The invisible bottleneck that slows down startups
India is now a global startup powerhouse, with its startup ecosystem ranking third in the world with over 100 unicorns. Over 200,000 government-registered startups are operating across the country, creating more than 2.1 million jobs.
Given the intense competition and the market pressure prevailing in this environment, Indian startups leverage software-as-a-service (SaaS) solutions—their affordability, flexibility, and diverse functionalities help them streamline operations better and scale faster. No surprises, then, that India is one of the world's fastest-growing SaaS markets, as the domestic software market is poised to hit $100B by 2035.
While India’s startup ecosystem is visibly entrenched in SaaS, an invisible problem persists: Many founders underinvest in creating a coherent architectural blueprint that dictates how their various solutions work together and how data flows between systems. This high-level design, or software architecture, can make or break a startup's scalability, reliability, and agility.
So how can startups and small and medium enterprises think about software architecture that scales with them from day one? We'll find the answers in this edition of The Long Game Dialogues, featuring:
Kuppulakshmi Krishnamoorthy, Global Head, Zoho for Startups
Vineet Mehta, Co-Founder and CTO, Alyve Health
Diagnosing the founder's myopia
Startup founders—bootstrapped or venture-funded—are under immense pressure. In their quest to achieve product-market fit in a crowded marketplace at the earliest, and ensure profitability all while working with a lean team, they end up focusing on what's required here and now, as opposed to what could be good for the business in the long run.
As a result, founders pick SaaS tools that get the work done and don't disrupt daily operations while remaining affordable. Teams keep adding new tools for each function, like CRM, customer support, billing, marketing automation, and so on. Naturally, software architecture goes out of sight, out of mind, as long as the wheels keep humming.
Until, one day, the wheels are at risk of grinding to a halt as the startup grows. Given how fragmented the tech stack has become, day-to-day work becomes harder for every team. Sales can't get a reliable view of accounts. Customer support has to jump between multiple tools to understand what's happening with a user. And engineers are perennially in firefighting mode, because it's hard to troubleshoot amidst dozens of moving parts.
This is the consequence of the founder's myopia: focusing only on the short-term fixes for the startup's survival instead of prioritizing long-term structural decisions that ensure the sustainability and scalability of the business.
According to Kuppulakshmi, the remedy for this diagnosis lies in founders factoring in SaaS architecture right from the initial days instead of relegating it to the background. "It's going to come back and affect your business—the very reason why you exist," she says.
Now, it's a no-brainer to think about SaaS right from day one, when your idea is born. You have to have a strategy for what technology you're going to use.
— Kuppulakshmi Krishnamoorthy, Global Head, Zoho for Startups
Why SaaS architecture matters so much for startups
As teams race to ship features and close deals, they assemble a stack of SaaS tools where each one solves a real problem. But when put together, they create a new one: a patchwork of siloed systems. The applications promise end-to-end automation, but in reality, teams end up with hours of manual, time-consuming work to bridge the gaps between systems.
A unified SaaS architecture offers an alternative: a suite of applications built on a shared foundation. The applications might appear separate on the surface, but they share:
One underlying data model
One integration layer
Common security, compliance, and audit controls
With a unified architecture, all systems are designed to work together right off the bat—many apps, but one brain. So how does this look in practice?
A single source of truth for all: A unified architecture aligns the entire organization around a single set of facts without ambiguity, enabling stakeholders to make strategic decisions based on one reliable, shared reality.
Baked-in security and compliance: Every action, every data access, and every data modification is logged centrally. This helps teams maintain a cohesive audit trail, making incident response faster and ensuring compliance with security standards.
Enhanced visibility across the board: Because all apps share the same underlying data model, analytics can join CRM, billing, and support data natively, using the same keys and definitions. This lets you spot problems before they snowball into incidents.
For early-stage startups operating with lean teams, this can be the difference between a stack that quietly slows them down as they grow and one that makes it easier to move faster the bigger they get.
The startup world is hyper-competitive, given how AI tools and low-code platforms empower founders to go from an abstract business idea to a tangible product faster than ever. Since speed of execution is what separates market leaders from market followers, a robust SaaS architecture can be the catalyst that startups need to maintain their competitive edge.
With SaaS, we need not reinvent the wheel all the time. We can just go ahead with the very specialized solutions in those areas.
— Vineet Mehta, Co-Founder and CTO, Alyve Health
Choosing the right partner to bolster architecture
So how do startups actually put this into practice when choosing the right SaaS vendors to partner with and build a robust architecture? When resources are tight and options are plenty, founders need clear parameters to evaluate platforms that aren't the shiniest or the least expensive but grow with their business.
So here are five parameters that Kuppulakshmi and Vineet suggest for startup founders to find the right vendor for implementing a SaaS architecture:
Compliance, security, and data governance: To mitigate legal, financial, and operational risks down the line, founders must proactively assess vendor compliance from the start. Key evaluations include the vendor's regulatory readiness for target geographies (like GDPR and DPDP), as well as robust policies for data retention and secure purging.
Vendor trustworthiness and credibility: Founders must vet the vendor's credibility and reputation in the market to ensure the partnership will be stable and doesn't result in operational risks. Analyzing feedback within user communities and reviewing third-party analyst reports are some ways to verify vendor credibility.
Cost structure and pricing transparency: Startups must prioritize flexible subscription models that don't lock them in to prohibitive upfront costs or surprise fees. Pricing should follow a "what you see is what you get" approach, with clear, simple language instead of jargon that hides future challenges or vendor lock-in.
Vendor roadmap and long-term innovation: Startups need partners who proactively integrate emerging technologies like AI, ensuring the platform remains a viable long-term asset. Founders should examine the vendor’s future roadmap, including their R&D initiatives and their track record of innovation.
Support ecosystem and community strength: A strong support ecosystem is crucial for minimizing downtime. Startups should prioritize platforms with an active user community that aids in peer-to-peer troubleshooting. Equally vital is strong vendor support with transparent service level agreements, low turnaround times, and clear escalation paths when critical issues emerge.
Watch the full conversation here: SaaS architecture: Building for sustained success
