Characteristics of Successful SaaS Products

Recently I was having a conversation with an entrepreneur about the most common characteristics of successful SaaS products. Thinking about some of the largest SaaS companies, including Salesforce.com, NetSuite, HubSpot, MailChimp, WorkDay, and Zendesk, there are a number of similar product attributes:

  • Workflow System – End-users use the app on a daily basis and “live” in the product to do their job. Daily active users are key.
  • Clear ROI – The product’s value is inextricably tied to a return on investment making it a must-have and not a nice-to-have.
  • Multiple Markets – The product is applicable to a wide range of companies in multiple markets. Typically, it starts out more niche, gains traction, and then expands into adjacent markets.
  • Account Expansion – Upsells and account expansion outweigh churn. Product value grows as usage grows (e.g. more seats/users, more transactions, etc.).

The most successful SaaS products have these four characteristics. When evaluating product ideas, consider these attributes and assess the potential.

What else? What are some more characteristics of successful SaaS products?

One thought on “Characteristics of Successful SaaS Products

  1. I disagree with #1…ONLY in context is “daily active users” important. Not all SaaS products are even built for daily usage. No surprise, ours is not. Our users are heavy users for about a week in the middle of the month but have no reason to use for the last 2 weeks of the month so following that metric would lead to bad decisions. The last 3 items are spot on in all contexts, I believe.

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