Scaling bottlenecks choke SaaS growth. Bottlenecks can prevent you from onboarding customers fast enough, make supporting your largest customers impossible, and even leave you saying no to giant deals. Scaling issues impact your annual recurring revenue (ARR), net dollar retention (NDR), and customer lifetime value (CLTV). Imagine telling paying customers that they’ve grown too big and need to move to another platform! It is not only extremely frustrating, it weighs down all of your major metrics.
The rate at which you can onboard new customers is knowable. So is the maximum customer size that has delightful experiences. Customers don’t get too big overnight, they grow with you for years. You can write tools to discover the system maximums. Knowing the limits won’t prevent you from hitting them, but it will prevent you from being surprised.
Scaling bottlenecks are a form of tech debt; bottlenecks are the result of your past decisions, regardless of whether those decisions were intentional. Accidentally creeping up on the system’s limits requires not knowing where they are in the first place.
Do you know where the limits are? Was it not worth investigating because it wasn’t maxed out?
If you don’t know, you will end up turning away customers and limiting ARR growth. Capping customer size also caps CLTV. Saying goodbye to long term customers tanks your NDR and hurts your ARR.
All systems have bottlenecks. The only question is: How do you want to find them? You can seek them out, or you can find them in your bottom line.
