Scaling a SaaS business is exciting, but it’s also risky if you’re not keeping an eye on your costs.
Revenue might be growing, but what about your burn rate? What if your biggest expenses aren’t even showing up clearly on your radar?
In this post, we’ll break down five cost categories that often sneak up on SaaS founders. For each one, we’ll share a smart habit to adopt, a pitfall to avoid, a stat to support the point, and real-world examples you can learn from.
Let’s begin.
1. Infrastructure and Hosting
Why This Cost Matters
Every new user you gain puts more strain on your servers. That means higher cloud bills. If you’re using AWS, GCP, or Azure, you’ve probably noticed that things scale quickly—and not always in a predictable way.
What to Do (and Avoid)
Set up auto-scaling early so you’re not paying for unused resources during low-traffic hours. Look into reserved instances once you have predictable usage patterns. These can reduce long-term costs significantly.
One of the most common mistakes is leaving cloud resources running that you no longer use. Default setups often include over-provisioned instances or idle services. Many startups don’t review this until the bills start hurting.
Supporting Stat
Companies waste $26.6 billion per year on idle or unused cloud resources.
Source: ParkMyCloud, 2022
Stories to Learn From
- – Dropbox moved away from AWS to their own infrastructure to manage costs and gain more control.
- – Basecamp kept their tech stack lean and simple, avoiding cloud bloat in their early years.
2. Customer Acquisition Cost (CAC)
Why This Cost Matters
Getting new users is essential, but it can get expensive fast. The true cost includes ad spend, sales team salaries, and even the time you spend closing deals.
What to Do (and Avoid)
Track CAC by channel every single month. If you’re spending more than one-third of a customer’s lifetime value to acquire them, the math doesn’t work. Redirect your budget toward high-performing, low-CAC channels.
The mistake many startups make is pouring money into acquisition before the product is sticky. You get signups, but if users leave after a week, your CAC goes through the roof. Paid ads only make sense if retention is strong.
Supporting Stat
Only 1 in 4 SaaS companies recover CAC within 12 months.
Source: KeyBanc SaaS Survey, 2023
Stories to Learn From
- – HubSpot invested early in content marketing. It took time but eventually reduced their CAC dramatically.
- – Superhuman delayed large-scale acquisition until they had built a product users loved and used daily.
3. Customer Support and Success
Why This Cost Matters
More users mean more support tickets, onboarding questions, and retention risks. If you’re not prepared, your team will drown in support requests.
What to Do (and Avoid)
Build self-service options early. This includes help docs, tutorial videos, and onboarding checklists. Automate what you can. This keeps support costs under control as you scale.
A big mistake is ignoring support until it becomes a problem. Many founders focus entirely on sales and product. But poor support leads to churn, refunds, and bad word of mouth. Fixing a bad reputation is expensive.
Supporting Stat
Companies that invest in customer success see 24% higher Net Revenue Retention.
Source: Gainsight, 2021
Stories to Learn From
- – Zapier scaled with a small team by investing in documentation and automation instead of growing headcount.
- – Intercom added proactive messaging and smart support flows that reduced incoming tickets while keeping users happy.
4. Product Development and R&D
Why This Cost Matters
R&D is a core investment for any SaaS product. But it’s also one of the easiest places to waste money—especially when building features no one uses.
What to Do (and Avoid)
Plan to spend 30 to 40 percent of revenue on R&D in the early stages. But don’t jump straight into development. Validate ideas through surveys, prototypes, and interviews first. This ensures you build what customers actually need.
The mistake? Overbuilding. Founders often create features based on internal ideas or competitor comparisons without real user feedback. These features go unused and become dead weight.
Supporting Stat
The average SaaS company spends 23% of revenue on R&D.
Source: Bessemer Cloud Index, 2023
Stories to Learn From
- – Atlassian built a culture of thoughtful, user-informed product decisions that allowed them to scale without waste.
- – Buffer published their product decisions and financials openly, helping build trust and avoid wasteful feature creep.
5. Team and Payroll
Why This Cost Matters
Your people are your largest recurring cost. Salaries, benefits, and equity add up quickly—and they don’t go away if revenue dips.
What to Do (and Avoid)
Hire generalists early on. They bring flexibility and reduce the need for large teams. Align hiring with business goals, not just available funding. Design compensation structures that scale with outcomes, not headcount.
One of the biggest mistakes is post-fundraise hiring sprees. Startups often hire because they can, not because they should. This leads to high burn, bloated orgs, and eventually layoffs when revenue doesn’t catch up.
Supporting Stat
Payroll accounts for over 70% of operational costs in early-stage SaaS businesses.
Source: SaaStr, 2022
Stories to Learn From
- – Notion stayed lean for years, growing their user base massively with a small, focused team.
- – Segment went through layoffs and a full reset after expanding too quickly. They eventually recovered, but not without pain.
Final Thoughts
Scaling a SaaS product is about more than growth. It’s about sustainable growth.
If you want to build something that lasts, you need to track your costs as closely as you track your MRR.
Here’s what to do next:
- – Review your current expenses in all five categories
- – Identify any blind spots or red flags
- – Set cost benchmarks that match your stage and goals
- – Track progress monthly, not just quarterly
Getting these five cost areas under control won’t just save money. It will extend your runway, improve your margins, and give you breathing room to build with confidence.
