The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

Statistic Info

In the past, we have benchmarked the revenue per employee of large publicly traded SaaS companies and determined that the average is about $200k of revenue per person. But, that analysis examined revenue per employee that only one point in time.

High-growth companies scale their teams very quickly. In fact, the companies in the sample set grew their teams by 56% annually over five years, which nets out to about 8.5x growth, from 204 employees to 1750 employees on the median.

Despite the massive growth of these organizations, the best companies are able to maintain or even accelerate their revenue per employee. In fact, increases in revenue per employee as a company scales is an incredibly positive sign of the health of the business. It indicates that the company is achieving economies of scale. Those economies of scale may exist as a consequence of a strong brand, monopoly-like characteristics within their market segment, improving sales efficiency, increases in contract size, better rates of customer upsells, etc. But in all cases, it’s a hallmark of a company whose economics are improving with time.

More SaaS + Software Stats

More than 1/2 of SAAS companies increased their spending on customer retention last year

Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there

The metrics that matter for each sales funnel, vary from one company to the next depending on the steps involved in the funnel

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR

Revenue per employee has been steadily increasing in SAAS companies. It serves as a great longitudinal measuring stick to understand the increasing or decreasing efficiency of the business

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

Companies with longer contracts (2+ years) reported the lowest annual unit churn

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%

Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000

More Growth Strategy Stats

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years

In 2019, spending on IT services is expected to amount to 1,016 billion U.S. dollars worldwide

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

Revenue Renewal Rate= (MRR up for the renewal at beginning of month- MRR not renewed at the end of month)/ MRR up for renewal at beginning of month)

Increases in revenue growth rates drive twice as much market-capitalisation gain as margin improvements for companies with less than $4 billion in revenues

In 2017, Foxconn Technology Group achieved revenue of 158.15 billion U.S. dollars.

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

Three uses for the SaaS Guidelines

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.