The Ultimate B2B SaaS Playbook
My Take on the Margins, Marketing & Manpower Powering SaaS Growth
We've already introduced business models in a previous publication, and here's something that caught my attention: over 70% of startups in India are either tech or tech-enabled. That's massive! It means most entrepreneurs are building their companies with technology at the core—whether it's pure software or using tech to solve traditional problems. This is exactly why I decided to kick off my Business Models series with the Technology sector. I want us to dive deep into how these tech companies actually make money, scale, and create value. Let's start where the action is and break down the models that are shaping India's startup landscape.
Same Industry, Different Game: How Tech Companies Actually Make Money
Here's what's fascinating about tech business models - the economics are completely different based on three key factors: what you're selling, who you're targeting (B2B vs B2C), and who pays you (users vs advertisers vs taking a cut of transactions).
B2B companies solve complex problems and charge premium prices, think thousands per month with fat margins. B2C apps work with smaller amounts but need millions of users to hit the same revenue. Ad-supported models need massive eyeballs to match what a few hundred business subscribers generate.
Then there's the marketplace magic - companies like Airbnb, Swiggy, and Zomato earn 3-30% commission on every transaction flowing through their platform.
The beautiful part is that each model has completely different growth strategies, cost structures, and scaling patterns. Throughout this series, we'll break down the real numbers behind each approach and what makes them tick.
Three Ways B2B SaaS Companies Charge: It's All About Who and How Much
Something I've noticed while studying B2B SaaS companies is that they've basically figured out three main ways to bill their customers, and each one completely changes the business dynamics.
Per client billing is the simplest - one flat fee regardless of users. Basecamp charges $299/month for unlimited everything, CartHook does upto $599/month whether you have 5 or 50 employees. Clean and predictable, but you're leaving money on the table with bigger clients.
Per user billing is where most SaaS companies live today. Salesforce charges $25-330 per user monthly, Slack does $8.75-15 per active user. Got 10 sales reps? Pay for 10 licenses. Add 5 more? Your bill grows accordingly. This model is brilliant because revenue scales directly with customer adoption.
Per function billing gets sophisticated. HubSpot lets you buy Marketing Hub ($20/month), Sales Hub ($25/month), or Service Hub ($20/month) separately. Zoho does the same - pick CRM at ₹800/user/month, Books at ₹749/month, or Expense management at ₹250/user/month independently.
The Truth About SaaS Economics: Why Variable Costs Are Almost Zero
Here's something that blew my mind when I first understood it - tech companies like Unicommerce charging ₹3 per order item have almost zero true variable costs per transaction.
Most "variable costs" in SaaS - hosting, support, infrastructure - are actually semi-fixed costs that get cheaper as you scale. You don't need double the servers for double the transactions. Support gets more efficient. Software maintenance spreads across everyone.
The real variable costs are miniscule!
For Unicommerce's ₹3 pricing:
Payment processing: ₹0.12 per transaction (~4% per transaction)
Third-party APIs: ₹0.10-0.30 for per use/instance of SMS, emails and logistics integrations
Infrastructure: Minimal compute/storage costs
Total genuine variable costs: ₹0.25-0.50 per order
This means Unicommerce keeps ₹2.50-2.75 out of every ₹3 (85-90% gross margin) before fixed costs. With ₹104 crore revenue processing 770+ million orders annually, they're essentially printing money.
Here's the secret sauce: the marginal cost of processing order #1 billion equals processing order #1,000. Once you've built the platform, adding transactions doesn't proportionally increase costs.
This is exactly why tech companies grow so fast and achieve massive valuations - unit economics improve with every single transaction. It's not magic, it's just math.
Gross-Margin-Fueled Blitzscaling!
Tech companies’ obscene gross margins let them experiment with percentage-of-revenue marketing like referrals, resellers, digital sales partners, and more. Unicommerce’s playbook mixes smart partnerships, direct sales, and ecosystem magic, each with fixed and variable costs.
1. Partner-Driven Sales (Variable)
Service, Referral, and DSA partners onboard clients via 270+ integrations. Unicommerce pays 5–10% commission per deal, a variable cost tied directly to revenue.
2. Direct Sales Teams (Fixed + Variable)
To win brands like Mamaearth or SUGAR Cosmetics, Unicommerce invests in sales reps (₹50,000–100,000/month salary) plus 5–10% commission per closed deal—a blend of fixed salaries and variable commissions.
3. Content & Thought Leadership (Fixed)
Webinars, whitepapers, and industry reports cost ₹5–10 lakh annually. This fixed investment builds long-term brand authority and organic lead flow.
4. Product-Led Growth (Variable)
Plug-and-play marketplace and logistics integrations drive customer acquisition with minimal incremental cost per transaction—a low-variable channel.
5. Strategic Acquisitions (Fixed)
Acquiring Shipway for ₹68.4 crore instantly adds clients and ups cross-sell, a major fixed outlay that reduces future CAC.
By blending variable commissions (40–50% partner referrals, 15–20% integrations) with fixed investments (30–35% sales teams, 5–10% content), Unicommerce efficiently wins customers in a crowded market.
Salaries Drive the Engine of Tech Growth
Technology companies pour most of their budget into salaries and semi-variable tech costs. We have already covered the tech costs before, let’s focus on the people side. There are three salary buckets:
Product Development (R&D)
Customer Success (G&A)
Sales & Marketing
Unicommerce, with ₹104 cr revenue in FY24, allocates roughly:
R&D: 18%
Customer Success: 22%
Sales & Marketing: 50%
Their focus is on sales and partnerships drives rapid client acquisition, supported by solid product and success teams.
Company HubSpot Shopify Freshworks R&D 29.6% 15.4% 23.1% Sales & Marketing 46.4% 15.7% 54.8% G&A (incl. Customer Success) 11.4% 4.6% 25.4% Primary Focus Increase Sales R&D and Sales Increase Sales
By watching how these companies allocate salaries, you can see exactly where they’re placing their bets: building new features, keeping customers happy, or aggressively expanding the customer base.
To sum up
Here’s the nutshell of a SaaS business model - why these companies scale like rockets:
Gross margins of 85–90%+
Once the software is built, serving customer #1,000 costs almost the same as #10. That insane margin power lets SaaS companies reinvest heavily without bleeding cash.
Variable marketing spend sits around 18–20% of revenue
In the early days, you’ll see Shopify at 6–10%, Unicommerce at ~20%, HubSpot at ~19%, and Freshworks at ~22% funneling into performance ads, partner commissions, and referral rewards. As you mature, you can drive that down to 7–10% by leaning more on organic and partner channels.
Huge investments in salaries
You’ve got three salary buckets—R&D (Shopify: 15.4%, HubSpot: 29.6%, Freshworks: 23.1%, Unicommerce: 18%), Sales & Marketing (Shopify: 15.7%, HubSpot: 46.4%, Freshworks: 54.8%, Unicommerce: 50%), and G&A/Customer Success (Shopify: 4.6%, HubSpot: 11.4%, Freshworks: 25.4%, Unicommerce: 22%). High headcount keeps innovation humming, customers happy, and pipelines packed.
The magic sauce? Combine high margins, smart marketing spends that shrink over time, and targeted salary investments. That’s how SaaS companies grow fast, stay profitable, and build lasting moats.
Disclaimer:
The information provided in this article was accurate at the time of publishing and is based on sources and opinions believed to be reliable. However, neither the author nor Main Street Analyst guarantees its completeness or accuracy at any future date. Nothing contained herein should be construed as investment advice or a recommendation to buy, sell, or hold any financial instrument. This article is intended solely for educational and informational purposes. Readers are advised to consult with a registered investment adviser and conduct their own independent research before making any investment decisions. The author and Main Street Analyst expressly disclaim all liability for any direct or indirect damages arising from use of this material, in accordance with applicable SEBI regulations.