Tom Tunguz

AUGUST 2, 2023

If a startup raised a top quartile Seed round, Series A, B, & C, they typically would have grown headcount by about 6% in the last twelve months. The headcount growth rate for all other companies? No statistically significant difference in headcount. Why look at headcount growth? About double at 12%.

Headcount 244

Headcount Startup AI Scaling 244

Tom Tunguz

AUGUST 15, 2021

Let’s compare the organizational chart of two different startups. On the left, the startup is flat. When startups start, they tend to look like the company on the left. Post-PMF, the organization must evolve: it has to grow headcount and then manage that headcount well. Invest in great managers early.

Sales Recruiting 363

Sales Recruiting Sales Hiring Scale Headcount 363

SaaStr

AUGUST 9, 2024

From startup to $500M CARR, Spencer Burke, SVP of Growth at Braze, shares how Braze scaled a growth and customer success team. As an early startup team, you’re doing every job under the sun. We get lazy writing job descriptions, and taking shortcuts is a luxury most startups don’t have. But that was it.

Scale 296

Scale Sales Hiring Scaling Startup 296

Tom Tunguz

AUGUST 18, 2018

Startups are business machines engineered to grow quickly. Imagine you work at a startup that is growing headcount 125% year over year. This is a simple example but it proves the point of how much a startup can change very quickly. The forces of hypergrowth exert enormous strain on every aspect of the company.

Sales Recruiting 270

Sales Recruiting Sales Hiring Startup Headcount 270

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.

Scale 352

Scale Sales Hiring Scaling Headcount 352

Tom Tunguz

JUNE 18, 2019

People is the first section because people are a startup’s most important element. This section covers employee satisfaction, headcount, and recruiting metrics. The template is broken into six sections: People, Bookings & Revenue, Cash, Sales, Marketing, Customer Success.

Metrics 250

Metrics Sales Recruiting Startup Headcount 250

Tom Tunguz

DECEMBER 13, 2022

A funny thing happened along the way to Sand Hill Road in the last decade : startups stopped talking about how much runway a Series A would buy them. So, did headcount at the Series A. In 11 years, the median headcount at Series A swelled from 15 to 28. [1]. Capital scarcity curtails startup operation. Median Salary.

Headcount 325

Headcount Venture Capital Finance Startup 325

SaaStr

DECEMBER 18, 2023

At SaaStr Annual , IBM’s VP of Software and Technology Raj Datta and Director of Startups Kylie Rutherford shared how AI is changing the game for companies of all sizes. AI is a very competitive landscape, so startups have to ask themselves how they’re going to gain a competitive advantage with it.

AI 305

AI Technology Scale Startup 305

Tom Tunguz

JUNE 5, 2022

Top 10 Insights from the 2022 Startup Sentiment Survey. About 20% of those polled will conduct a layoff, and on average will reduce headcount by 20%. There’s no correlation between the amount of money a startup has raised and its runway. The typical founder feels 6.0

Startup 242

Startup Scale Headcount Compensation 242

SaaStr

MAY 29, 2024

Growing Headcount and Expenses, Just More Slowly Than Revenue The story for most SaaS and Cloud leaders. Grow headcount and expenses, but more slowly than bookings. #5. Most startups model about 5%-6% a year, and see that come down at scale. UiPath proves it again. #3. 1M+ customers are up 26% year-over-year. #4.

Scale 304

Scale Headcount Sales Hiring AI 304

Tom Tunguz

JUNE 20, 2020

Today, we’re answering the question: how do teams grow as a startup scales? We can derive the table above if we look over the entire respondent base and bucket headcount by ARR. The median startup with between 1-5M in ARR will have 12 engineers, 6 in sales and 3 in marketing.

Scale 363

Scale Scaling Sales Hiring Software Review 363

Tom Tunguz

JANUARY 22, 2023

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

B2C 322

B2C B2B Headcount Business Model 322

Tom Tunguz

AUGUST 23, 2020

Massive headcount growth presages large software purchases and expansion. To scale, a company must find customers in ever larger numbers. The ideal scenario is one where purely external signals confer a prospect’s propensity to buy. A prospect experiences hypergrowth is perfect example.

Scale 267

Scale Headcount Sales Startup 267

Tom Tunguz

APRIL 1, 2020

The key open question is whether the affiliation rule will admit venture-backed startups. Historically, startups haven’t been able to access SBA programs because of this affiliation rule. The rule says that all employees of affiliated companies must be considered headcount.

Headcount 329

Headcount Payment Services Government Innovation 329

The Angel VC

MARCH 22, 2012

It's a simple plan for an early-stage SaaS startup with a low-touch sales model – a company which markets a SaaS solution via its website, offers a 30 day free trial, gets most of its trial users organically and through online marketing and converts them into paying customer with very little human interaction.

Startup 189

Startup SaaS Payments Payment Methods Payment Solutions 189

SaaStr

APRIL 7, 2024

Instead of rushing to hire a VP early in the startup phase, wait until you have established a repeatable sales process and witnessed success with initial sales reps hitting quota. I see way, way too many startups where the VP of Sales doesn’t have a feature budget from engineering / product. Way, way too many founders do this.

Sales Hiring 315

Sales Hiring Scale Headcount Sales 315

Intercom, Inc.

AUGUST 30, 2022

This is especially important for small teams, where you need to operate at a scale far beyond your headcount (without burning out your team by working around the clock). Ready to take your startup to the next level? Best practices for choosing the right tools for your startup tech stack. Look for tools that can scale with you.

Scale 163

Scale Payment Services Startup AWS 163

SaaStr

SEPTEMBER 14, 2023

Because in the short-term, it often costs basically close to nothing to acquire a smaller startup with cash on hand, or do a corporate VC investment. So if Salesforce invests a few billion in AI startups, and those values at least don’t go down — there’s essentially no cost to Salesforce. What do I mean?

Acquisition 305

Acquisition Investment Headcount Banking 305

SaaStr

JANUARY 30, 2024

It’s a SaaS startup that basically fell out of product-market fit after the 2021 boom … but has enough revenue and high enough NRR to keep going. In some ways, NRR Zombies are outputs of the actions of 2023, especially for venture-backed startups. They did layoffs and froze headcount. It’s the “NRR Zombie”. What’s that?

Headcount 301

Headcount Finance Startup Trends 301

SaaStr

NOVEMBER 17, 2022

And tons of startups, worried about their cash reach now, are doing hiring freezes. For startups, many of even the most capital efficient are slowing hiring to calmly make cash last. In fact, I have a rule for most startups that have a decent amount of funding, and really, for most bootstrapped companies at scale. Keep hiring.

Headcount 263

Headcount SaaS Startup Scaling 263

SaaStr

JANUARY 30, 2023

Without headcount planning for the support team, the company’s response time and customer satisfaction scores dipped. As a startup, it’s hard to know if the timing is right and what to expect. Delivering the best customer experience With the surge in inbound leads, the business was growing exponentially.

Sales Hiring 278

Sales Hiring Payment Services SaaS Payments Scale 278

SaaStr

JULY 29, 2023

A classic and great deep dive in terms of how to scale your teams, headcount, and orgs: #2. The Cadence: How to Turn Your SaaS Startup into an Army w/Craft Ventures General Partner David Sacks A favorite on now to get the team to deliver more — without breaking them. #3.

Headcount 246

Headcount Startup Scaling SaaS 246

SaaStr

AUGUST 1, 2023

And yet many startups even at $100m+ ARR saw growth slow to 0% or close to it. But this time, instead of headcount, it was apps. Yes, some bigger companies went through layoffs too, but in many cases, they hired more folks back, and really just kept headcount flat or slowed its growth. The list goes on. What happened there??

Headcount 246

Headcount Finance Cloud Startup 246

SaaStr

MARCH 20, 2024

We were coming off an environment where startup funding was as fruitful as ever. Do you have to double your headcount to make it from $10M to $20M or even $2M to $5M? For headcount specifically, make sure that the constraint to growing faster is that you don’t have enough salespeople to work the demand that exists for your business.

Sales Hiring 306

Sales Hiring Sales Recruiting Scale Headcount 306

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. If you don’t instill this practice early on, it’s very difficult to add later.

Sales Hiring 264

Sales Hiring Enterprise Headcount Scale 264

The Angel VC

MARCH 23, 2016

Almost exactly four years ago I published a financial plan template for SaaS startups based on a model that I had created for Zendesk a few years earlier. The original v1 model was a very simple plan for early-stage SaaS startups with a low-touch sales model. You can remove, change or add roles in column H.

SaaS Payments 217

SaaS Payments Headcount SaaS Payment Methods 217

Tom Tunguz

OCTOBER 31, 2023

This year has been tumultuous : most startups reduced their bookings, and grinded through the first six months suffering through pipeline shocks - the result of CFO-budget pressure. For the last 3 quarters, startups have been executing on reduced targets, attempting to squeeze more juice from their Meyers.

Headcount 217

Headcount Sales Hiring AI Cloud 217

SaaStr

FEBRUARY 19, 2024

Instead of rushing to hire a VP early in the startup phase, wait until you have established a repeatable sales process and witnessed success with initial sales reps hitting quota. Unlike building a product team, there is no efficiency when building a sales org: half of your headcount will be in sales at $10m, $50m, or $100m in revenue.

Sales Hiring 290

Sales Hiring Scale Sales Headcount 290

SaaStr

SEPTEMBER 3, 2023

By freezing headcount for a year. Mathematically, if you keep the headcount flat and continue growing 50% like Monday or 30% at $2B like Hubspot, you get wildly more efficient. Controls Around How You Spend Money And Grow Without question, the proper controls for startups and scaleups have gotten worse over the last 8-10 years.

Sales Hiring 278

Sales Hiring Headcount Finance Technical Review 278

SaaStr

SEPTEMBER 14, 2023

Because in the short-term, it often costs basically close to nothing to acquire a smaller startup with cash on hand, or do a corporate VC investment. So if Salesforce invests a few billion in AI startups, and those values at least don’t go down — there’s essentially no cost to Salesforce. What do I mean?

Acquisition 263

Acquisition Investment Headcount Banking 263

SaaStr

OCTOBER 4, 2023

This is more of a look at startups. They grew headcount fairly aggressively from ‘21 to ‘22, and then Q4 of last year dipped and held flat before starting to regrow. Monday will probably add 25% headcount this year. Everyone has gotten much fitter, which will be a fundamental change to how we think and build startups.

Sales Hiring 289

Sales Hiring SaaS Headcount Compensation 289

SaaStr

FEBRUARY 14, 2024

The Head of CS has become an amorphous reporting structure in SaaS at many scaleups and startups because no one wants to own customer success. We all become new customer-oriented, so we say we’re focused on the existing base, but once the sales team becomes 30-40% of headcount, it tends to dominate every conversation.

Customer Success 304

Customer Success Sales Hiring Scale Headcount 304

SaaStr

JUNE 19, 2023

But we have enough revenue now (tens of millions) to think of it as a.bootstrapped startup And the #1 thing I’ve learned is … how different bootstrapping really is. The Right Amount of Headcount Is Far Less Clear When Bootstrapping. Probably Far Less is The Answer. SaaStr has 7 employees. Should we have 70?

Sales Hiring 245

Sales Hiring Headcount Startup Revenue 245

SaaStr

SEPTEMBER 20, 2024

You will need to hire headcount infinitely and linearly with revenue. Four minutes into an interview, they’ll say how the CEO or VC screwed them over, or the startup didn’t make it, and it wasn’t their fault. Whatever it’s growing, you have to grow your headcount in sales roughly. If it doesn’t work out, hire another.

Sales Hiring 309

Sales Hiring Sales Recruiting Scale Technical Review 309

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.

Sales Hiring 190

Sales Hiring Headcount Software Finance 190

Tom Tunguz

FEBRUARY 13, 2023

I’m watching public company earnings to identify early trends in the software market to inform startups’ plans for 2023. The surge in pipeline is notable given the uncertainty in the market but the close rates are low & sales cycles slow : another confirmatory data point for startups to plan cautiously in 2023.

Cloud 244

Cloud Azure Headcount Software Review 244

SaaStr

DECEMBER 11, 2021

And it’s been fun to see lots of startups and bigger companies internalize this. They wait for two reasons: first, it’s another headcount, which costs money, which can seem expensive when you have say just $5k-$10k a month in MRR and 6 months of runway left before you’re out of cash. Yet still … people wait.

Sales Hiring 299

Sales Hiring Customer Success Headcount Churn 299