Tom Tunguz

DECEMBER 13, 2022

So, did headcount at the Series A. In 11 years, the median headcount at Series A swelled from 15 to 28. [1]. 1] Thank you to the Pitchbook team for running the headcount analysis data. [2] More capital meant the constraints of yester-decade no longer applied. Founders declared a maximum acceptable dilution instead.

Headcount 278

Headcount Venture Capital Startup Metrics 278

SaaStr

FEBRUARY 18, 2022

Sales-driven SaaS startups end up with about half their headcount in sales and marketing. 2x the sales headcount you thought you did to hit the full plan for this year, and Q1 of next year. It sounds high at first, until you realize that's just how the math works. Software itself and other departments get leverage.

Scaling 346

Scaling Headcount Sales Marketing 346

SaaStr

NOVEMBER 18, 2022

There is almost no software and non-headcount budget for CS. 64% of CS teams spend $200,000 or less a year on non-headcount, with growth stage companies spending the least, just 0.1% I generally see CS reporting to a CRO as a recipe for conflicts, but sometimes it’s the best option: #2. This data is interesting. of revenue.

Customer Success 311

Customer Success Headcount Churn SaaS 311

SaaStr

MAY 10, 2023

At the end of the day, in SaaS, efficiency really comes from growing revenue faster than headcount. Almost everyone is doing more with … yes, more headcount, but only a smidge more. Revenue Up 30%, but Employee Count Only up 10%, to 7,055. Salaries and comp are the vast majority of expenses. Including HubSpot. #4.

SMB 274

SMB Headcount SaaS New CTO 274

Tom Tunguz

AUGUST 15, 2021

Post-PMF, the organization must evolve: it has to grow headcount and then manage that headcount well. It’s easy to miss that detail when building a headcount plan. They write code, author blog posts, publish the website, attract customers, with the goal of achieving product-market fit. On the left, there’s one.

Headcount 358

Headcount Startup Retention Scaling 358

Tom Tunguz

MARCH 27, 2023

The antidote: greater pipeline-to-quota coverage ratios by either increasing the top of the funnel or reducing the account executive headcount. These benchmarks suggest startups should plan on materially longer sales cycles into 2023. The data analysis uses the results from the 2023 GTM Survey.

Startup 296

Startup SMB Sales Headcount 296

SaaStr

JANUARY 29, 2021

Let’s say you are at $10m ARR and decently funded, you’ll probably have 100 headcount by this point, or at least, by $15m ARR. You’ll probably want to add field sales (for Big Deals) by $10m ARR or so, another 2-3 headcount here, minimum. Let’s assume that takes 5 headcount, minimum, ideally 6. >>

Headcount 347

Headcount Customer Success Engineering Sales 347

SaaStr

JANUARY 4, 2023

Slowing headcount growth — like lots of others. Okta headcount grew 32% year-over-year, fairly consistent with revenue growth, but then Okta like others slowed down hiring. Okta is seeing higher SMB churn and more ROI scrutiny, but is also benefitting from some customers wanting to centralize on fewer core vendors.

Headcount 305

Headcount SaaS Revenue SMB 305

SaaStr

NOVEMBER 16, 2022

Like many tech companies, Monday added a ton of headcount in 2021. It then added only 63 employees last quarter, and plans to continue with very slow headcount for a while. Another reminder to go global in SaaS as early as you can! #10. Slowing hiring has been key to driving up free cash flow.

SaaS 311

SaaS Headcount Scaling Revenue 311

SaaStr

MARCH 8, 2023

Don’t Tie Revenue To Headcount “You want to get away from a business model where every incremental dollar requires incremental hiring,” says Deatsch. So instead of focusing on scaling headcount quickly, work toward growing revenue quickly.

Enterprise 237

Enterprise Headcount Revenue Sales 237

OpenView Labs

OCTOBER 2, 2019

Headcount Planning. But headcount planning is often a useful place to start because the inputs required to make decisions are the least dependent on factors outside of the sales organization. This decision will drive many of your other headcount decisions. What ratio do you want between AEs and other sales roles?

Headcount 41

Headcount Sales Retention Scaling 41

Tom Tunguz

JANUARY 22, 2023

B2B companies have reduced headcount to a greater extent than at any time since 2020. The current wave of layoffs, a difficult component of the innovation boom/bust cycle, differs from the previous years’ dynamics. In the last three years, B2C startups’ ratio of layoffs have dwarfed B2B layoffs. In 2020, B2C companies cut 8.8x

B2C 249

B2C B2B Headcount Startup 249

Sales Hacker

JULY 24, 2018

Decreased revenue per rep, High turnover as you scale headcount. We made our machine more efficient even as we scaled, grew headcount, and skyrocketed our revenue. In the first six months of the year, our team’s headcount grew by almost 60%, yet our revenue outpaced that, growing by 142%.

Headcount 65

Headcount Scaling Sales Revenue 65

Tom Tunguz

APRIL 5, 2020

But starting that week, startups began reducing headcount by about 700 per day. ClassPass, one of the fitness startups to reduce headcount, reported a 95% drop in sales in 10 days. Over the weekend, I analyzed Roger’s data to answer this question. First, let’s look at layoffs by day. Friday spike to more than 1800.

Startup 301

Startup Headcount Transportation Travel 301

Intercom, Inc.

AUGUST 11, 2022

And they’ll be able to do this efficiently, without increasing headcount or hours logged. Of course, we’re acutely aware that many businesses are operating with less headcount, resources, and bandwidth than before so we narrowed down our advice to the five essentials for driving true bottom-line impact.

Headcount 237

Headcount Customer Support Strategy Scaling 237

SaaStr

MAY 12, 2021

But in theory, higher quotas should “pay” for specialization so in theory, this won’t impact headcount too much. But in practice it often adds 20% or so to the headcount in the model. Fifth, the more specialized the sales process is, the more folks you’ll need. SDRs, BDRs, etc. 2 Managers. = 22 heads /.75

Sales 317

Sales Headcount Scaling Revenue 317

Tom Tunguz

JUNE 25, 2020

Marketing teams spend 5-10% of ARR on programs (non-headcount expenses), and this is pretty consistent across ARR. Engineering:Account Executive headcount ratios scale from about 3:1 down to 1:1 as a company scales revenue. Most sales teams ramp AEs (both inside and outside) on six month time periods. This was surprisingly low.

Headcount 363

Headcount Benchmarks Customer Success Metrics 363

Clouded Judgement

APRIL 6, 2023

That’s a big difference, especially when you layer in the growth in headcount from 2021 to 2022. Essentially companies grew headcount significantly to add less ARR. We’re obviously seeing the rightsizing of this now with headcount reductions. The second chart comes from the latest MS CIO survey (below).

Cloud 130

Cloud Headcount SaaS Revenue 130

SaaStr

OCTOBER 4, 2019

But let me suggest one reason I learned when I was an exec in a F500 tech company: Headcount was most fixed for a year. Our group had a fixed headcount of about 800 to manage about $800m in revenue. Our group had a fixed headcount of about 800 to manage about $800m in revenue. Especially allocated headcount.

Headcount 161

Headcount Revenue Sales Management 161

Tom Tunguz

JULY 21, 2022

Management teams expect to reduce operating expense by 20% predominantly through headcount reductions or hiring freezes - everyone from sardine startups to public megalodons. Software automates manual work, provides leverage, and the total cost is often less than a headcount. Software does more with less.

Software 128

Software Headcount Churn Finance 128

Tom Tunguz

DECEMBER 6, 2022

Sales-lead teams cut headcount when account executives don’t attain numbers. Some about the data: PLG companies R&D spend hasn’t produced new business at the same rate as a dollar invested in sales & marketing post-Covid. Engineering teams do this to a lesser extent.

Headcount 280

Headcount Metrics Revenue Sales 280

SaaStr

AUGUST 16, 2021

“Adding headcount in customer success dept” — Hoala Greevy, CEO, PauBox. You can’t cut corners in headcount in success with automation. You just make the headcount more effective. MaestroQA has driven its ACVs up substantially, but that doesn’t always mean charging more for everything.

Churn 328

Churn Headcount Customer Success SaaS 328

SaaStr

MARCH 1, 2022

Headcount up 7%, while revenue is up 37%. But that only increases total headcount 7% which revenues went up 37%. That transition doesn’t happen overnight for legacy customers. 30% of their revenues are still from customers running Jira and friends on their own servers. But it’s now finally in decline, shrinking 12%. #5.

Headcount 311

Headcount SaaS Cloud Scaling 311

SaaStr

JANUARY 30, 2023

Without headcount planning for the support team, the company’s response time and customer satisfaction scores dipped. Forecasting can help define revenue numbers, the support you need to provide, headcounts, and opportunities to tap into new businesses. Use your data to inform.

Headcount 251

Headcount SaaS Revenue Scaling 251

Tom Tunguz

NOVEMBER 29, 2022

Napoleon’s March encodes 6 : the geography of the terrain, the route & the direction of the army, the headcount of the troops, the temperature of the battlefield, & the time of year of Napoleon’s doomed quest to conquer Russia. ” Most visualizations plot 2 dimensions. Click to enlarge it.

Data 209

Data Data Analysis Headcount 209

SaaStr

MAY 26, 2022

Net headcount rarely declines. This may sound harsh, But any "layoff" of a single digit % of employees is usually just a reshuffling. The bottom 5%-7% are moved out, to replace them with better performers. — Jason BeKind Lemkin #???????????? jasonlk) May 25, 2022. Layoffs sound scary, and they are scary.

Headcount 296

Headcount SaaS Scaling Management 296

SaaStr

JUNE 4, 2022

You start making up for it in volume — with headcount. Your life becomes all about recruiting, even more than it was. It’s harder to find that Magical VP that can make a huge difference. At $100m+ in ARR, the hardest part is you have to add a Unicorn each year.

SaaS 351

SaaS Headcount Revenue AWS 351

SaaStr

NOVEMBER 17, 2022

If you add $10m this year, maybe increase headcount $5m (worth of com)p. $20m, Keep hiring. Always keep hiring. But — hire more slowly than you are adding ARR. Ideally, hire half as fast as you are growing ARR. Keep growing and building that amazing team. Just fund it with half of your ARR growth.

SaaS 223

SaaS Headcount Startup Scaling 223

SaaStr

JULY 25, 2021

But in theory, higher quotas should “pay” for specialization so in theory, this won’t impact headcount too much. Fifth, the more specialized the sales process is, the more folks you’ll need. SDRs, BDRs, etc. But in practice it often adds 20% or so oto the model. 4 SDRs to screen the deals. 2 Managers. = 22 heads /.75

Sales 306

Sales Headcount Scaling Revenue 306

SaaStr

MARCH 20, 2023

Some define it by headcount, typically around 200-2000 employees, and others by revenue, generally $10M to $1B annual recurring revenue. In rapidly growing companies, the headcount can go from 500-3000 in a matter of months. Why The Mid-Market Is So Messy The mid-market is hard to define. They’ll think it’s them.

Enterprise 193

Enterprise Scaling SMB Marketing 193

SaaStr

JUNE 27, 2022

In theory, higher quotas should “pay” for specialization so in theory, and this wouldn’t impact headcount too much. Fifth, the more specialized the sales process is, the more folks you’ll need. SDRs, BDRs, SEs, etc. But in practice, you can’t ask AEs to pay for the help they can closing. So it often adds at least 20% or so to the model.

Sales 234

Sales Headcount Scaling Revenue 234

Tom Tunguz

AUGUST 17, 2022

A spike of mid-market leads because a competitor has sunsetted their product raises the question of whether to grow the mid-market AE headcount. Sales cycle delays shift pipeline the business may face headwinds closing this quarter’s number. Pipeline is prologue. It’s worth paying attention to.

Headcount 199

Headcount Metrics Onboarding Sales 199

SaaStr

FEBRUARY 11, 2020

Because headcount is often fixed in BigCos. Because overall headcount might be fixed at say 15,000. How will the business be staffed if it does really well? Doing better than expected also can also be an issue! I lived this. If you grow say from $20m to $200m ARR, can the BigCo really give you 1,000 more folks to grow it?

Acquisition 212

Acquisition Headcount Business 212

Tom Tunguz

JUNE 20, 2020

We can derive the table above if we look over the entire respondent base and bucket headcount by ARR. This post is part of a series leading up to SaaS Office GTM Edition on June 24 in which we’re reviewing the results of the 2020 Redpoint GTM survey. Today, we’re answering the question: how do teams grow as a startup scales?

SaaS 334

SaaS Scaling Headcount Customer Success 334

Intercom, Inc.

AUGUST 23, 2022

With increasing business costs and reduced headcount, companies are feeling the squeeze as they also grapple with rising consumer expectations. This means customers are far less likely to churn – resulting in a continuous rich source of revenue for your business, all without burning out your team or investing in extra headcount.

Customer Support 211

Customer Support Retention Headcount Churn 211

SaaStr

JANUARY 25, 2022

You start making up for it in volume — with headcount. Your life becomes all about recruiting, even more than it was. It’s harder to find that Magical VP that can make a huge difference. At $100m+ in ARR, the hardest part is you have to add a Unicorn each year.

SaaS 230

SaaS Headcount AWS Churn 230

Tom Tunguz

JUNE 26, 2022

The difference is starkest in headcount: Coinbase employs more than 5,000 people while Uniswap counts fewer than 100. Coinbase operates a centralized exchange, while Uniswap runs a decentralized exchange (DEX). Centralized exchanges hold or custody user accounts. DEXes rely on users to custody accounts in wallets.

Benchmarks 234

Benchmarks Headcount Revenue Business Model 234