How to Figure Out How Fast Your Competitor is Growing in About 60 Seconds

One of the very earliest SaaStr posts, from way back in 2012, was on how to guess a competitor’s revenues from how many employees they have on LinkedIn.  It still mostly works, and you can roughly tell how much revenue a “normal” startup has from its employee count.  But it’s less precise than it used to be, with more startups highly funded, and others leaner due to PLG than before.  It’s still a decent hack though.

But one thing hasn’t changed since 2012 — how many sales reps you need to hit the plan.  Sales is still a people-driven business, and quotas and attainment haven’t really changed all that much over the years.  You still need about $400k per AE to hit the plan for SMBs, maybe $600k for SME, and up to $800k-$1m per AE for enterprise.  So just:

  • Search on LinkedIn for how many sales reps a competitor has
  • Multiply by $500,000 on average
  • That’s how much in bookings they plan to add this year.

You can tweak it “up” a bit for SMB, and down a bit for enterprise, but $500k is close enough in most cases, especially as most of us sell at a variety of deal sizes.

So with that one, quasi-public metric, you can very quickly guess how fast your competitor plans to grow in the next twelve months.

It really does work, and really gives you about the most actionable competitive intelligence you can find.  Most importantly, if they have 2x the number of reps you do, they really are planning to grow twice as fast this year.  If they have fewer, they may be claiming they are bigger than they are.  Etc etc.

Now as a startup gets really large, it can be a little bit harder to use LinkedIn this way, you have to futz with the filters more, etc.  You’ll have to remove some folks that claim to be in sales, but aren’t, or used to be, etc. It still works the bigger the company you research, but it gets harder after, say, 50-100 reps.  I’d say at bigger startups, given turnover and folks that don’t update their LinkedIn, you often have to cut the number of results returned by about 40% to get an accurate estimate.  That’s a good rough guess where the # of reps seems to be > 100.

But use this hack to not be surprised.  So many startup founders are surprised by the size and scale of their competitors’ sales orgs.  And thus their ambitions for bookings in the next 12 months.

 

Published on January 20, 2022

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