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.

Tomasz Tonguz

More SaaS + Software Stats

Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

Customer Segmentation analysis will help point out which are your most profitable segments

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

The top 50% of the fastest growing SaaS businesses generate much higher upsells than their competitors. The larger the business, the greater the impact of upselling

Negative Churn and Expansion Revenue

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts

In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales

More Growth Strategy Stats

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

The average SaaS company spends just 6 hours determining their pricing strategy

At Twitter, 10 percent of tech roles are staffed by women

Three uses for the SaaS Guidelines

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

Women in western countries use the internet 17 percent more than their male counterparts

The venture-backed companies that were acquired most often had a 7 percent share of female execs, as opposed to 3 percent at unsuccessful (unacquired) firms

SaaS businesses face significant losses in the early years (and often an associated cash flow problem)

47% of millennials want to work at diverse companies, according to a recent study.

The largest SaaS companies (>$75million yearly revenue) attribute 2.5x as much new revenue to upselling than the smallest SaaS companies (<$1.25million): 28% versus 11%