How Quickly Does Headcount Scale in the Fastest Growing Software Businesses?

Tom Tunguz

Above, I’ve charted the headcount growth rate for 10 of the fastest growing software companies in recent history. I’ve normalized the years for when all the businesses were roughly at the same headcount - fewer than 50 people. What does the “average” hyper growth software company look like in terms of headcount growth? How quickly do the fastest growing software companies build their teams? The answer is incredibly quickly.

5 Ways to Keep Your Sales Machine Efficient While Scaling Headcount

Sales Hacker

Decreased revenue per rep, High turnover as you scale headcount. “It’s We made our machine more efficient even as we scaled, grew headcount, and skyrocketed our revenue. The post 5 Ways to Keep Your Sales Machine Efficient While Scaling Headcount appeared first on Sales Hacker.

[SaaStock Latam special]: How Superlógica grew 10x by improving pricing plans

SaaStock

In the last three years, it has grown from 60 to 225 in headcount, 10x in revenue and now serves 4 different verticals. Tune in for an extra bonus episode of the podcast, hosting SaaStock LatAm speaker André Baldini, CEO of Superlógica who tell us how the company grew revenue 10x.

Redpoint SaaS Startup Key Metrics Template

Tom Tunguz

This section covers employee satisfaction, headcount, and recruiting metrics. Over the last decade or so, I’ve compiled a metrics sheet to summarise a SaaS business. While no living document like this is ever perfect, this is currently the best board-level summary of the overall health of a business I have found. I’m sharing it so that others may benefit and improve it. If you have suggestions, please email me. Redpoint SaaS Metrics Template.

The Competition You Always Have: Headspace and Budget

SaaStr

Not that much given the overall headcount I nominally had assigned to me. A common VC-ism is that You Always Have Competition. This probably is mostly true, especially since 70% of the top SaaS companies are really just new versions of old, established categories.

1 Key SaaS Sales Metric to Fine-Tune Sales Productivity

InsightSquared

At the highest level, SaaS companies look at sales expense, headcount, sales productivity and SaaS metrics like: The cost of new customer acquisition (CAC). Sales is the Growth Engine. Sales is the engine driving SaaS company value.

Your Sales Year is Coming to an End. Are you ready?

InsightSquared

If you have open headcount for Q1 be interviewing in Q4. Behind headcount equals behind plan. It’s two weeks until December.

Sales 208

The Employee Productivity Patterns of Billion Dollar SaaS Companies

Tom Tunguz

The chart above shows the headcount growth of the median publicly traded SaaS company from year four through year ten of the company’s life. The multiplicative effect of headcount growth and improving productivity fuels the growth of the business. SaaS companies are marvelous businesses. They are more predictable than most other kinds of companies and in addition they demonstrate leverage from technology.

We Haven’t Hit Peak SaaS

Hitenism

In 2014, Mixpanel’s Series B pitch deck spelled out the company’s expansion plans over the next two years: 3x sales headcount and rapidly race towards distribution. Double headcount every 6-9 months.

By the time you're at $2-3M in ARR, you need a VP of Sales who's done it before

The Angel VC

As you can see in the spreadsheet and in the chart, based on these assumptions your total sales headcount increases from 2 to 9 in year 2 and from 9 to 30 in year 3. PS: As you can see in the chart below, there's a 1:1 correlation (approximately) between ARR and sales headcount.

What Sales Operations Can Learn from Restaurants

InsightSquared

As headcount surges, what specific fields mean, why they are useful, and when the business requires that information can be lost in the shuffle. Boston’s Trident Booksellers and Cafe thrums on a Saturday morning.

Sales 201

3 (free) tools to help SaaS founders with their 2017 planning

The Angel VC

Financial Plan This template helps you create a full financial plan that includes everything from revenue modeling to costs projections and headcount planning. (As you can see, I really like placeit.net :) ) In case you haven't started to think about your plan for 2017 yet, now's the time.

The 4 Challenges Facing Customer Success Teams in SaaS Startups

Tom Tunguz

Customer success teams must justify the investment of building a CS team, often at the expense of headcount in another team. Constrained by headcount budgets and burn requirements, startup leadership teams often must choose between hiring an additional sales person or investing in a customer success person, for example.

Rules to Run Your SaaS Business By

Sales Enablement, SaaS and Growth

The number of employees when things get particularly troublesome are three, 10, 30, 100, 300 and 1,000 - before company headcount hits these milestones you’ll need to rethink how you operate. I’ve been working within the software as a service (SaaS) industry for more than five years now.

Top Customer Success Takeaways from Pulse Europe 2018

ChurnZero

How to Scale without Scaling Headcount. To ensure you success function scales without scaling your headcount, make sure everyone in the company is bought into the success mindset. Top 15 Takeaways from Pulse Europe 2018.

Why Fast Learning Curves are So Important to Startups

Tom Tunguz

Imagine you work at a startup that is growing headcount 125% year over year. Startups are business machines engineered to grow quickly. The forces of hypergrowth exert enormous strain on every aspect of the company. Internal break all the time as the company moults into a new skin. This is one of the most important things to keep in mind when hiring.

Another task for 2014 planning: review your messages

Practical Advice on SaaS marketing

Besides working through your budget, marketing programs, headcount, and whatever else you need to have in place when the new year rolls around, I’d suggest you add another item: Review your value proposition and messages. I'll start by apologizing.

OKRs – objectives and key results

The Angel VC

And in a fast-growing startup which doubles headcount every year and where each individual employee can have a much bigger impact than in a large enterprise, it's even more important that everyone is on the same page.

7 Steps to a Successful SDR Cold Calling Sales Contest (Case Study)

Sales Hacker

In a fast-paced environment where things like onboarding, headcount plans, comp, demo practice, deal strategy, and lots of other revenue-generating activities are top of mind and rapidly changing, it can be easy to lose sight of what matters most to people.

When to Scale Sales for Your SaaS Startup

Tom Tunguz

When is the right time to increase sales headcount for a SaaS startup? It is one of the most strategic decisions for early-stage business to make given the amount of effort and expense involved in building, managing and scaling a sales team. While there is no single absolute sign, neither qualitative nor quantitative, these are some of the signals I have found indicate it might be a good time to scale sales. First, the pipeline to quota ratio exceeds 6X.

How To Structure Your Sales Development Team: The Navy Seal SDR Framework

Sales Hacker

Of course, headcount is always a sensitive topic, so start small to show your executives what is possible. If executed right, the headcount is truly an investment. In this article, you’ll learn how to structure your sales development (SDR) team for maximum efficiency and scalability. Sales leaders, read on! The only easy day was yesterday.”. Navy SEALs. This is one of the most famous principles of the U.S. Navy SEALs.

How to Calculate Your Customer Renewal Rate

Totango

To account for that, you can insert potential and actual dollar values in place of the headcount: Customer Renewal Rate = Actual Renewal Value ÷ Potential Renewal Value X 100. Renewal is about a consistent revenue basis. The rate at which your customers extend their relationship with you determines how fast and how far your enterprise can grow. As such, being able to accurately calculate your renewal rate gives you insight into your customer success team’s performance.

Churn 80

The One Proven Strategy to Move Your Sales Team Performance Bell Curve

Sales Hacker

Or extra headcount? As a sales manager, your success is determined by the success of your reps. But, unfortunately, a lot of reps out there are barely hitting quota. In fact, the majority of today’s sales teams consist of average performers.

How to build a billion dollar sales team like Stripe

Inside Intercom

Despite the exponential growth they’ve gone through, Stripe have been refreshingly conservative about how quickly they grown the company from a headcount perspective. We are a very engineering-centric company, so 50% of headcount is always going to be on engineering.

When is the Right Time for Your SaaS Startup to Train its Sales People?

Tom Tunguz

At this scale, the economics of sales training are plain to see: less headcount required to attain the same bookings run rate. Sales leaders consistently underinvest in sales team training and development. As SaaS startups scale, sales execution becomes the most tangible metric of a business’ success, and the one by which the business’ health is benchmarked. Not to mention how the head of sales is evaluated. When is the right time to invest in sales training?

Building rapport: How storytelling helps you win over leads in live chat

Inside Intercom

But it’d be far more effective to share how Snapt uses Custom Bots to qualify and book meetings at scale, without additional headcount. In sales, the ability to connect with leads in real time can’t be understated.

Subscription60: Wednesday, March 27th

ProfitWell

The continued support of their investors has underscored the market potential and has led the crew to expand their partner ecosystem and double their headcount across engineering, sales, and marketing. Hello, my pals.

There’s more than one path to $100 million

The Angel VC

Like a large tanker at cruising speed that cannot quickly take a turn, a startup with a fast-growing headcount and a high burn rate loses some of its ability to quickly react to new information, new insights, or changes in the market. A couple of years ago I wrote a post titled “How fast is fast enough?”. The subtext of the question was “How fast do you have to grow if your ambition is to get to $100M in ARR and build a very large company”.

Insights from Typeform: Leveraging Customer Success to Scale Your Business

OpenView Labs

Over this time, our headcount has grown by over 10x, and our revenue has grown by over 60x. Successful customers are happy customers. Happy customers stick around and recommend your company to their friends.

How Revenue-Based Financing Works and What RBF Providers Care About

Chart Mogul

Sales & Marketing spend: headcount and discretionary. Revenue-based financing is quickly becoming a popular way for startups to raise funds without sacrificing equity. This is how it works. This is a guest post by Brian Parks, Managing Partner at Bigfoot Capital.

Why Sales Development Doesn’t Have a Seat at the Table (Yet)

Sales Hacker

Even without a clear understanding of her funnel, she can probably estimate the impact of a change in headcount accurately. Have you noticed the disconnect between how executives talk about Sales Development and how they treat Sales Development leaders?

The Sales Enablement Bot I Built at HubSpot

Sales Enablement, SaaS and Growth

Leveraging automation is not only interesting, but important - after all, if a SaaS company’s headcount growth exceeds revenue growth, it impacts its ability to invest in product, and if that happens, things can start to go awry.

The New Era of SaaS Forecasting

Baremetrics

Hiring sales reps is sexy but what about your growing hosting costs, operations, SaaS vendors per headcount, and travel? Data science is beginning to replace spreadsheets for entrepreneurs wrestling with uncertainty in their business models. How did we get here? What’s really new? And how can founders at any stage get better at predicting their future? Staring into the Void.

It’s a Rough Time to Be a Startup – Here’s What You Can Do About It

OpenView Labs

In-product guides and email cadences are low cost ways of steering users towards activation without engineering work or new customer success headcount. SaaS is now ubiquitous. Salesforce, which turned 20 in March, surpassed $13 billion in annual revenue this year.

HubSpot’s Michael Redbord on staying in touch with your customers as you scale

Inside Intercom

So often, when we think about investing in a support team, sometimes the conversation becomes about getting the headcount higher, higher, higher. But where else can you be investing outside of headcount to maintain that customer centricity?

How Important are Professional Services to Your Startup?

Tom Tunguz

The difference in valuation afforded to companies which grow revenues by leveraging technology rather than growing headcount can be 10x! Hortonworks filed their S-1 last week. Reading through the document, I noticed the company had quite a substantial fraction of professional services revenue; 41% of trailing 12 month revenue is services.

Automated customer service should be personal

Inside Intercom

When implemented well, automated customer service allows businesses to help more customers at scale without drastically growing headcount. Automated customer service isn’t a new concept. We’ve all navigated our fair share of automated phone menus or interacted with support bots to get help.

AI 65

SaaS customer acquisition: Feed it or starve it?

Practical Advice on SaaS marketing

Cut sales and marketing headcount and scale back spending on customer acquisition programs. If you manage a software-as-a-service (SaaS) company, at some point you'll be forced to make a tough decision about your customer acquisition process: Feed it or starve it?

5 lessons learned starting a new team within our sales organization

Inside Intercom

” In our case, a resounding “yes” required seeing a positive impact on customer expansion and one big enough to justify the fully-loaded cost for the additional headcount.

Financial planning for SaaS startups

The Angel VC

If you have a SaaS startup with a higher-touch sales model where revenue growth is largely driven by sales headcount, the plan needs to be modified accordingly. [Update 03/23/16: I've created an improved version of the template - check it out! ] A few people who read my recent post about financial planning asked if I could provide an example for a good financial plan, so I'd like to post one here.

The marketer that’s always on? Your chatbot

Inside Intercom

But how do you staff live chat for your marketing without ballooning your headcount? You might think chatbots are only for customer support, but using them to answer your customers’ questions is just one way to leverage chatbots.

The Ultimate Guide to SaaS Product Management

OpenView Labs

Nick Petri assesses how to find the right ratio of headcount between product management, UX and development. Special thanks to Miriam Richter, Adelina Irimia and Adina Mic for helping compile this guide.

From first touch to qualified lead: building a sales funnel for live chat

Inside Intercom

While it’s true you may need to incrementally add capacity for this new channel, the impact we’ve seen on our conversion rates has more than paid for the additional headcount. The promise of live chat for sales teams is being able to connect faster with high-quality leads.