I've noticed many successful founders have a new KPI for their second startup: revenue per employee
They built huge companies the first time around, but got so bloated they didn't like working at their own startup anymore
Learn from them: track this for your first startup too
— Aaron Epstein (@aaron_epstein) November 4, 2024
So leading late stage investor Iconiq Capital has its latest report out on SaaS metrics, you can review the whole report here.
There’s a lot on growth vs. effciency, and how growth is still 2x as important as efficiency, etc. But both matter 😉
Most useful to me what this great chart across their entire portfolio of SaaS leaders:
These are useful yardsticks for folks scaling:
- At less than $25m ARR, actually SaaS start-ups aren’t any more efficient than in 2017-2019, at $130,000 per employee / FTE. Although that’s still more efficient than the Boom Times.
- At $25m-$100m ARR, SaaS scale-ups are about 25% more efficient than they used to be, at $172,000 in revenue per employee / FTE. Time to get real at $25m ARR, apparently 😉
- And at $100m+ ARR, they are 20% more efficient then they used to be, at $249,000 in revenue per employee. On the path to the $300k+ we see in public SaaS leaders.
These metrics shouldn’t surprise you, but it’s helpful to see them this way. You need to skate to $175,000 in revenue per employee by $25m ARR, and then $250,000 after that.
Can you do it?
A related post here:
