How to Build a Scalable SaaS on a Budget

Introduction: You Do Not Need VC Money to Build a SaaS

The SaaS industry generates over $300 billion in annual revenue. Yet the majority of successful SaaS products were not built by well-funded startups in Silicon Valley. They were built by individuals and small teams who understood that the biggest constraint in early-stage SaaS is not money — it is attention. Every dollar spent on infrastructure you do not need is a dollar not spent on talking to customers, shipping features, or refining your product.

This guide is for developers who want to build a real, scalable SaaS product without burning through savings or raising capital. I will cover the technical architecture, the specific tools that keep costs low, the infrastructure decisions that scale gracefully, and the operational practices that prevent 3 AM incidents. Everything here is based on real experience building SaaS products that serve thousands of users on budgets under $100 per month.

1. The Tech Stack: Maximize Leverage, Minimize Cost

Frontend: Next.js (App Router)

Next.js is the optimal choice for SaaS frontends in 2026. The App Router provides server-side rendering out of the box, which matters for SEO, initial load performance, and the perceived quality of your application. Server Components reduce client-side JavaScript, React Server Actions eliminate the need for separate API endpoints for mutations, and Vercel's free tier hosts most early-stage SaaS frontends at zero cost.

The key is using Next.js correctly for SaaS: implement middleware for authentication, use route groups to organize authenticated vs public pages, and leverage server-side data fetching to keep your UI snappy without client-side loading spinners everywhere.

Backend: The Monolith That Scales

Do not start with microservices. I cannot emphasize this enough. A well-structured monolith in Node.js, Go, or Python will serve you from 0 to 100,000 users. Microservices add complexity (service discovery, distributed tracing, network latency, deployment orchestration) that actively slows you down when you have fewer than 10 engineers.

Your monolith should be modular — organized by feature domain (users, billing, notifications, core product) with clean interfaces between modules. When the time comes to extract a service (and it probably will not for years), the modular structure makes it straightforward.

Database: PostgreSQL (Always PostgreSQL)

PostgreSQL is the correct choice for 99% of SaaS applications. It handles relational data, JSON documents, full-text search, geospatial queries, and time-series data. It scales vertically to handle millions of rows efficiently. It is free, open source, and runs on every cloud provider.

Start with a managed database service. AWS RDS, DigitalOcean Managed Databases, Supabase, or Neon all offer PostgreSQL hosting starting at $15-25/month. The managed service handles backups, updates, and failover — operational tasks that would consume hours of your time every week.

Authentication: Do Not Build It Yourself

Authentication is the single worst thing to build from scratch. It seems simple until you deal with password hashing, session management, token rotation, OAuth flows, magic links, two-factor authentication, account recovery, rate limiting, and brute force protection. Use a service:

• Clerk — Best developer experience, generous free tier (10,000 MAU), drop-in React components. My top recommendation for SaaS.
• NextAuth.js (Auth.js) — Self-hosted, free, works well with Next.js. More control but more work.
• Supabase Auth — If you are already using Supabase for your database, this is the obvious choice.
• Firebase Auth — Google-backed, reliable, free for most use cases.

2. Multi-Tenant Architecture on a Budget

Multi-tenancy — serving multiple customers from a single deployment — is the defining architectural decision of a SaaS application. Get it right early, because retrofitting multi-tenancy is one of the most painful migrations in software engineering.

Shared Database, Shared Schema (Row-Level Isolation)

For budget-conscious SaaS, use a single database with a tenant_id column on every table. This is the simplest, cheapest, and most scalable approach for early-stage products.

-- Every table includes tenant_id
CREATE TABLE projects (
    id UUID PRIMARY KEY DEFAULT gen_random_uuid(),
    tenant_id UUID NOT NULL REFERENCES tenants(id),
    name VARCHAR(255) NOT NULL,
    created_at TIMESTAMP DEFAULT NOW()
);

-- Every query filters by tenant_id
CREATE INDEX idx_projects_tenant ON projects(tenant_id);

-- Row Level Security (PostgreSQL)
ALTER TABLE projects ENABLE ROW LEVEL SECURITY;
CREATE POLICY tenant_isolation ON projects
    USING (tenant_id = current_setting('app.current_tenant')::uuid);

PostgreSQL's Row Level Security (RLS) is a safety net — even if your application code forgets to filter by tenant_id, the database will enforce isolation. This defense-in-depth approach prevents the catastrophic scenario of one customer seeing another customer's data.

The Middleware Pattern

Every request should resolve the tenant before reaching business logic:

// middleware.ts
export function tenantMiddleware(req, res, next) {
    const tenantId = extractTenantId(req); // from subdomain, header, or JWT
    if (!tenantId) return res.status(401).json({ error: "Tenant not found" });
    
    req.tenantId = tenantId;
    // Set for RLS
    await db.query("SET app.current_tenant = $1", [tenantId]);
    next();
}

3. The $100/Month Infrastructure Stack

Here is a concrete infrastructure setup that costs under $100/month and scales to thousands of users:

Service	Provider	Cost
Frontend hosting	Vercel (free tier)	$0
Backend hosting	Railway / Render	$5-20
Database	Neon / Supabase	$0-25
Authentication	Clerk (free tier)	$0
Email	Resend	$0-20
File storage	Cloudflare R2	$0-5
Monitoring	Sentry (free tier)	$0
Analytics	Plausible / Umami	$9
Domain + DNS	Cloudflare	$10/year
Total		$15-80/month

The key insight: use free tiers aggressively for services that charge per-user (auth, email, analytics) and pay for services that charge per-resource (database, hosting). Free tiers are not charity — they are customer acquisition strategies. Use them until your revenue justifies upgrading.

4. Billing and Payments: The Revenue Engine

Stripe: The Only Serious Choice

For SaaS billing, Stripe is the answer. It handles subscription management, invoicing, proration, tax calculation, payment method management, dunning (failed payment recovery), and webhook notifications. Attempting to build any of this yourself is a waste of weeks that could be spent on your core product.

// Create a subscription
const subscription = await stripe.subscriptions.create({
    customer: customerId,
    items: [{ price: priceId }],
    payment_settings: {
        payment_method_types: ["card"],
        save_default_payment_method: "on_subscription",
    },
    expand: ["latest_invoice.payment_intent"],
});

Pricing Strategy for Technical Products

• Free tier — Essential for developer tools and B2B SaaS. Lets users experience value before committing.
• Usage-based pricing — Align cost with value delivered. Charge per API call, per seat, per storage GB, or per active project.
• Annual discount — Offer 15-20% off for annual commitments. This improves cash flow and reduces churn.
• Three tiers maximum — Free, Pro, and Enterprise. More tiers create decision paralysis. Keep pricing simple enough to explain in one sentence.

5. Feature Flags and Gradual Rollout

Feature flags are essential SaaS infrastructure. They let you ship code to production without exposing it to all users, run A/B tests, enable features per-tenant, and quickly disable problematic features without redeployment.

// Simple feature flag implementation
const FEATURES = {
    newDashboard: {
        enabled: true,
        allowlist: ["tenant-123", "tenant-456"], // beta testers
        percentage: 0, // 0% of non-allowlisted tenants
    },
    exportPDF: {
        enabled: true,
        allowlist: [],
        percentage: 100, // everyone
    },
};

function isFeatureEnabled(feature, tenantId) {
    const flag = FEATURES[feature];
    if (!flag?.enabled) return false;
    if (flag.allowlist.includes(tenantId)) return true;
    // Deterministic percentage based on tenant ID
    const hash = hashCode(tenantId + feature);
    return (hash % 100) < flag.percentage;
}

Start with a simple implementation like this. Graduate to a managed service (LaunchDarkly, Statsig, Flagsmith) when you need audit logs, analytics, or team management around feature flags.

6. Database Scaling Without Expensive Migrations

Optimize Before You Scale

Before adding replicas, caches, or sharding, optimize what you have:

1. Indexes — Add indexes for every column used in WHERE and JOIN clauses. Use EXPLAIN ANALYZE to verify queries use indexes.
2. Connection pooling — Use PgBouncer or built-in pooling to prevent connection exhaustion. Set pool size to 2x your CPU cores.
3. Query optimization — Rewrite N+1 queries as JOINs. Use pagination instead of loading all rows. Avoid SELECT * — select only the columns you need.
4. Batch operations — Use bulk inserts and updates instead of individual queries in loops.

Caching Strategy

Add caching only for data that is read frequently and changes infrequently:

• In-memory cache — For single-server deployments, Node.js Map or LRU cache for configuration, feature flags, and user sessions.
• Redis — For multi-server deployments or when you need TTL, pub/sub, or data structures. Upstash offers serverless Redis with a generous free tier.
• Cache invalidation — The hardest problem in computer science after naming things. Use TTL-based expiration for most data. Use explicit invalidation (publish event on write) only for data where stale reads are unacceptable.

7. Operational Excellence on a Budget

Monitoring Stack

• Sentry (free tier) — Error tracking with source maps. Configure alerts for new errors and error rate spikes.
• UptimeRobot (free tier) — External uptime monitoring with SMS/Slack alerts. Check your health endpoint every 5 minutes.
• Vercel Analytics (included) — Web performance metrics if hosted on Vercel.
• Custom health endpoint — Return database connection status, queue depth, and memory usage. This is your canary.

Backup Strategy

• Managed database services include automated daily backups — verify this is enabled.
• Test restoration quarterly. A backup you cannot restore from is not a backup.
• For critical data, maintain a secondary backup to a different provider (export to S3 or R2).

Incident Response for Solo Developers

• Set up PagerDuty or Opsgenie free tier for critical alerts
• Maintain a runbook for common issues (database connection failure, high memory usage, payment webhook failure)
• Have a rollback strategy that takes less than 5 minutes to execute
• Communicate with users through a status page (Instatus offers a free tier)

8. When to Start Spending More

Scale your infrastructure spending with your revenue, not your ambitions:

• $0-1K MRR — Free tiers and minimal spending. Focus 100% on product-market fit.
• $1K-5K MRR — Upgrade database to a paid tier. Add Redis for caching. Invest in better monitoring.
• $5K-20K MRR — Consider dedicated hosting (VPS or containers). Hire for customer support. Invest in automated testing.
• $20K+ MRR — Now you can think about read replicas, CDN, dedicated security audits, and the infrastructure decisions that big companies make.

Conclusion: Constraints Breed Creativity

Building a SaaS on a budget is not a limitation — it is a discipline. Every dollar you do not spend on unnecessary infrastructure is a dollar that compounds through customer acquisition, product development, or your own financial runway. The most successful bootstrapped SaaS products were not built by developers who had unlimited resources. They were built by developers who understood exactly which resources mattered and which were waste.

Start simple. Use managed services. Optimize before you scale. And focus relentlessly on the one thing that actually determines whether your SaaS succeeds: building something that people want to pay for. The infrastructure can always be upgraded later. The opportunity to find product-market fit cannot.