Fynn GloverCo-Founder & CEO, Schematic · Co-founder & CEO of Schematic | Runtime monetization infrastructure for SaaS & AI companies

How do SaaS companies manage entitlements—and what’s the best approach for growth?

20 Jan 2025 · 1 min

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1:09

In this segment, two speakers outline the main approaches SaaS companies use to manage product entitlements. They list six options: (1) hard‑coding entitlement logic directly in the application, (2) storing entitlement rules in a database, (3) inserting a middleware layer that mediates between the app and downstream business systems, (4) using feature‑flag systems as a dynamic entitlement mechanism, (5) outsourcing entitlement checks to external API services, and (6) employing token‑based entitlements via an authentication provider. Speaker B confirms that most companies start with hard‑coded entitlements because they are fast to implement, but quickly encounter scalability and maintenance problems, prompting a shift toward more flexible, data‑driven or service‑oriented solutions. The discussion frames the landscape of entitlement strategies and highlights the trade‑off between speed of launch and long‑term scalability.

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companies can either go hard-code the entitlement, companies can take a more database-driven approach, which sounds like what you guys are doing, where there are rules stored in the database. Um, companies could take a middleware approach, um, where there's a system to own entitlements between the application and the downstream business systems. You could maybe consider feature flags as an approach to entitlements. You could kind of consider API services that you might outsource to, or you could kind of consider like token-based entitlements if you were trying to do entitlements through like an auth provider. Do you feel like those describe how most companies might consider entitlements and approach entitlements, or is there anything missing in that frame?
I think that, that's a good range and that does cover most of it. Although majority of the ones I've seen, uh, have been more the first couple hardcoded and which always leads to a whole slew of problems. It does make it easier to start with and get things going quick, but at some point you hit that wall where you— it's not going to scale.