Dear SaaStr: How far in the SaaS can a 10 or 20 person team go?

I know many are talking about AI fueling 1 person, $1B start-ups.  I hope that happens.  But maybe … not so much in SaaS.

Today, the most efficient public SaaS company is probably Doximity, at about $700,000 in revenue per employee.  

They get many network benefits, being the “LinkedIn for Doctors”.  More on Doximity here.

So that’s probably as efficient as you can get outside of AI magic.

If you are sales-driven, you’ll usually stall out at $1.5m-$2m in ARR or so if you don’t start growing the team to the next level, The First 50.

There’s just physics here to get to $10m in ARR in a sales-led model, even a partially sales-led model:

• After $1.5m or so at the very latest, you’ll need to start hiring dedicated customer success professionals. Assume 1 per $1m in ARR, you’ll need to scale a team of 5 at least to get to $10m in ARR.
• You’ll need another sales rep at least per every $500k in new ARR. In the early days, the CEO may do it all, or a single hero rep. But even with a higher quota than $500k, you won’t hit a yielded quota that high. And reps take time to scale. So best case, to get to $10m ARR from $1.5m, you’ll need at least 15 reps to get there, and really more so you don’t stall out. And you’ll need a few managers to manage them.
• You’ll need a full marketing team.
• You’ll need a product development team, at least a couple folks, to keep up with your much more complex roadmap.
• Even best case, it’s hard to imagine a dev team tinier than 8–10. And you’ll need a real QA team as you scale. You can’t hack QA forever.
• As you scale, you’ll need a dedicated 24×7 devops/techops team. It’s hard to do this with < 3 folks.

Add it all up, and 10–20 folks can hack their way to $1m, $2m, maybe even $4m in ARR if the product is relatively simple, the leads are mostly in-bound, and sales is simple, too.

But at least by then, your growth will slow down without the human horsepower.

It takes a team of 50 to maintain most scaling SaaS apps, and it takes 100 to get you past $10m ARR and beyond. More here: What Your First 100 Hires Will Look Like

(Image from here)