Fast-track your SaaS Startup with the AWS SaaS Factory

From Salesforce.com through Hubspot, Slack, Xero and a multitude of others, SaaS has become the dominant model for delivering software, and a massive entrepreneurial opportunity.

McKinsey offer a particularly powerful insight on this, highlighting how even non-tech companies can expand into this market, citing the Washington Post as an example, who spun out their content-management system, Arc XP, as a SaaS product.

They highlight the relatively simple potential to execute: the asset-light nature of SaaS means it has lower overhead and logistical costs than physical products, and it frees traditional companies from doing some of the most complicated technical work by themselves—they can partner with major cloud service providers.

They describe the huge market opportunity:

The global SaaS market is currently worth about $3 trillion, and our estimates indicate it could surge to $10 trillion by 2030.

The median revenue growth rate of 100 public SaaS companies in the United States with revenues above $100 million was 22 percent as of mid-2021, with the top quartile’s growth rates above 40 percent.

Cyclr documents the different types and industries where SaaS is dominating, exploring the different types of app categories across horizontal and vertical functions. Enable reports that: companies spend $2,623 per employee per year on SaaS, 73% of organizations will be using all or mostly SaaS solutions by 2021 and 80% of businesses already use at least one SaaS application.

AWS SaaS Factory

Naturally AWS is one of if not the primary platform to consider building your SaaS venture on. They offer a dedicated SaaS Startup team and set of services, the ‘SaaS Factory‘.

The program is introduced in the feature video, presented by Peter Butsch, Sales Manager of AWS Singapore, and Aki Ranin, Co-Founder & CEO of Bambu, speaking on how to build a successful SaaS start-up, AWS.

At 0:44, Peter talks about the advantages of using SaaS and how it significantly impacts how enterprises consume software. He explains how enterprise software has not innovated as much as its consumer counterparts and how these enterprises are fed up with signing software contracts that don’t meet their expectations.

Some of the advantages he mentions are that; SaaS provides high margins and a predictable revenue stream for start-ups compared to big enterprises. For start-ups, the entry barriers are increasingly lower, and the speed at which SaaS can roll out features is faster than traditional software. This is because the logistics are much simpler, and SaaS has become more accessible through centralized deployments and companies like AWS.

SaaS Deployment Models

From 2:50 Peter delves into the three types of deployments companies choose on AWS. He starts with the Self-Service Multi-Tenant SaaS, where customers share infrastructure and databases. The onboarding processes are fully automated, and the companies can adopt the software without supporting sales or service functions.

He mentions that the second deployment of SaaS is called a Single Tenant SaaS, which puts customers into their virtual cloud with their database. Then he provides the third one, Lifts and Shifts Migrations, where he explains how AWS actively supports and advocates for multitenant SaaS.

At 4:24, Peter discusses observations he has seen working with start-ups over the years. They are stressing that product-market fit is the most important thing for founders. Some companies fail to clearly explain their value proposition to their clients, which leads to lousy conversion rates and misunderstandings of price.

He advises companies to understand the KPIs in their funnels and that SaaS is built around simple metrics of lead conversions, ARR, and customer retention. Those companies should aim to figure out how their modifications are in different industries and what these numbers look like in each Asian market.

Companies are only to scale their sales team if they find a repeatable sales process: lead sources and value proposition. He advises companies not to look like a local company if they are a self-service, that they shouldn’t limit themselves to their location only, and that they should go global or regional.

At 6:30, He advises companies to develop new norms and stick with those decisions as many companies fail to keep up in extreme situations. He also advises firms to keep their eyes on multitenant SaaS; he believes that a company with aspirations of having more than twenty customers may need this service to keep up with deployments and updates on SaaS applications. He advises companies building multitenant SaaS to get good databases; AWS provides experts in building databases that can advise accordingly.

Peter advises companies to lean into AWS as the service provider, using their menu services and asking about security, scalability, best practices, and the core components of SaaS.

At 9:30, Peter talks about how AWS can support a business and how you can work with them. He looks at the various companies that look to venture into SaaS and what categories of companies the AWS works with. AWS has developed a program called SaaS Factory which gives you direct access to technical and business content, best practices, and architectures that can guide you and your team.

The program is free to participate for any start-up company and can be joined at all stages. In the SaaS factory, what is usually covered are product strategy, go-to markets, packaging, and pricing. They will build you a framework to get you on the path. This framework helps businesses extend their vision beyond technology and emphasizes business models that create excellent customer experiences.

At 12:04, Aki Ranin comes in to describe his company’s SaaS transformation journey they’ve been doing as part of the AWS SaaS factory program. He then briefly introduces his company, Bambu, and its primary operations. Aki clearly outlines why they needed SaaS, and he states that there’s usually a suitable time for SaaS, and it’s usually not early on.

They always knew they needed SaaS but needed a stop-gap while the demand was building up. The critical thing for his company was to be able to fix the backend, especially when the regulations are different in countries. They needed to take their time to do SaaS or not to do it at all. They had to set aside a dedicated team for this mission as the main focus was on scalability through multi-tenancy.

At 14:13, Aki confesses that migrating from single-tenant microservices to multi-tenancy wasn’t easy as it took them many attempts and about six months to get a working proof of concept. Through this, they had to compromise on flexibility since they were running out of time and money.

Many of the third-party APIs they needed to connect to was not designed to operate in multi-tenant systems.

Without multi-tenancy, the on-boarding time could be weeks instead of minutes which people are usually used to in SaaS and API systems. Aki advised viewers how AWS was essential in taking his business to a multitenant level and that joining the SaaS factory program would benefit your business.

At 17:32, Peter closes with a powerful pitch on joining their global AWS start-up program and shares success stories and a small list of companies they have worked with.

Conclusion

AWS Start-up program is poised to help businesses with customer services issues through multi-tenancy integration from single tenancy.

Though developing and finding the best talent might take some time, it is worth taking the risk. As Aki pointed out, onboarding time and access to global markets require multitenancy for much-required efficiency in this fast-paced business world.