Overview
SaaS (Software as a Service) development involves building cloud-hosted software sold as subscriptions. This includes multi-tenant architecture, billing integration, user management, authentication, and continuous deployment. Companies like Slack, Notion, and Figma built successful SaaS products with relatively small engineering teams by prioritizing shipping and iteration.
SaaS products have specific technical requirements: tenant isolation, subscription management with tools like Stripe, usage tracking for metered billing, and reliable infrastructure with high uptime expectations. The business model influences technical decisions—how you price affects what you build and measure.
For hiring, SaaS development is web development with domain-specific knowledge. Look for full-stack engineers who understand the SaaS model, have shipped production products, and can work across the stack. Experience with authentication, payments, and multi-tenancy is valuable but learnable.
What Makes SaaS Development Different
SaaS development is web development with specific patterns and requirements. Understanding these helps you hire the right engineers.
Real-World SaaS Success Stories
Slack was built by a small team of generalists before scaling. They prioritized shipping and iteration over perfect architecture.
Notion stayed small for years, keeping a generalist team that could move fast. They added specialists only after achieving product-market fit.
Linear built their product with a tiny team focused on quality and user experience. Their SaaS success came from engineering excellence, not team size.
Key insight: Successful SaaS companies start with generalists and ship fast. They add specialists as complexity demands it.
Core SaaS Technical Components
Multi-Tenancy
Isolating customer data while sharing infrastructure:
| Approach | Description | When to Use |
|---|---|---|
| Shared Database | All tenants in one DB, tenant_id column | Early stage, simple data |
| Separate Schemas | Tenant-specific schemas | Medium isolation needs |
| Separate Databases | Full isolation | Compliance, enterprise |
Recommendation: Start with shared database. Add isolation as needed. Most SaaS products never need separate databases.
Authentication and Authorization
User and organization management:
- User accounts: Registration, login, password reset
- Organizations/teams: Multi-user accounts
- Roles and permissions: Admin, member, viewer
- SSO/SAML: Enterprise requirements
Build vs Buy: Auth0, Clerk, and similar services handle auth well. Building custom auth is complex and risky. Buy unless you have specific requirements.
Billing Integration
Subscription and payment management:
- Subscription plans: Monthly/annual, tiers
- Usage-based billing: Metered pricing
- Payment processing: Credit cards, invoicing
- Dunning: Failed payment handling
Recommendation: Use Stripe. Billing is complex; Stripe handles edge cases you won't think of. Custom billing is almost never worth it.
Team Composition for SaaS
Early Stage (1-3 Engineers)
Hire full-stack generalists:
- Can work across frontend and backend
- Ship features end-to-end
- Minimal coordination overhead
- Wear multiple hats as needed
Don't specialize yet:
- You need flexibility over depth
- Product will change based on feedback
- Specialists create bottlenecks early
Growth Stage (4-10 Engineers)
Add specialization gradually:
- Frontend engineers for complex UI
- Backend engineers for API/data complexity
- DevOps/infrastructure support
Role distribution:
- 2-3 frontend
- 2-3 backend
- 1-2 fullstack
- DevOps (part-time or shared)
Scale Stage (10+ Engineers)
Specialized teams:
- Feature teams
- Platform/infrastructure team
- Dedicated functions (security, performance)
Skills Assessment for SaaS Engineers
Essential Skills
Full-Stack Development:
- Frontend and backend proficiency
- Can ship features independently
- Understands system design
Database Design:
- Multi-tenant modeling
- Query optimization
- Data integrity
Shipped Products:
- Production experience
- Understands deployment and operations
- Has seen the full development cycle
SaaS Domain Knowledge
Nice to have but learnable:
- Subscription billing patterns
- Multi-tenancy architecture
- SaaS metrics (MRR, churn, LTV)
- Usage tracking and analytics
Common SaaS Hiring Mistakes
Mistake 1: Over-Engineering Multi-Tenancy
Why it's wrong: Separate databases per tenant sounds safe but adds massive complexity. Most SaaS products don't need it.
Better approach: Start with shared database, tenant_id column, row-level security. Add isolation when you have actual requirements (compliance, enterprise).
Mistake 2: Building Custom Billing
Why it's wrong: Billing has endless edge cases: prorations, upgrades, failed payments, refunds. Building custom billing is a months-long project.
Better approach: Use Stripe or similar. Even large SaaS companies use Stripe. Focus on your product, not billing infrastructure.
Mistake 3: Hiring Specialists Too Early
Why it's wrong: Frontend-only and backend-only engineers create handoff friction. Early teams need flexibility.
Better approach: Hire full-stack engineers for the first 4-6 hires. Add specialists when you have clear bottlenecks.
Interview Approach for SaaS Engineers
Technical Assessment
Multi-Tenancy Design:
"How would you design a database schema for a multi-tenant application?"
Good answers: understands isolation options, considers tradeoffs, mentions row-level security
Full-Stack Capability:
"Walk me through building a feature from UI to database."
Good answers: comfortable across the stack, understands data flow, considers edge cases
Product Thinking
SaaS Understanding:
"How would you implement a trial-to-paid conversion flow?"
Good answers: thinks about user experience, considers billing integration, mentions tracking