Building a SaaS

Overview

Building a SaaS company is not the same as building a SaaS product. The product is one component of a system that includes pricing, distribution, support, compliance, and operations. This skill covers the complete build: from architecture decisions at $0 to scaling infrastructure at $10M ARR.

When to Use

• "How do I build a SaaS company?"
• "What tech stack should I use?"
• "Start a SaaS from scratch"
• "Scale our SaaS infrastructure"
• "What should I build first?"
• "SaaS architecture decisions"
• "Build vs buy for SaaS tools"

Authoritative Foundations

• David Skok (Matrix Partners) — SaaS metrics and unit economics. LTV:CAC ratios by stage, CAC payback benchmarks, Magic Number.
• SaaStr (Jason Lemkin) — ARR stages and hiring triggers. Founder must personally close 10-20 deals before first sales hire.
• Winning by Design GTM Index — 1-10 scoring across 6 models to assess revenue system maturity.

Step-by-Step Process

Phase 1: $0-10K MRR — Validation

Product:

• Ship the smallest thing that solves one real problem
• No microservices. Monolith or simple backend + frontend
• Host on one provider (Vercel + Supabase, or Railway, or Fly.io)
• Don't build auth, billing, or infrastructure yourself — use Stripe, Clerk, etc.
• Time to first user: days, not months

Pricing:

• Start with one plan. Add tiers when customers ask for them
• Price based on value, not cost. If they save $1,000/mo, $100/mo is cheap
• Annual billing discount: 20-30%. Improves cash flow immediately

GTM:

• Founder does all selling. No exceptions
• Talk to 20-50 potential customers before writing code
• First 10 customers: personal outreach, not ads

Phase 2: $10-100K MRR — Repeatability

Product:

• The product works. Now make it reliable
• Add monitoring (Sentry, Axiom, or equivalent)
• Add backups and disaster recovery
• Start thinking about SOC2 if enterprise customers ask

Pricing:

• 2-3 tiers: Starter, Pro, Enterprise
• Usage-based components for high-volume customers
• Raise prices on new customers. Grandfather existing ones

GTM:

• Founder still leads sales. Document the playbook
• First marketing hire if founder can't produce content
• No SDR yet. Founder or AE prospects and closes

Phase 3: $100K-2M ARR — Growth

Product:

• Dedicated infrastructure: separate staging/production
• CI/CD pipeline that deploys in minutes, not hours
• API for integrations. Partners will ask for it
• SOC2 Type II if enterprise is 20%+ of revenue

Team:

• 2-3 engineers. One can be a contractor initially
• First AE hired (founder closed 10-20 deals personally first)
• Part-time CFO or finance person for metrics and compliance
• Customer success hire when churn exceeds 3%

GTM:

• Documented sales playbook. Second AE can follow it
• Content marketing producing 2-4 pieces/month
• Paid acquisition: test small budgets ($500-1,000/mo)

Phase 4: $2-10M ARR — Scale

Product:

• SOC2 Type II complete (or equivalent compliance framework)
• 99.9% uptime SLA. Incident response process documented
• Enterprise features: SSO, RBAC, audit logs, data export

Team:

• 5-10 engineers across product areas
• VP Sales or Head of Sales (only after 2 AEs at quota)
• Dedicated finance/ops person
• Customer success team (1 CSM per $500K-1M ARR)

GTM:

• Multiple channels running: outbound, inbound, partnerships
• Events and conferences for enterprise pipeline
• Partnership program for integration and reseller channels

Output Format

SaaS building roadmap with stage-specific: product decisions, pricing model, team hiring sequence, GTM channels, infrastructure requirements, and compliance milestones.

Quality Check

Before delivering, verify:

• All required sections are complete
• Output matches the user's stated need
• Named frameworks are cited for key recommendations
• No vague claims — every recommendation has a specific action
• Deliverable is ready for operational use, not just conceptual

Common Pitfalls

1. Overbuilding before validation. Spending 6 months on architecture before talking to a single customer. Ship in days, iterate based on usage.

2. Free tier without conversion path. Freemium with 5% conversion means 95% of users cost money forever. Design the upgrade trigger before launching the free tier.

3. Hiring VP Sales before $2M ARR. 70% failure rate. Founder-led sales until the playbook is proven and repeatable.

4. Enterprise features too early. SSO, audit logs, and SOC2 matter when enterprise is 20%+ of pipeline. Before that, they're distraction.

5. No unit economics tracking. CAC, LTV, churn, payback period. If you can't answer these in 30 seconds, you're flying blind.

Execution Artifacts

• references/framework-notes.md — Named frameworks and reference tables
• templates/output-template.md — Deliverable shell for agent output
• scripts/check-output.py — Lightweight deliverable validator

Related Skills

• solo-founder-gtm: Lean GTM for early-stage SaaS
• saas-metrics-calculator: Unit economics and benchmarks
• sales-team-building: Hiring sequence by ARR
• soc2-compliance: Security compliance for SaaS