How Do You Come Up With a SaaS Startup Idea?

Two principles apply to all ideation processes:

1. You need to find a gap in the market. It’s extremely crowded.

2. You need to have an unfair advantage in that domain. That depends on your expertise and domain knowledge.

I strongly recommend that you build on top of an existing platform. It would be much cheaper. However, you can only do so in a domain where there’s a gap, and where you have expertise. If you want to build on top of the Shopify platform, you need an e-commerce idea that addresses a white space.

For more, read PaaS: Bootstrapping by Piggybacking.

A great example here: Best of Bootstrapping: Bootstrapping by Piggybacking from Romania

Case studies of others that were built this way are:

A Late Bloomer on Building a Legitimate Unicorn: Veeva Systems CEO Peter Gassner

Thought Leaders in Cloud Computing: David Schmaier, CEO of Vlocity

Bootstrap First with Services, Raise Money Later: John Stewart, CEO of MapAnything

There are great PaaS platforms out there to build companies on top of. You can read this more comprehensive overview of your options: Cloud Stocks: The PaaS Landscape

One thing you must consider: there are 200+ SaaS companies that have $100M+ ARR already. About 60 of these are public. In the next 18 months, likely, another 20–40 would go public.

Another 200+ companies have $50M+ in ARR. These would go public in the 3–5 year window.

So, by 2025, we’re looking at 400-500 public SaaS companies.

The ones who would thrive and continue to grow would be the ones with deep moats based on their PaaS strategies

Your best bet would be to build on one of these platforms in a capital-efficient way and get acquired with a strategic multiple. Or go bigger and go public.

Veeva was built with just $4M in funding on the Force.com platform.

Photo by Kristopher Roller on Unsplash