SaaS Reality Check:

Talk to Potential Customers (Not Just Your Friends) 

Your mom might think your idea is excellent, but she's not your target market. Get out there and talk to the people who would actually use your product. 

• Set up interviews with potential customers in your target industry 
• Ask about their current processes and pain points 
• Present your idea and get honest feedback 

Nathan Gray, Co-Founder at Meshcomm Engineering, emphasizes the importance of listening: "Too often as founders we get too excited about how our idea will help. We really need to listen first. When you first start talking to people, you probably shouldn't even bring up your idea. But be prepared with questions to help refine the problem." 

Gray suggests asking probing questions to understand the issue better: "Ask what a customer would pay for a solution to the problem (again, don't pitch a solution). Find out if they have already attempted to build a solution. What is this problem costing them today?" 

Validate the Problem, Not Just Your Solution 

It's easy to fall in love with your own idea. But make sure you're solving a real problem that people care about enough to pay for. 

Paul Graham, co-founder of Y-Combinator, puts it perfectly: "What I tell founders is not to sweat the business model too much at first. The most important task at first is to build something people want. If you don't do that, it won't matter how clever your business model is." 

With that in mind, ask yourself: 

• Is this a "must have" for your target customers? 
• How are they currently solving this problem? 
• What would make them switch to a new solution? 

If you can't find people actively looking for a better way to do things, you might be trying to solve a problem that doesn't exist. 

Create a Minimum Viable Product (MVP) 

Hold off on building the complete product. Start with the bare minimum features that solve the core problem. 

• Outline the essential features that address the main pain point 
• Build a simple prototype or even just mock-ups 
• Get it in front of potential users for feedback 

This approach lets you test your idea without overcommitting resources. Nathan Gray explains the purpose of this stage: "What you are really trying to do here is to prove two hypotheses. The first hypothesis is your product hypothesis - that your product actually solves the problem. The second hypothesis is that your product solves a problem that people actually want solved and are willing to pay for to be solved. They need to feel like they 'must have' this product." 

Be Realistic About Your Timeline 

Building a SaaS product takes time. Don't promise features you can't deliver. 

• Break down your development process into realistic phases 
• Add buffer time for unexpected issues (because they will happen) 
• Communicate clearly with potential customers about your launch timeline
  

Consider the Financial Side 

Your idea needs to make business sense, not just solve a problem. This is where SaaS financial services can be invaluable. 

• Research the market size and potential customer base 
• Estimate your costs for development, marketing, and operations 
• Project potential revenue based on realistic pricing and adoption rates 

Make sure the numbers add up before you dive in. Consider consulting with experts in financial management for SaaS companies to ensure you're on the right track. 

Be Open to Pivoting 

Your initial idea might not be the winner, and that's okay. Be prepared to adjust based on feedback. 

• Listen to what potential customers are actually asking for 
• Be willing to change direction if you discover a better opportunity 
• Don't get so attached to your original idea that you miss out on something great 

The most successful SaaS companies often look very different from their founders' first ideas. 

Wrapping Up 

Vetting your SaaS idea takes work, but it's worth it. By talking to real customers, validating the problem, starting small, being realistic about timelines, considering finances, and staying flexible, you'll dramatically increase your chances of building something people actually want and need. 

Remember, it's better to vet your idea now than to spend months or years building a product nobody will use. Proper financial management for SaaS companies starts at the idea stage, ensuring you build a sustainable business from day one. 

Gray offers a final piece of advice for finding your ideal early customers: "What you are looking for at this stage are early evangelist customers. These are customers that meet the following criteria: 

1. They have a problem 
2. They know they have a problem 
3. They are actively looking for a solution 
4. They have attempted to create a solution for this problem 
5. They have or can acquire a budget for a solution to this problem" 

Got a SaaS idea you're working on? We're here to help. Reach out to us if you need assistance thinking through the financial side of your startup journey. Our SaaS financial services can help you navigate the complexities of launching and growing your business. Let's work together to turn your idea into a thriving SaaS company.