It’s a word you hear a lot when you talk to startup executives and founders. Building a nimble, adaptable, scalable team necessarily means building a balanced team, and SaaS startup founders are always trying to achieve the perfect balance for their teams.
And, in this sense “balance” is really another way of talking about “proportion”. What proportion of my company should be engineers? How big should my marketing team be in proportion to my customer success team?
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And it gets even more complicated.
Right-sizing your sales team is itself a balance ‒ between the general business philosophies about ideal company composition and the specific needs and goals of your particular company.
Typically, when SaaS businesses decide how many Account Executives (which we’re using here to refer to any quota-carrying sales rep) to bring on, they focus on the second part of this equation: They work backwards from their company’s specific growth goals to devise a suitable capacity model that takes into account quotas, employee attrition, time-to-ramp, etc. (For a full breakdown of this process, check out this comprehensive account from InsightSquared’s Business Analyst or this awesome post from Tomasz Tunguz on modeling your SaaS sales team based on marketing output.)
This process allows SaaS executives to ensure that they have the right number of AEs to hit their goals and work the leads marketing is producing, but it misses an important part of the equation: context.
How Does the Size of My Sales Team Compare to Similar Companies?
Context is especially important in this case because capacity planning is notoriously difficult and susceptible to poor goal-setting (especially for young, high-growth companies, for whom revenue projections are often inaccurate). For this reason, it is essential for young companies to gut-check their model with actual industry benchmarks about sales team size. Models are great in the sterile, theoretical world of capacity planning, but in the real world it’s important to have hard data about how actual companies look. Otherwise, a slightly misguided model could jeopardize your SaaS business for years to come.
But there’s a problem.
There really aren’t any reliable industry benchmarks out there that provide meaningful information about how big a SaaS sales team should be relative to overall company size. And what information there is is typically outdated or overly general.
This information gap makes it almost impossible for SaaS executives to feel confident when building their companies. Too often, they rely on overly general data or their gut, which is a perfect recipe for an out-of-proportion company.
First we created a survey to poll startups about how their organization’s structure evolved as they grew. The results helped us gut check our own model to see if we were relatively in line with other successful SaaS startups.
But we wanted to go further.