In the last two years, the way software enters an organization has changed more than it did in the previous decade.
A single person tries a new AI tool out of curiosity. Their team adopts it the same week. By next quarter, it’s powering core workflows.
This bottom-up pattern has become the defining distribution motion for AI products. But when we conducted a detailed teardown of 50+ modern AI companies, something interesting surfaced. The story people tell about growth is incomplete.
If you zoom in closely, beyond interface and features, beyond the usual PLG playbook — you find a set of decisions that quietly shape the ceiling on adoption:
- How users sign up
- How organizations form
- How access is managed
- How identity fits into enterprise workflows
This article is an attempt to articulate that hidden layer: not as a celebration of “good UX patterns,” but as an examination of the structural choices that hundreds of fast-growing AI companies are making—sometimes deliberately, more often accidentally.
1. Passwordless isn’t a trend. It’s the natural consequence of AI-era onboarding.
In traditional SaaS, logging in was a neutral event—a gate that preceded the experience.
But in AI products, login is the experience.
Or at least, it's the first measurable success or failure as AI’s early adopters tend to be experimental, impatient, and operating in short loops.
A password prompt introduces a speed bump at precisely the moment the product needs momentum. It becomes a founding decision, made long before company maturity or security frameworks would normally justify it.
Teams adopt passwordless not only because it is more secure, but because:
- users try AI tools casually
- evaluation happens in seconds, not sessions
- repeated password based logins fragment the onboarding arc
- password recovery destroys activation rates
What’s striking is that once companies adopt passwordless, the decision becomes irreversible. No product meaningfully scales back to passwords.
Where do companies land?
The ideal auth system balances strong security with low user friction. Here's how some of the companies we analyzed position themselves on this spectrum.
2. The biggest UX improvement in identity are also the quietest
If passwordless is the decision, user experience is the implementation.
Teams often talk about authentication as if it's binary — passwords or not. But the reality inside fast-growing AI products is far more nuanced.
Once we dug into the identity flows of 50+ modern AI companies, a pattern emerged: passwordless succeeds only when the surrounding UX removes every ounce of hesitation.
A single moment of friction can erase all the theoretical benefits.
This isn’t speculation. The stakes are visible in the numbers: a bad signup or login experience drives 88% of users away. Naturally, the margins for error are vanishingly small.
Across the dataset, four UX shifts stood out — some now table stakes, others quietly spreading, and a few still early but advancing toward inevitability.
a) The quiet disappearance of “Sign up” vs. “Log in”
The very first choice most products present — “Do you already have an account?” — is anchored in an assumption that no longer holds.
Users don’t track whether they created an account last quarter, during a hackathon, via a teammate invite, or with a different login method. The distinction between “signup” and “login” is a construct of product teams—not of user intent.
What they remember is intent: I want to get in.
That’s why nearly 75% of the products we analyzed no longer ask the question at all. They collapse signup and login into a single adaptive flow:
- Try to log in with no account → we create one.
- Try to sign up but already exist → we log you in.
This sounds like a small ergonomics tweak but it isn’t. Merged identity flows eliminate:
- duplicate accounts created accidentally
- fragmented orgs caused by mismatched login paths
- workspaces users abandon because they can’t re-enter
- SSO routing confusion
- support tickets asking, “Do I have an account?”
b) The industry standard for login is now one-tap
Traditional OAuth login was once seen as “fast.” But in practice, it redirects you to Google's page, asks for permissions, redirects back. That's three pages for one action.
One-tap login collapses that entire sequence into a single, in-context interaction.
It displays the user’s Google profile right on the page, authenticates instantly, and never sends them elsewhere.
What’s particularly interesting is that one-tap runs on the same protocol as enterprise SSO — OpenID Connect. The only difference is the UI.
In other words, consumer-grade convenience and enterprise-grade security are no longer opposites. Modern identity collapses them into the same surface.
c) Passkeys are early today, inevitable tomorrow
Passkeys still feel new, but their trajectory looks identical to the early days of 2FA: low adoption at first, followed by a rapid curve upward as platforms bake them into defaults.
The underlying shift is fundamental. Passkeys:
- eliminate shared secrets
- turn devices into authenticators
- collapse “something you have” and “something you are” into one gesture
And more importantly, they introduce a form of authentication that works without the conceptual overhead of passwords or the friction of codes.
The pattern resembles 2FA’s curve: niche → recommended → expected. What looks optional now becomes table stakes in 3–5 years.
d) Context switching has become a baseline expectation
As AI products embed themselves inside companies, users aren’t just switching devices or identities — they’re switching workspaces.
A product manager might belong to:
- a production workspace
- a staging environment
- a personal testing space
- a client’s shared instance
Logging out and back in is untenable. Waiting for permission updates is disruptive and such workflow interruptions kill product stickiness.
That’s why more products now offer organization switchers — instant context toggles that preserve momentum. No re-authentication. No redirects. No break in cognitive flow.
3. Enterprise adoption hinges on 3 auth capabilities
As AI products grow, most teams run into the same pattern: bottom-up adoption moves fast. A single team starts using the product, others follow, and usage spreads organically across the company.
But the moment that spread reaches a wider organization, especially an enterprise — security and IT step in. And that’s when enterprise readiness becomes real.
In our research, that moment consistently triggered the same triad of requirements: SSO → SCIM → MFA Enforcement
- SSO is no longer optional for enterprise buyers. 78% of large organizations require it as a condition of evaluation.
- SCIM, despite being absent in the vast majority of early-stage companies, becomes necessary the second a product is used by hundreds (or thousands) of employees.
- And MFA rarely enters the conversation until procurement demands it—at which point it is no longer a “security feature” but an implementation requirement for the deal.
The identity roadmap for AI products is not following the traditional SaaS curve anymore. It is nonlinear: periods of rapid adoption followed by abrupt friction at the enterprise boundary.
Enterprise readiness framework
To understand how prepared each product is for enterprise adoption, we evaluated how clearly and deeply they support enterprise-grade authentication and identity provisioning.
Across the dataset, products fell into three distinct maturity tiers:
4. Invites shape organizational identity long before SSO or SCIM do
If enterprise readiness determines whether a product can scale up, invites and organization management determine whether it can scale sideways.
Across the dataset, three patterns emerged:
- Hybrid invites dominate (links, email invites, domain auto-join).
- 41% of products auto-associate users with corporate domains.
- 53% monetize invites, gating team expansion behind paid tiers
Invites determine:
- how teams form
- how billing ties to identity
- how roles apply across workspaces
- whether orgs remain coherent or fragmented
Every later layer including roles, permissions, provisioning, SSO routing—depends on the stability of org formation. If invites are porous, ambiguous, or inconsistent, everything built on top inherits that brittleness.
5. Roles and permissions evolve along a predictable curve
No team thinks they need granular roles at the beginning. And they don’t actually need it until the moment a customer goes from: 5 users → 20 users → 100 users.
That’s when uniform access stops working.
Finance shouldn't see production logs. Support shouldn't edit billing. Contractors shouldn't access internal datasets.
In our dataset:
- simple roles dominate early
- but 62% of companies with custom roles fall into the expansion stage
Building custom roles, safely and consistently, is difficult because of factors like consistent enforcement, auditability, per-tenant role definitions, UI for admins, safe defaults, migration paths.
Teams assume they can “add roles later.” But later usually coincides with enterprise pressure—which is the worst moment to redesign authorization.
We studied 50+ AI products, but there's one left to explore —Yours
Every product builds identity differently. This quick self-assessment helps you see how your stack compares — from modern passwordless flows to enterprise-grade control.
The real conclusion: identity does not have a single trajectory
It has a shape that reflects the company building it. The companies we studied made different choices for different reasons:
- Some prioritized activation speed over enterprise needs.
- Some built org structures early; others deferred entirely.
- Some implemented SSO first, others built SCIM reactively.
- Some moved to passkeys; others focused on OAuth.
In the beginning, optimizing for speed is rational. But growth introduces pressures that early decisions were not designed to withstand.
The AI companies that scaled cleanly were not the ones that predicted the perfect identity model. They were the ones that kept their identity adaptable —modular enough to evolve as their users, org structures, and buyers evolved.
That’s exactly why we built Scalekit: we turn identity into a set of modular, full-stack primitives that can be adopted incrementally, without rewiring your app every time your requirements evolve. Integrate it once, keep your product moving fast, and grow into enterprise-grade authentication without re-architecting anything later.
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