The unfortunate misconception about SaaS apps is that the value is in the code. It rarely is.
With the arrival of cloud computing, and languages like Ruby on Rails (and even PHP these days) that can quickly build an app from re-usable 3rd party code, the app itself has almost no value unless you’ve found a way to achieve something technically that few others could.
A SaaS company’s value is therefore primarily in it’s
- Team – a good team of engineers can be acqui-hired while a good founding team will often be easy VC bait.
- Users – even if they’ve not yet been monetized.
- Cashflow – even if the company hasn’t yet reach profitability
The reality is, without at least one of these three things, you have nothing.
Buyers who would pay for your idea, could quite easily pay the same amount for the development of what you already have minus the flaws.
If you believe the product is solid, but you’re pre monetization with a good idea and bad business model, then my best advice would be to develop the business model first. Do a search for interviews by Jason Cohen and Eric Reis. They’re the best speaker I know on the topic of customer development and how to find what works.
Best of luck.
