What’s the real cost of overlooking authentication in a SaaS startup?
Lost deals, overworked engineers, and growing technical debt—these are just the beginning.
In 7 out of 10 enterprise deals, authentication requirements like SSO or SCIM are deal-breakers.
From my conversations with 70+ SaaS founders, one clear pattern emerged: authentication is often deprioritized until it becomes a deal breaker. The result? Delayed enterprise deals and overloaded engineering teams.
When done right, authentication is a strategic enabler of growth—accelerating enterprise deal cycles and building customer trust.
This blog distills those conversations into actionable insights—common pitfalls to avoid and strategies to help SaaS startups navigate their auth journey effectively.
Insights from 70+ SaaS Founders on Authentication
Here are grouped insights and anonymized quotes. Each group reflects common themes or challenges SaaS startups face in their authentication journey:
1. Growing Pains: Moving Upmarket Brings New Challenges
Many early-stage startups focus on building their core product and postpone investing in robust authentication until enterprise requirements arise. As startups begin moving upmarket, they encounter new demands for authentication that their current solutions cannot handle.
Insights:
- In the initial days, SaaS teams often stick to email-password authentication or basic social login (e.g., Google, Facebook).
- SSO (e.g., Okta, Entra) becomes a frequent customer request with mid-market and enterprise customers
- Startups often struggle to build robust user management systems, including invite flows and RBAC.
Founders say…
- “We’re using AWS Cognito right now, but enterprise customers are asking for SCIM and SSO—we’re not ready.”
- "We used Firebase for auth because it was straightforward and affordable when we were starting. But now, with enterprise customers asking for features like multi-tenancy and RBAC, Firebase just doesn’t cut it anymore."
2. Build vs. Buy: The Dilemma
Many startups debate whether to build authentication in-house or adopt third-party solutions. The decision is often influenced by costs, technical complexity, and the scale of enterprise demands.
Insights:
- Founders who build in-house often underestimate the long-term maintenance and security requirements.
Founders say…
- “We spent three months building SSO ourselves, and it still breaks with every new customer.”
- “We built most of our auth in-house but don’t have invite flows or advanced RBAC figured out yet.”
3. The Hidden Cost of Authentication
Startups underestimate the long-term costs of authentication, from maintenance to migration and opportunity costs.
Insights:
- Building in-house often results in unexpected costs for security updates, compliance, and ongoing support.
- Migrating to a new system later is 2–3x more expensive than initial implementation.
Founders say…
- “We thought building auth in-house would save money, but the migration costs are now double what we spent initially. Also, maintaining our homegrown solution eats up 30% of our engineering team’s time.”
4. Frustrations with Incumbent Auth Solutions
Even well-established authentication platforms like Auth0 or WorkOS have limitations, and founders often experience issues with cost, support, or feature gaps.
Insights:
- Pricing for enterprise use cases can be prohibitive. Those who adopt third-party solutions like Auth0 or WorkOS frequently cite high costs or gaps in features tailored to B2B needs
- Migration from initial authentication systems (e.g., Firebase, Cognito) to enterprise-grade solutions is expensive and time-consuming.
- Support and reliability concerns of some of the auth solutions push some startups to consider alternative solutions.
Founders say…
- “Auth0 works, but their pricing model is prohibitively expensive for our needs”
5. Key Recommendations
If I had to sum up 70+ conversations into a single slide of top takeaways, this is how it would look like. B2B SaaS companies acquiring enterprise customers need a quick and ready-to-launch SSO solution with auth workflows that support B2B scenarios.
As much as building with solutions like AWS Cognito and Firebase may seem lucrative, a detailed breakdown of a workable auth solution for your customers would be away from reality.
Authentication isn't just a technical decision—it's a strategic choice that directly impacts your startup’s ability to scale, enter enterprise markets, and maintain engineering velocity.
This article is based on conversations with over 70 B2B SaaS founders and technology leaders at SaaStr Annual 2024. All statistics and insights reflect real-world experiences shared by founders who've built successful SaaS businesses.
