Last month, we reviewed two SaaS companies, HubSpot and InsightSquared, and contrasted how employees are distributed by department at their Series C stage. Briefly, we found that Sales roles represent 30-40% of company headcount, and that Services scales quickly behind Sales to deliver on boarding, customer support, and other needs to make sure new customers are well served.
In a survey from that post, we collected data on 13 more SaaS organizations ranging from 13 to 244 employees, and their headcount breakdown by department. After a quick sanity check to confirm the numbers were good, let’s review what some of these other orgs look like.
Pushing To 50: Engineering and Product Proving It Out
In our survey, seven SaaS companies with fewer than 50 employees shared their breakdowns. The numbers were very consistent between them–each of the teams in the company are balanced in size as the company works towards developing a product that can be rapidly sold. Because they haven’t found a process for selling the software in a repeatable fashion, the marketing and sales engine hasn’t begun to grow up. The company is in the hunt for a real sales process that is repeatable and can be taught to new employees. The Services organizations (delivering the product to customers) in these companies is always small – representing at most four employees.
This changes dramatically at companies that have found a scalable solution.
50+ Employees, Growing Quickly
6 of the 13 companies have more than 50 employees today, with sales making up between 24 – 39% of their organization.
The marketing team varies wildly, from 1 person to 15 in some orgs at this size. The median and average are both about 7% of the overall team. An important finding here is that your marketing results need to scale in a non-linear fashion. To keep your costs in line, lead generation and marketing efficiency has to grow beyond headcount. As a result, inbound marketing strategies that create a compounding interest effect are very popular with SaaS startups. The marketing group should probably scale past one or two people to unlock more programs–all of the companies in our set had reached at least a four person team.
Services groups range in proportion, but are significant in every organization, making up 10-30% of the company. Customer success is critical for scaling organizations. In our set, the Services org averages 2.5 people before 50 employees, and 17.5 after 50. Customer Success may not be a priority early when proving out a process and top-line revenue growth is the goal, but it becomes very important as you grow and need to prevent and mitigate churn in your installed base.
If we go further with this research, it would be interesting to see how this has changed over time in more companies, and review by when the company was founded as well. For example, for companies founded earlier in the evolution of cloud computing, we might find that IT / Operations accounts for a much larger segment of the company, until many office IT functions were outsourced to the products of other companies. Dropping a new laptop in the hands of a hire with a Google Apps account is a viable solution now, but wasn’t ten years ago.
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