The Number One Mistake Companies Make When Building A SaaS Product
When you decide to work on a digital product that didn’t exist before you got the idea, it is no easy task. Running a business is tough, but building it from scratch is even more challenging.
Over the last few years, we worked with dozens of companies helping them design and build digital products and services. We came across many common mistakes, but there was one that has cost businesses tens of thousands of dollars in labor as well as missed opportunities – not investing in the quality UX/UI design and customer research upfront.
Most startup founders are experts in the domain or have experience in the adjacent industries who realized that they could solve a specific market problem. So what happens next is that the founders start designing and developing the product based and their assumptions and their vision of how the solution should function without receiving feedback from their target audience.
There are multiple reasons why companies make this mistake:
- They might not be aware of the proper product research and design process.
- Founders might think that they know best since they are intimately familiar with a problem and already have envisioned a solution. Their assumption is, “I know the market well, I don’t need to do any more research.”
- They are rushing to get the MVP out of the door and think that they can fix the issue later.
- They are not thinking how designing a product in a vacuum can increase development costs and delay time to market down the road in the next 6 to 12 months.
When the founders finally take their finished MVP to the target market after spending six to twelve months building it in isolation, no surprise that the feedback they get from their customers is less than favorable.
Typical areas that cause the most customer friction are:
- The language does not match the industry jargon.
- User flows do not match the processes that the customers follow on a day-to-day basis.
- The product overall does not match client expectations or doesn’t solve their problem.
Even if you’re an expert in your domain, you need to remember that you design products for your customers and not for yourself.
If you have to go back and redesign parts of your solution, you have to spend additional time and resources. For example, if it took you a year to build your product and you’re not a technical founder, you had to hire two full-time developers to make the product, you have invested about $200K into a product and spent a year doing it.
After you collected feedback from your customers, you have to redesign and rebuild parts of the application, which can take you anywhere from a couple of months to another six months to a year. Let’s make a conservative estimate and assume that it takes you 2 months to redo one of the features for your product.
Assuming that the average cost of hiring a developer is $100K/year, a month of development will cost you $8,333, then $8,333 * 2 developers * 2 months equals about $33.3K in the labor cost. Also, don’t forget about the opportunity cost. If you can start selling your product 2 months sooner, and your monthly revenue per customer is $1000, and you project 5 sales per month, that equals 2 * 5 * $1,000= $10,000 in lost sale opportunities.
You might also hire a professional designer, and redesign the portion of your app, which could cost another $5K to 15K.
By not investing in a proper UX/UI design and customer research beforehand now, you just wasted approximately $50-$60K in extra labor cost, sales, and lost time that you spent fixing the mistakes that you made. At this point, while you’re making revisions, one of your competitors could beat you to the market.
The main thing you should keep in mind is further in the design process you go, the more expensive it takes to fix the mistakes.
If we discuss an idea verbally, we can adjust the approach on the fly. If we sketch an idea on paper, it can take us from a few minutes to a few hours to brainstorm a better solution. If we are already in the UX/UI design phase and working on high-fidelity mockups, it can take us a few days to a couple of weeks to redesign something. And if we are already in the software development phase, then it can take us weeks or months to fix the problem.
By overlooking this crucial step and not investing in proper user research or collecting customer feedback during the UX/UI design phase, you can lose tens of thousands or hundreds of thousands of dollars only because you wanted to save 10K to 20K. If you can invest 10-20K in the proper design and customer research upfront, it will help you save tens and hundreds of thousands of dollars down the road. That’s the 5-10x return on your investment.
On top of everything, when you look back at it in a year, you’ll see that getting professional design not only helped you create a better quality product that resonates with your target audience but also helped you start selling earlier. You can use the high-fidelity interactive UX/UI prototype to start doing sales demos so you can begin making pre-sales or get the letters of intent from your customers.
You can also increase the customer retention rate because your audience loves your product, which matches their expectations, solves their problem, and is easy to use. You will make your investors happier and more confident that their money will multiple with you because you’ll be on the right track to grow the company and get the sales.
To summarize, don’t make a mistake of skipping the proper UX/UI design and customer research step and so you can save yourself time, money, and headache down the road.
If you want to talk about designing digital a product or service that you are working on or a design audit for your existing products or service, send us an email at email@example.com.