Dear SaaStr: At what stage should SaaS founders fully stop being individual contributors?
I’ve come up with 2 rough rules here to avoid stalling out:
- Try to have a complete 1.0 management team by $4m ARR at least. Earlier is better, of course. And try to hire at least 1 strong VP by $1m ARR. But if by $4m ARR or so you don’t have a true VP for every role, or at least, almost all the roles here, that functional area will have grown too complex for you to be the Interim VP of. Things will slow down there. Almost always.
- Try by your Ninth Direct Report to hire a COO or someone that can manage at least half of the VPs. Eight direct reports is really the max you can handle, and even that is too many. It doesn’t leave the CEO enough creative time. Once you get to 6, 7 or 8 VPs … you need a COO or President or SVP to manage half of them. Pick the areas where someone great who has done it before, can do it again. The areas where you don’t add unique value. And find a COO/President/SVP to manage those reports. Ideally, by $10m ARR or so.
(note: an updated SaaStr Classic answer)
A bit more here: