How Much Does it Cost to Build a Successful SaaS?
In this interview, Peter chats with Jeroen van der Horst about the cost to build a successful SaaS product nowadays. Jeroen is the Co-Owner of Proshore, a company that helps accelerate SaaS growth with ready-to-code dev teams.
Jeroen shares valuable insightful on:
- Budgeting Your SaaS Build: Discover the costs and considerations behind developing a simple MVP versus a more complex SaaS product.
- Scaling Smart: Learn how Proshore supports both early-stage startups and post-MVP companies, delivering a ready-to-go development team and expertise to accelerate growth.
- Building the Right Team: Insights into structuring a high-impact development team
Grab a coffee, take a 15-minute break, and enjoy these valuable pieces of advice for SaaS Founders!
Check out all our SaaS Founder Interviews here on our YouTube channel.
Introduction and About Proshore
Peter Loving: Okay, so, I’m here today, speaking with Jeroen from Proshore. Hey, Jeroen, thanks for joining me. Would you like to introduce yourself? Tell us who you are and tell us a bit about what you do?
Jeroen van der Horst: Yes of course thanks to Peter for I’m Jeroen van der Horst, I’m co-owner of Proshore and Proshore is not a SaaS but we actually are a development house for SaaS. I’m myself responsible for sales and marketing. And together with three other business partners we run in Proshore and Proshore is a Dutch Nepalese Company. And that means that most of our developers based in Nepal.
Peter Loving: Okay you have a Nepalese Dev team, what’s it like working with development teams in Nepal?
Jeroen van der Horst: Yeah. of course, it’s very different than out here. It’s but it is a very friendly county. People are amazing happy all the time. And yeah, I love to work with different cultures. I always did already so actually, yeah, I don’t know. it’s a great thing.
Peter Loving: Okay since you guys have worked on building a lot of SaaS right?
Jeroen van der Horst: Correct. Yeah.
The Cost to Build a Successful SaaS
Peter Loving: First thing I wanted to ask you is what is the cost to build a SaaS application? How much does it cost?
Jeroen van der Horst: It’s a very complex question and it’s a very wide question. Because of course, there are SaaS businesses.. But let’s talk about early MVPs to be built. And what we see in a lot of a SaaS Founders. They spend for a very simple SaaS product around between 50 and 150k to build a kind of first MVP version. And then, the more complex SaaS product. We see this, they spend around 150 to 250k to really realize the product. And of course, there are kind of exceptions and different way of working, how you could develop a kind of SaaS product. This is a little bit to give a kind of idea…
Peter Loving: Yeah. That’s a great range.
Jeroen van der Horst: what it costs to build a product.
Peter Loving: So for the simpler SaaS, you could get from 50 to 150k and that would launch your MVP and…
Jeroen van der Horst: Exactly.
Building SaaS: Considerations and Budget
Peter Loving: then more complex, you’re looking at 150 to 250K. Are you just considering the development costs? I know that you guys just focus on Dev, so does that factor in the cost for design?
Jeroen van der Horst: Yeah.
Peter Loving: or are you just talking about the cost of that development?
Jeroen van der Horst: I talk about product development and of course, it really depends on how you exactly balance the team. So what we are focusing on is, if you launch a kind of early MVP SaaS production, you need a kind of full stack development team. That consists of a front end developer back end developer and a Scrum Master in order to have a full function development team. And on top of that, of course you can work with a party where you’re, from UserActive to get beautiful design and include that inside of the team and do delivery with beautiful design.
It really depends where you put accents, but to have a kind of full stack development team from using our services that will cost you around 12k per month. And to release the MVP, you can really release the MVP in two , three months, a very simple MVP in some extra months to adapt on change, and to see how the product exactly lands in the market and to do some tricks. So that’s how I come to kind of very simple version of 50K. Yeah.
Peter Loving: Yeah okay and yeah on our side we factored in design and we just focused on design. So I probably say that on our side. If I’m just coming up with an idea of budget from the top of our head, maybe on the lower side, we’d go say from around 30 to 70K, the simple and simpler MVP. Then from 70 to 150, for quite a complex SaaS product. We always think that design doesn’t cost as much as the development work. There’s more complexity and more to do. I think in the Dev work
Peter Loving: But I’d say probably around half the costs for the design. So then you can get an idea of a total budget, for I would say, that would be a high quality product to launch into the market. If you’re working with teams, like, Proshore and our team. So which stage… I know you just mentioned MVPs for early stage. Is that the kind of stage of Proshore that you guys typically work with?
Jeroen van der Horst: Actually we work broader,…
Peter Loving: Or is it broader for you?
Working with Proshore at Different Stages
Jeroen van der Horst: We work for early MVPs because you can add a lot of value there. What we see it early MVPs is quite interesting environment because they don’t have to branding to attract the right developers. They also don’t have the time to do that. Processes are not yet mature and so on. So actually without kind of full service product, actually, the service that we deliver, we make sure there is no hiring efforts, no management efforts and no training efforts for people.
So actually, they get a kind of full stack development team with all the processes, very mature to deliver product to market, so that gives a lot of value for early early startups.
Jeroen van der Horst: But what we see… Because it’s very hard to attract enough software development capacity. So we also had a lot of value in a later stage. So post a post MVP where we actually more delivering teams for scaling SaaS.
Peter Loving: Yeah. I see a lot of value in that because you save a lot of time from the teams that you work with. Because you guys manage that process, you’re also bringing highly skilled developers that you already managed to have a process with. So it means you can get up and running fast, all right, for the team and also… You have that transferable knowledge of building a lot of SaaS applications so you can come with those skills. So a team that’s kind of new to development. It gets a lot of benefits from working with you guys and…
Jeroen van der Horst: That’s it.
Peter Loving: Then like you were saying, that the later stage teams who are scaling up, maybe their challenges finding talent quickly and hiring them, whereas they can kind of use you guys as a team that plugs into their team and extends their resources with an already skilled team that can be up and running quite quick.
Jeroen van der Horst: Yeah.
Market for Developers in SaaS
Peter Loving: Hey what is the market currently for developers in SaaS?
Jeroen van der Horst: Of course, the SaaS market is a little bit cooling down and we see that. I expect to gain a lot of developers on the market, but actually, we see that not happening. It’s still cost a lot of time for basically, we see at our customers, but also in the network, we see that actually companies will still spend a lot of time hiring developers, at least a few months to hire a good qualified developer. Actually, maybe it’s as well because we talking about this early stage startups and they don’t have the branding and all the things to actually be as fast into the market nad they don’t have the money to actually use this recruitment agencies to
Jeroen van der Horst: to actually hire developers and developers fast. And what we try to do is at least and we trying in Nepal to really build a kind of talent pool where we have around 3,000 prevetted developers in our talent pool. We organize different activities for them so actually, we know them and that’s a kind of long term investment where we are able to, out of the market, really get in a few weeks qualified developers out of the markets. Of course, within our organization we also develop a lot of that and within teams at different customers and through our bootcamp programs that we have. So actually we make sure there’s always a stream of good young professionals, people, we can get out of the market and people that grow in our organization and that’s ready for a kind of new challenge.
Processes and Practices for SaaS Development
Peter Loving: Okay, Awesome. Hey, what kind of processes and practices do you recommend for SaaS companies, building or scaling their development team? What are the things that work for you guys in terms of a process and best practice working with Dev teams?
Jeroen van der Horst: Basically you have to build a team. It’s not just about adding developers to your team and then actually you do more delivery and so on, you create more capacity. I think it’s really about having the right people on board, create a culture, have a culture fit with each other.
Jeroen van der Horst: Next to that, of course, there are a lot of processes that actually, we believe in and that really help in the kind of scaling phase. So SCRUM and agile processes really should be done on a good level, should be over communication. Clear goals. All these standard things and of course acknowledgment. We are actually a separate entity and we are a service company to our customers. A lot of our team members actually feel part of the goals and the goals and identity of our customers. So I see when I go to Nepal and when I visit our office there, then there’s people wearing merch of our customers. the people feel connected with the customer they’re working with. Yeah.
Structuring a Development Team
Peter Loving: Hey Awesome. That also brings me to the next question of how you structure a development team. So how do you guys do it at Proshore or do you group together certain numbers of developers to make a unit? What’s the mix of developers that you see working well? How do you kind of scale teams if one of your clients needs more? So do you tend to add fixed units of developers? How does that work?
Jeroen van der Horst: So actually, basically with customers, we try to have a kind of minimum unit of three developers and to create a kind of full stack experience. So in our opinion, the best development team is the team that actually can take initiative and responsibility and deliver a product itself. And that is not dependent really on kind of external factors because they need to be able to take ownership. To further structure in a later kind of phase. Of course, we have to balance it right out. So we would like to have juniors in the team to develop our talent. Or mediors to make the mediors, seniors and make juniors mediors and so on, so kind of training mechanism in that balancing different roles.
Jeroen van der Horst: So we very carefully, together with our customers, try to balance out the team in the right way. To create right structure and to create unique kind of team that really can deliver software. So, maybe separate from other outsourcing companies. Because we sometimes, we are in this category of outsourcing, we see a lot of outsourcing are really treating their developers as a kind of resource and give tasks can be a execute task. We really don’t want to do that. We really want to be a kind of team that this refinement comes with solutions, comes with designs, proposes something,, implement things and really take ownership to make beautiful pieces of software, and a good delivery.
Tips for Working with an Outsourced Dev Team
Peter Loving: Okay. Hey, it’s been awesome to chat with you. Thank you for joining me. Is there any tip that stands out before we wrap up for developers? Thinking about working with an outsource Dev team for the first time? Is there anything that you would suggest for them to prepare or how they could approach it? That might be useful.
Jeroen van der Horst: Wow, to prepare not really. We have a kind, but actually there’s one thing. There are a lot of companies in the space that always play good weather. Our development is awesome. And I think actually the best tip and if you talking with different partners or different people is just be open and share your troubles. Basically that only reveals a good conversation with each other.
Connect with Jeroen van der Horst and Proshore
Peter Loving: Great. Hey, Jeroen. How can people connect with you if they’re interested in learning more about SaaS development or they want to work with Proshore?
Jeroen van der Horst: You can find me on LinkedIn. There’s probably a link somewhere here or later…
Jeroen van der Horst: Of course, you can send the email to Jeroen@Proshore.nl. We offer a very quick chat that you can plan to our website on Proshore or now to talk about your challenges.
Peter Loving: Okay, thanks for joining me today Jeroen.
Jeroen van der Horst: All right, thanks. All right, Bye-bye!
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