors. That's why it costs this much, and that's why it could easily go down the drain if people don't accept it.
But even if it does, the truth is, execution and persistence win every single time. Have you ever heard of a company that invested a good amount of money in the business, kept working on it for a very long time, and then actually lost revenue? Profitability is another thing, but revenue—if you keep persisting in a proper way—you'll always grow in revenue.
The biggest example is Adam Neumann and WeWork. They were growing in revenue but were never going to be profitable, and that's why they went bankrupt. The truth is, the company makes money. It just took a lot of money from lenders and VCs to scale and grow internationally. Now, they're losing a bit when it comes to profitability, but in terms of revenue, they're making money. It's all about execution. Some people execute poorly, some execute smartly, but execution and persistence always win in the long run.
Thank you for sharing this business cost distribution!