Authentication strategies for scaling B2B products

According to recent surveys, nearly 68% of B2B SaaS startups adopt JWT (JSON Web Tokens) as their default authentication mechanism without considering alternatives. While JWT offers simplicity and statelessness that make it attractive for early development, this decision can create significant technical debt when your product begins to scale.

The authentication system you build today will determine your product's scaling limits tomorrow.

Many founders discover too late that their initial authentication choices create bottlenecks for multi-tenancy, enterprise features, and compliance requirements. This newsletter explores authentication approaches beyond JWT that can better position your B2B product for growth.

For non-technical founders: Authentication basics that impact business

Why authentication matters to your bottom line

Authentication isn't just a technical concern - it directly impacts:

• Customer experience: Complex authentication creates friction in user onboarding
• Enterprise sales: Large clients often require specific authentication capabilities
• Compliance readiness: SOC2, ISO27001, and GDPR all have authentication implications
• Product flexibility: The wrong authentication approach can limit feature development

Warning signs your authentication needs upgrading

Watch for these indicators that your authentication system needs attention:

1. Sales team reporting enterprise clients requesting SSO or SAML capabilities
2. Developers struggling to implement role-based permissions across customers
3. Difficulty implementing session timeout or forced logout for compliance
4. Scaling issues during peak usage periods

For technical teams: Authentication architectures beyond JWT

JWT limitations for scaling B2B applications

While JWT excels at simplicity, it presents challenges in several scenarios:

• Token revocation: With stateless tokens, immediate revocation is difficult
• Large payload problems: As permissions grow, tokens can become unwieldy
• Memory consumption: Storing extensive claims in each token increases overhead
• Cross-service validation: Comprehensive validation requires shared secrets

Alternative token approaches for specific scaling problems

I recommend reading Fly.io's excellent post about diferent API token strategies. It's a bit older, but still holds up in my opinion. Down below, I present some alternatives to JWTs. The blog post goes into much more detail with each alternative.

Macaroons: Delegatable tokens with attenuation

Macaroons allow you to add restrictions to tokens as they move through your system, perfect for multi-tenant architectures with delegated permissions.

Split tokens: Claims and reference architecture

By splitting tokens into a small reference token (sent to clients) and storing claims server-side, you maintain JWT simplicity while gaining revocation capabilities.

Migration strategies that preserve customer experience

1. Parallel systems approach: Run new and old authentication in parallel
2. Token translator pattern: Add middleware that converts between token formats
3. Progressive implementation: Roll out to segments of users incrementally

Future-proofing for multi-tenancy challenges

The most resilient authentication systems for B2B SaaS are designed with these principles:

1. Authentication/authorisation separation: Keep 'who you are' distinct from 'what you can do'
2. Hierarchical permission models: Design for complex organisational structures from day one
3. Pluggable identity providers: Architecture should allow multiple identity sources
4. Cross-client isolation: Prevent information leakage between tenants

Key takeaways

• JWT is an excellent starting point but has specific limitations for scaling B2B products
• Consider authentication architecture as a strategic product decision, not just an implementation detail
• Build with enterprise requirements in mind, even if your current customers don't need them yet
• Authentication migrations are possible but costly - making informed early choices will save you significant time and money down the line

Yours,
Søren

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Concerned about your authentication architecture's scalability? I offer targeted API security audits to identify potential authentication bottlenecks before they impact your growth. Let's schedule a 15-minute consultation to discuss your specific challenges.