Tom Tunguz

NOVEMBER 28, 2017

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. This is a proxy for when the business established product market fit.

Headcount 187

Headcount Scaling Software Business 187

SaaStr

MARCH 7, 2025

The Other Team Members section is cumulative with the prior headcount mentioned. So how big of teams are usually expected at each stage? Below are my rough guidelines for a typical SaaS company today. What does the CFO own? The CFO can own A LOT of really important areas many of which are outside of what you may think of as Finance.

Scale 319

Scale Finance Headcount Leadership 319

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. >>

Sales Hiring 350

Sales Hiring Headcount Scale Engineering 350

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

MAY 16, 2023

I analyzed the headcount patterns within these companies to shed light on three questions : How are these top companies changing their headcount through the downturn? What percent of headcount is in product & engineering? What percent of headcount is in sales & marketing? The typical company grew headcount by 57%.

Headcount 311

Headcount Startup Scale Engineering 311

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.

Sales Recruiting 363

Sales Recruiting Sales Hiring Scale Headcount 363

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.

Sales Recruiting 357

Sales Recruiting Startup Headcount Sales Hiring 357

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 323

Headcount Venture Capital Finance Startup 323

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 347

Customer Success Headcount Churn Revenue 347

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 364

Headcount Scale Benchmarks Retention 364

SaaStr

MAY 24, 2023

At least in the short term, it is turning most of us can do more with about the same headcount in SaaS. #4. Headcount Growing, But Slowly. Staying basically flat in headcount for 3 quarters while growing a stunning 50% (!) They got there, in fact, two years ahead of schedule. 47% Of Revenue Outside the U.S.,

Headcount 328

Headcount Sales Hiring Scale Enterprise 328

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. UiPath proves it again. #3. 1M+ ACV Customers Growing The Fastest UiPath at $1B+ ARR is a tale of going … even more enterprise. $1M+

Scale 304

Scale Headcount Sales Hiring AI 304

SaaStr

SEPTEMBER 21, 2023

That works for a while, but you end up with not enough headcount if you do freeze hiring but still want to grow. More on this in our deep dive with co-CEO Eran Zinman: You can’t grow forever with no growth in headcount. But we’re lapping tougher times for many, and for many others, it’s just plain time to hire again.

Sales Hiring 328

Sales Hiring Headcount Scale Cloud 328

SaaStr

MAY 30, 2023

And very few of you are doubling headcount, vs everyone in 2021. Hiring has way slowed down, but many folks are still hiring, albeit at a reduced rate. 56% of you aren’t hiring, or barely hiring. But a good chunk of you are still hiring, albeit in moderation. This is what we are starting to see across public SaaS leaders as well.

Sales Hiring 278

Sales Hiring Headcount Engineering Revenue 278

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 350

Startup SMB Headcount Sales 350

SaaStr

SEPTEMBER 19, 2023

Some of the changes we’ve seen in the last year or two include: CAC reduction Headcount optimization Price complexity Quality of revenue A different environment means a different strategy, and Notion Capital lays out four business model changes that could be helpful based on what peers are doing. You don’t want to be there.

Business Model 306

Business Model SaaS Payments Payments Headcount 306

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

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

Scale 317

Scale Sales Hiring Headcount Sales 317

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 Sales Hiring Headcount Technical Review 328

SaaStr

APRIL 7, 2024

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. It’s tough for founders to grok 40%+ of their headcount forever may be in sales. Add more structure here, and everything gets better. #6.

Sales Hiring 315

Sales Hiring Scale Headcount Sales 315

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.

Scale 325

Scale SMB Headcount New CTO 325

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.

Scale 317

Scale Headcount Sales Hiring SMB 317

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.

Headcount 321

Headcount SMB Engineering Scaling 321

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?

Scale 363

Scale Scaling Sales Hiring Software Review 363

SaaStr

AUGUST 23, 2024

Once a VP of Sales that is struggling starts pushing for a lot more sales headcount … it’s time to realize it’s not working. In fact, fewer sales reps often in the short term solves the problem. You focus leads and opportunities on the best reps, and then rebuild the sales team from there.

Sales Hiring 298

Sales Hiring Headcount Sales 298

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 320

B2C B2B Headcount Business Model 320

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 344

Headcount Market Research Acquisition Education 344

SaaStr

MAY 31, 2023

Everyone is basically doing more with not much more headcount (see next point). #4. Growing Headcount, But Much More Slowly That Revenue. Headcount is up 29% year-over-year, but revenue is up 50%. Also you can see sales & marketing headcount is basically flat, while hiring is almost all in engineering / R&D.

Headcount 246

Headcount Scale Sales Hiring AWS 246

SaaStr

AUGUST 18, 2023

Yes many public SaaS companies have done some sort of layoffs the past 12 months, they were often more really reorgs, though, without any net decrease in headcount. The key was “simply” keeping headcount flat. #3. Everyone is basically doing more with not much more headcount. Without really sacrificing growth.

Scale 245

Scale Headcount Point of Sale SaaS 245

SaaStr

NOVEMBER 22, 2023

Freezing Headcount is How They Got So Much More Efficient Again, a common story. But for now, AppFolio is staying leaner, with less headcount this year than last — despite impressive +29% growth. #4. Many that did are now re-hiring, from Monday to Salesforce and more.

Payment Services 289

Payment Services Payment Solutions SaaS Payments Payments 289

SaaStr

JUNE 25, 2024

Fund sizes shrinking = headcount reductions. Funds just plain got bigger over the past 10 years, and in many cases, the original GPs and Old Guard aren’t 100% ready to hand over economics and control. It’s complicated. Not everywhere, but in just enough places so you can see it and feel it.

Headcount 263

Headcount Trends 263

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 AWS Churn 351

SaaStr

JULY 31, 2020

Last year, the company doubled its headcount, tripled revenue and landed on G2’s Top 100 Global Software list. . And some of the marquee customers include MongoDB, Gitlab and Qualtrics. . The funding comes at a point when Chorus is in the hypergrowth mode.

Scale 359

Scale Artificial Intelligence Payments Payment Services 359

Tom Tunguz

JUNE 1, 2023

1 BDRs are often mapped to AEs at 1:1 ratio & if we assume BDRs account for 25% of sales headcount (the remainder includes AE, sales operations, post-sales, & management). Assume a 15% productivity improvement that results in a 1.5% improvement across the company.

AI 320

AI Startup Scale Headcount 320

Tom Tunguz

APRIL 1, 2020

The rule says that all employees of affiliated companies must be considered headcount. Historically, startups haven’t been able to access SBA programs because of this affiliation rule. For startups, this means every employee of every startup for every investor. Quickly, these numbers exceed the 500 employee limit.

Headcount 329

Headcount Payment Services Government Innovation 329

SaaStr

NOVEMBER 15, 2020

Hence, Twilio has a very high level of sales efficiency (and relatively small headcount). Many of Twilio’s bigger customers go through sales, but then a huge amount of the downstream revenue is “automatic” as customers use more. But there’s still a real sales team there. They just only need to directly touch a subset of the total revenue.

Scale 342

Scale Sales Hiring Sales Headcount 342

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

Scale 306

Scale Sales Hiring Sales Headcount 306