SaaS Startup Development: How to Build an MVP for a Subscription App

Updated on: 20th May 2025

The modern digital-first environment provides strong opportunities for businesses engaged in saas startup development. Statista projects that the global SaaS market will expand from $317 billion in 2024 to reach more than $474 billion by 2028. Before seeking to duplicate Dropbox or Canva success, every founder must first create a Minimum Viable Product (MVP).

What Is a Minimum Viable Product?

The Minimum Viable Product represents a basic version of your product which contains essential features to meet the initial customers and confirm your business concept.

The creation of an MVP stands as a vital necessity for every entrepreneur who launches SaaS startup development initiatives. The process enables:

Faster product launches
Gathering user feedback for product improvements
Prevention of investment in unprofitable mistakes

This guide provides:

Instructions for creating SaaS MVPs
An overview of SaaS product development stages
Examples of successful implementations
Best practices in SaaS application development
Insights into how your SaaS business model influences MVP planning

Why Start with an MVP?

The concept of MVP stems from Eric Ries’ Lean Startup approach. The basic principle behind the method requires developers to deploy a stripped-down version of their product to verify essential assumptions through minimal resource expenditure.

For SaaS application development, you need to establish a basic functional cloud-based solution which:

Let users interact
Triggers payments if monetisation is part of the MVP

Benefits of an MVP for SaaS:

Faster time to market
Lower development costs
Immediate user feedback
Early validation of product-market fit
Attract potential investors with traction

Example: Dropbox is a textbook example. Before developing any backend code, Dropbox released their MVP as a basic video demonstration that showed what their product would accomplish. This strategy helped them obtain over 70,000 email signups.

Step-by-Step Guide to Building a SaaS MVP

1. Define Your Core Problem

Your first step should be to determine the precise difficulty your product will resolve. Avoid developing generic tools. Focus on a specific market segment with unaddressed needs.

Example: Calendly focused on helping solo professionals schedule meetings. Their MVP contained only one solution: automated scheduling.

2. Research Your Market and Audience

Begin with competitor analysis and identifying your target users.

Useful platforms:

G2
Capterra
Reddit
Indie Hackers

Ask questions like:

What features do users want most?
What are they frustrated with in the current solutions?
How much are they willing to pay?

3. Choose the Right SaaS Business Model

Your SaaS business model determines the necessary design elements of your MVP.

Common models:

Freemium (e.g., Mailchimp)
Free trial + Paid plan (e.g., Zoom)
Tiered pricing (e.g., HubSpot)
Usage-based pricing (e.g., AWS)

Structure your MVP with:

Limited functionality
Trial periods
Upgrade procedures

4. Prioritise MVP Features

Only include essential features.

Use the MoSCoW method:

Must-have: Core functionality (e.g., sign-up, main feature)
Should-have: Important but not vital (e.g., user profile)
Could-have: Nice to include later (e.g., analytics dashboard)
Won’t-have (yet): Post-launch features (e.g., mobile app)

Example: Buffer launched with two features—tweet scheduling and queue viewing. All other processes were handled manually.

5. Design a Simple, Usable Interface

A poor UI can kill a great product.

Tools to use:

Figma
Sketch

Design focus:

Minimalist onboarding
Clear CTAs (calls to action)
Easy navigation
Accessible design (ADA-compliant if needed)

Great design is intuitive, even if not perfect visually.

6. Choose the Right Tech Stack

Pick frameworks and tools that are fast and scalable.

Typical MVP tech stack:

Frontend: React.js or Vue.js
Backend: Node.js, Django, Ruby on Rails
Database: PostgreSQL, MongoDB
Hosting: AWS, Google Cloud, Heroku
Auth: Firebase Auth, Auth0
Payments: Stripe, Paddle

Tip: Use low-code tools like Bubble or Backendless if you’re not a developer.

7. Build and Test Your MVP

Build only what’s needed. Use Agile sprints or Lean Kanban.

Types of testing:

Unit testing (individual functions)
Integration testing (multi-component flows)
User testing (preferably with paying users)

Tools for feedback:

Hotjar
Intercom
Typeform

8. Launch and Market the MVP

Launch to a small group of early adopters.

Incentives:

Free trials
Beta access
Exclusive content

Marketing channels:

Product Hunt
Reddit (r/SaaS, r/startups)
LinkedIn
Founder communities (e.g., Indie Hackers)
Email lists and newsletters

Case Study: Notion started as invite-only, generating buzz and word-of-mouth marketing.

9. Measure and Iterate

Use KPIs to assess your MVP:

Activation rate: % of users completing key actions
Churn rate: % of users canceling subscriptions
Customer Acquisition Cost (CAC)
Customer Lifetime Value (CLV)
Net Promoter Score (NPS)

User feedback will guide the next development phase and roadmap.

Common SaaS MVP Mistakes to Avoid

Overbuilding: Adding too many features too soon
Under-validating: Skipping user feedback
Ignoring onboarding: Leaving users confused and unengaged
Poor tech choices: Using platforms that don’t scale
Neglecting retention: Focusing on acquisition over value delivery

Successful SaaS MVP Examples

Slack: Started as an internal tool. MVP focused solely on team messaging.
Airtable: MVP featured basic spreadsheet/database hybrid—no integrations.
Canva: Early version had basic drag-and-drop design and limited templates. Attracted 750,000 users in its first year.

Scaling Your MVP Into a Full SaaS Product

The successful proof of your MVP’s value and market adoption leads to its transformation into a complete SaaS platform. At this phase, the company must implement more than feature additions because it needs a clear roadmap combined with solid infrastructure and a customer success focus.

1. Analyse MVP Insights Deeply

Before starting development of new features, review all information gathered throughout the MVP phase. Examine how users behave together with their retention patterns and their support requests. You should focus on identifying which features users actively employ and which features create conversions and engagement. The full product development will use actual evidence instead of theoretical assumptions.

2. Create a Scalable Product Roadmap

A well-developed roadmap should prioritise essential features before adding desirable ones in a specific order. Future development should follow a quarterly goal structure. For example:

Q1: Improve onboarding and support for self-serve growth
Q2: Add integrations with key platforms (e.g., Slack, Zapier)
Q3: Launch mobile app or offline access
Q4: Introduce advanced analytics or team features

Stay agile and continually adapt based on user feedback and market changes.

3. Upgrade Your Tech Stack and Infrastructure

When moving from an MVP to a full SaaS platform, you typically need to redesign your backend systems for improved performance and security. You need to:

Migrate from shared hosting platforms to Kubernetes or containerised infrastructure.
Create automated deployment systems which enable regular updates while maintaining safety standards.
Enhance database operations while implementing caching systems to boost performance.
Data encryption needs strengthening along with GDPR and HIPAA compliance implementation.

4. Invest in Customer Support and Success

Your initial users will transform into long-term customers at this point. Your product should provide proactive onboarding experiences and in-app support, as well as extensive knowledge bases. A customer success team established at this phase decreases user churn and generates strong advocacy among customers.

5. Revisit Pricing Strategy

Your original MVP pricing model becomes obsolete after adding new features. Assess your delivered value and adjust pricing tiers to match customer segments along with their usage levels. You should run A/B tests on new plans while providing yearly discounts to customers because this increases their long-term value.

Funding Your SaaS MVP Journey

Bootstrapping vs. Seeking Investment

The funding approach you choose significantly impacts your MVP development strategy and timeline:

Bootstrapping Advantages:

Complete control over product vision and company direction
Forces disciplined spending and revenue focus
No pressure from external stakeholders for rapid growth
Allows development at a sustainable pace

Investment Advantages:

Faster development timeline and market entry
Resources for simultaneous feature development
Ability to hire specialised talent earlier
Marketing budget to accelerate user acquisition

Case Study: Basecamp (formerly 37 signals) bootstrapped its way to profitability, prioritising revenue from day one and growing organically. In contrast, Slack raised significant funding pre-launch, enabling rapid development and explosive growth, but with greater pressure to scale quickly.

Smart Financing Strategies for Early-Stage SaaS

For founders navigating the funding landscape:

Revenue-first approach: Design your MVP with monetisation in mind from day one, even if you offer free tiers
Strategic pre-sales: Sell annual subscriptions before full development to fund ongoing work
Grant programs: Explore innovation grants, accelerator programs, and startup competitions
Angel investors: Consider strategic angels who bring industry connections, not just capital
Alternative funding: Revenue-based financing and SaaS-specific funding platforms like Pipe or Clearbanc

Building the Right Team for SaaS Success

The composition of your early team dramatically influences MVP development success. Unlike traditional software projects, SaaS requires specific expertise:

Critical Roles for SaaS MVP Development

Technical Roles:

Full-stack developer with cloud architecture experience
UX/UI designer with SaaS platform expertise
DevOps engineer focused on scalability and security

Business Roles:

Product manager with subscription model experience
Customer success specialist for early adopter engagement
Growth marketer specialising in SaaS acquisition models

Outsourcing vs. In-House Development

When deciding between building an in-house team or outsourcing:

Outsourcing Benefits:

Faster time to market with experienced developers
Lower initial costs without full-time salaries
Access to specialised expertise for specific components

In-House Benefits:

Better alignment with product vision
Stronger institutional knowledge retention
More flexibility for rapid iterations
Foundation for long-term product development

Hybrid Approach: Many successful SaaS startups use a hybrid model—core team in-house with specialized outsourcing for specific components.

Risk Management in SaaS MVP Development

Beyond technical development, managing business and operational risks is crucial for SaaS MVP success:

Legal and Compliance Considerations

Even at the MVP stage, compliance matters:

Data privacy regulations: GDPR, CCPA, and other regional requirements
Industry-specific compliance: HIPAA for healthcare, SOC 2 for enterprise SaaS
Intellectual property protection: Patents, trademarks, and copyright considerations
Contract structures: Terms of service, privacy policies, and subscription agreements

Security From Day One

Security breaches can kill SaaS startups. Essential security measures for your MVP:

Authentication system security: Password policies, MFA, session management
Data encryption: Both in transit and at rest
Access controls: Proper permission structures
Regular vulnerability scanning: Even for MVPs
Compliance with industry standards: SOC 2, ISO 27001 frameworks

Financial Risk Management

Cash flow challenges unique to SaaS startups:

Customer acquisition costs (CAC): Tracking and managing acquisition spending
Churn prediction and prevention: Early warning systems
Payment processing risks: Failed payments, chargebacks
Subscription metrics monitoring: MRR, ARR, LTV tracking

From Local to Global: SaaS Expansion Considerations

Even if your initial MVP targets a specific market, planning for future expansion pays dividends:

Geographic Expansion Planning

Design your MVP with future international growth in mind:

Localisation architecture: Supporting multiple languages and currencies
Regional compliance considerations: Data residency requirements
Payment system flexibility: Supporting regional payment methods
Time zone handling: For both product functionality and support

Vertical vs. Horizontal Expansion Strategies

Two primary paths for growing beyond your MVP:

Vertical Expansion:

Deeper functionality for your initial target market
Additional features serving the same customer segment
Premium tiers with advanced capabilities

Horizontal Expansion:

Adapting your core solution for adjacent industries
Creating specialised versions for different market segments
Building an ecosystem of complementary products

Case Study: HubSpot began with a focused marketing automation MVP but planned their architecture to support expansion into sales and service hubs, creating an integrated platform over time.

Preparing for Post-MVP Challenges

The journey from MVP to mature SaaS product involves navigating predictable challenges:

Technical Debt Management

Balancing speed and sustainability:

Code refactoring strategies: When and how to rebuild components
Architecture evolution planning: Microservices transition points
Testing automation implementation: Shifting from manual to automated testing
Documentation requirements: Technical and operational knowledge capture

User Experience Evolution

As your user base grows beyond early adopters:

UX maturity progression: From functional to delightful experiences
Personalisation implementation: Tailoring experiences for different user segments
Feature discoverability challenges: Helping users navigate increasing complexity
Accessibility compliance: Meeting standards as you scale