Systems of scale

When we first started Kinde, I was amazed how long it took to do relatively simple things. Setting up business bank accounts, ESOP, employee contracts. Each of these small tasks needed somebody to take a few hours, days or even weeks, to do. Every one of them was essential to the running of the business but at the same time didn’t particularly push us towards our goals.

Today we don’t ever think about those things. They’re just part of the business. We don’t think about our HR systems or our recruiting systems. They just are. These are the systems of scale that we have built that mean we don’t have to think about them anymore. They are just there to power us doing bigger, newer and harder things. We’re standing on the shoulders of a Kinde that came before – in a way.

Systems of scale are everywhere around us. The water system in every one of our homes is a great example of a system of scale. Without clean water we could not have the society we have. Waste would flow down streets and rivers, making general life unbearable. Sickness and plague would spread easily. Things like surgery would be a high risk pursuit. Everything about our modern lives is made immeasurably better, thanks to the water system. Yet very few of us even give it a moments thought on a daily basis. This is the ultimate system of scale.

As you build a company, one of the most important things you can do is to seek out systems of scale. Finding the things that you or your team do often and trying to systemize them so that you don’t have to think about them in future. A kind of shortcut for the future. This may mean building a team to perform a function that currently sits between teams. It may mean codifying your values or processes so that you and your team share a shorthand for what is expected. Or it may mean introducing software or systems that can do the work for you.

How do you know when to introduce a system of scale? Fortunately they are typically easy to spot. You’re looking for two signs:

1. There is true pain. Either your team or your customers are unhappy. Things like the team getting pulled in multiple directions, or productivity reducing, or you’re letting down customers.
2. It happens repetitively. Doing the same thing over, and over, again is a good sign that a system of scale is needed. This is why systems of scale are typically retroactively applied.

If you see these two signs, this is where a system can help.

Kinde itself is a system of scale. It allows engineering teams to shortcut all the tedious work of learning and building systems like auth, feature flagging, and billing. It brings all of the data associated with these individual systems into a single system of record. And it powers your engineering team to never have to think about basic infrastructure and business operations. That’s a pretty big deal. Your team could either spend time learning how SAML works, or just offload all of that effort to a system of scale.

But be careful. Typically a good system of scale is a response to a need within the business. Something that happens often and is using up unnecessary human time or causing other things to slow down. They can also be an unnecessary distraction if introduced at the wrong time. Bringing in a full-suite recruitment tool when you’re early and not yet hiring on the assumption that the team will grow in future, is a good example of a system of scale employed at the wrong time. It may feel like you’re building for the future, but actually you’re just introducing complexity where it is not needed, and spending time and money on a future problem. Be very cautious of introducing a protection before it is actually needed. Systems of scale should only be introduced as a response to a problem.

The classic example of this is the tendency for product teams to rebuild their products when it feels like they are being hampered by technical debt. You see this all the time. Often it is hidden in the disguise of moving from monolith to microservice, or back. What the team doesn’t realize is, that by trying to introduce a system of scale (ie a new architecture), they are actually killing all of their systems of scale. Every one of those patches, kludges and band-aids sitting in your codebase that appear to be slowing you down, are not actually debt, they are your product. Every one of them is a response to a bug, or some custom code to do something very specific. Rebuilding is actually throwing away years of product evolution. Be very cautious here. Don’t throw out your most valuable system of scale because it feels too hard to get in and fix it.

Product infrastructure systems are one of the most powerful systems of scale. They accelerate your ability to build – so introduce them early rather than trying to build your own. Design systems are a good example. Design systems when introduced at the beginning of building a product are relatively easy to introduce and will massively accelerate product development. They are the best system of scale you can ever give your front-end team. Design systems introduced later into an established system are a nightmare and take months, sometimes even years, to properly integrate. Still worth doing, but a lot more effort.

The original Atlassian Design System was a multi-year initiative to implement across the entire Atlassian product base. It was hugely transformative and massively empowering for our team, and undeniably worth the effort in the long run. But a total nightmare to implement in the short term.

At Kinde we introduced our own design system day 1. It accelerates everything that we build and makes our Design team’s lives massively better.

SaaS companies are the ultimate system of scale beast.

The unit economics of SaaS businesses are insane. What other product in the world can you build once and sell infinitely? This is why the venture capital industry rose up around technology businesses. Because no other business in the world has the opportunity to scale as large as tech companies with such low distribution costs. Build your product once and you can scale that system as far as there is market.

Add to this the PLG marketing mechanics possible only in SaaS that are almost all systems of scale. We often talk about compounding marketing methods: brand, content, community and social. Each one of these is a system of scale. You build them once and they continue to provide value for years to come. Yes, you need to first start the flywheel through mechanisms like paid and a lot of founder outreach, but once the flywheel is turning it becomes an almost unstoppable machine. Kinde is no different.

And once you have customers, then the customer system of scale actually helps you acquire more. Word of mouth from happy customers is the single best form of advertising anywhere.