The 10x Rule: A Pragmatic Approach to Scaling a SaaS Product
This blog post is filled with my opinions and experiences about the scaling journey of a SaaS product, featuring a rule of thumb that I simply call the 10x Rule. Remember, every SaaS venture is unique, and this isn’t a strict law but rather food for thought.
Focus on taking the next step in your scale-up journey
The core of my argument is this: If you invest your engineering effort in the immediate future, your effort will yield larger dividends compared to investing in activities that are beyond the horizon.
You might be convinced that you’re building the next Instagram or Airbnb with billions of users, so you feel compelled to immediately architect your SaaS platform for this kind of scale. However, in most cases, this turns out to be a low-yield investment. Instead, invest your limited engineering resources in what’s essential for your company right now, which for most startups is acquiring 10x more customers.
The 10x Rule
Let me introduce a simple rule of thumb, the 10x Rule. It’s a pragmatic approach, proposing that your scale-up efforts should aim at supporting ten times your current Monthly Active Users (MAU) or a similar meaningful metric for your SaaS. So, if your platform has 50,000 users right now, then the upper boundary for your scaling efforts should be to accommodate 500,000 users. Aiming for more than that will dilute your focus and intensity, which are essential for growing a SaaS business.
The 10x Rule in practice
The implementation of the 10x Rule can take various shapes. Based on a dispassionate analysis of your actual traffic and server load, you might simply conclude that increasing the size of your current server instances will be sufficient to support 10x more users. If so, leave it at that, and invest your engineering resources in helping to attract all those new users to your platform.
Instead of pouring your extremely limited engineering resources into migrating to microservices, optimize your current operations to get the most out of your resources. The goal is to support 10x your current user base, not to future-proof for an unknown user count. In any event, after you’ve scaled beyond 10x your current user base, your funding situation, product knowledge, and engineering team will be considerably different, opening new opportunities for better ways of scaling further.
Benefits of the 10x Rule
The beauty of the 10x Rule lies in its simplicity and focus. You’re always aiming for a tangible target, and that clarity lets you focus your resources efficiently. You avoid the perils of overengineering and are free to channel your resources into enhancing your product and enriching the customer experience to attract more users to your growing platform.
Anti-Pattern: Taking a waterfall approach to scaling
Consider the example of a failed SaaS startup that aimed for a million users right from the get-go. They invested heavily in top-tier infrastructure and hired a massive platform team. Yet, their user base only hit 100,000 in the first year. They grappled with their oversized operations and, finally, downsized, acknowledging that their approach was draining their resources.
But won’t the 10x Rule limit our growth?
There’s a misconception that the 10x Rule caps growth. But that couldn’t be further from the truth. It’s about realizing your potential in a practical and sensible way, not restricting it. I see the 10x Rule as naturally fitting with the dream big, start small, iterate fast startup ethos.
But if I’m a startup with 0 customers, then I shouldn’t invest nothing in scaling my platform? Yes! Then you should focus your full effort on actually getting customers onboard before thinking of scaling up the platform.
In summary
Scaling a SaaS product can feel like walking a tightrope. With the 10x Rule, however, you have a pragmatic and cost-effective approach to balance growth and resources. The next time you’re contemplating your scaling journey, consider the 10x Rule. Are you laying the groundwork for a tangible future, or are you daydreaming about castles in the clouds?
So, what do you think about the 10x Rule? I’d love to hear about your experiences with scaling a SaaS product. Share your stories — let’s learn and grow together! 🚀
