Experts Share: Why Should Startups Choose SaaS Models?

When it comes to being a founder of a SaaS, or Software as a Service startup, Emilien Coquard, The Scalers’ CEO and Co-Founder shares, “One of the key areas for founders to consider from the very beginning is how you’ll manage access to crucial talent as the growth of the business takes off.

“In a challenging tech talent market, achieving the required early growth relies on reliable access to a growing headcount with the necessary skills and ambition to achieve the vision of a fast growth start-up.”

The right amount of planning, resources, and skills development makes it more likely for a SaaS startup to succeed. But why choose a SaaS model to begin with?

Why Is SaaS A Good Choice For Startups?

Businesses go for the SaaS model because for starters, the model is straightforward- it being a subscription-based model lets companies access what they need, as they go by paying usually monthly or yearly. This is a good solution for startups who may not have capital to fully invest in traditional software.

SaaS makes it so if needed, startups get the option to adjust their subscriptions based on their current situation. When the startup feels it is growing, it can easily take up the number of users or features they have access to.

And then likewise, in the case it needs to cut back, taking down the subscription is simple and doesn’t require extra costs or the need to cancel and repurchase software.

Our Experts:

• Pirkka Palomäki, Founding Partner, Maki.vc
• Cache Merrill, Founder, Zibtek
• Philip Alves, Founder & CEO, DevSquad
• Thomas Anglero, Founder and CEO, Too Easy AS
• Brian YIU, Hong Kong Company Formation Agent, Get Started HK Limited
• Tymen van Dyl, CEO and Founder, RoomRaccoon

Pirkka Palomäki, Founding Partner, Maki.vc

“Recurring business models such as SaaS provide steady and more predictable cash flows and lower barriers to entry for customers. However, as the increased use of AI introduces significant variable costs to the equation, we are now witnessing pressure to change from fixed monthly pricing to more transactional or value-based recurring pricing models.”

Cache Merrill, Founder, Zibtek

“SaaS-enabled organisations provide young businesses with a lean approach toward expansion as they do not require massive upfront capital expenditures. In terms of deployment with its growing SaaS IT industry, the UK provides numerous modern solutions that enable startups to concentrate on growth options rather than software maintenance.

“The subscription based revenue model help to cushion the companies by providing a consistent cash inflow which is critical during the formation stages of the startup. As such, for young companies that are eyeing international expansion, the SaaS model provides the opportunity to serve a geographically dispersed client base.”
 

Philip Alves, Founder & CEO, DevSquad

“Having developed over 100 SaaS products, I’ve seen firsthand how SaaS empowers startups to innovate without being bogged down by the traditional complexities of tech infrastructure. SaaS offers the freedom to experiment, pivot, and scale at a pace that aligns with the fast-moving UK startup scene.

“In my experience, SaaS isn’t just a product—it’s a mindset that’s built for agility. Startups, especially in the fast-moving UK market, thrive on the ability to pivot quickly and seize opportunities as they emerge. What SaaS offers is freedom: the freedom to innovate, experiment, and scale without being weighed down by massive upfront costs or infrastructure. For me, SaaS levels the playing field by giving startups the same tools that large enterprises use, but in a way that’s far more nimble and adaptable.

“I’ve seen startups get stuck in their own complexity—whether it’s building everything from scratch or investing heavily in tech stacks that are difficult to change later on. SaaS solves that by providing a frictionless path to growth. You don’t need a huge IT department or massive capital to get started; you just need the right product, the right strategy, and the right partners.

“That’s why at DevSquad, we’ve focused on building SaaS products that not only solve immediate needs but evolve with the business as it grows. In the UK, where the entrepreneurial spirit is strong, SaaS is perfect for founders who are ready to move fast and scale smart.

“For me, the most compelling reason startups should choose SaaS is the iterative advantage—you’re not locked into a one-time build. You’re constantly refining, improving, and expanding your software alongside your business. This dynamic approach gives startups the flexibility to respond to market changes in real time, whether that’s expanding into new territories or adjusting their service offering based on customer feedback. SaaS is less about the software itself and more about building a long-term strategy that’s future-proof.”

Thomas Anglero, Founder and CEO, Too Easy AS

“UK startups should only use SaaS platforms because they are already built, tested, scalable, interoperable, and much cheaper than building it yourself. UK startups need to focus on solving a problem and telling the world about it as soon as possible and as loudly as possible.

“Spending time and money on building your own SaaS platform doesn’t reflect innovative thinking in 2024. Investors will not invest because it shows leadership does not have the business experience to handle any future investment. Trust is lost and that is something no startup can survive without.”

Brian YIU, Hong Kong Company Formation Agent, Get Started HK Limited

“Startups should choose SaaS models because they provide cost efficiency, rapid deployment, and scalability without the need for significant upfront capital or in-house IT infrastructure. SaaS allows startups to access advanced technology on a subscription basis, enabling them to focus on growth while benefiting from seamless updates and flexibility as their needs evolve.”

Tymen van Dyl, CEO and Founder, RoomRaccoon

“As a startup, it is critical to have a business model that generates cash as quickly as possible to avoid burning through your thin reserves. A SaaS model not only allows you to scale rapidly but also ensures recurring revenue, creating a more predictable and stable foundation for long-term growth.

“At RoomRaccoon, incentivising our clients to opt for an annual subscription was critical to ensure that we had substantial cash flow from the get-go.”