14 ms·

The SaaS Org Chart

385 points by anacleto 5y ago

hectormalot 5y ago
I know it’s close to the truth, but it still feels weird that this hypothetical 50 FTE SaaS company has 2x the amount of sales/CSM folks vs technical profile. And that the whole product is in the hands of 6 devs (4x FE and 2x BE).
- ivraatiems 5y ago
  It's often a much bigger lift to get people to adopt your product than it is to make the product itself, especially now when so many SaaS markets are either captured by large players or, conversely, hypercompetitive.
- jcims 5y ago
  I used to think that as well, but sales doesnt scale like engineering, and their priorities provide a good counterbalance to engineering and even product priorities. The thing that I thought was broken about it is the bread first strategy. I would think it would be better to focus on a segment of the market until they start getting momentum. Many products we see that are targeted at smaller companies are going to be wholly unacceptable to large enterprises.
  - jcims 5y ago
    bread -> broad
- feoren 5y ago
  Yes, this is crazy to me. In a company of 50 people, six are working on the actual product!? What are all these directors of such-and-such doing all day?
ivraatiems 5y ago
It's really interesting how AAR scales per employee. The larger you are, better the ratio -- this helps explain why large companies can afford to pay so much more for top-level employees than small ones. I'm sure this seems obvious to some, but I'm not enough of a business/finance person to have really thought about this before. It helps crystallize some dynamics between, for example, my current employer and my immediately former employer; the former is able to pay dramatically more (around 150% on salary, plus equity) for essentially the same work, and gets more and higher quality talent as a result. I wonder how a smaller org can escape this problem, if at all.
- ec109685 5y ago
  A growing company doesn’t need to be profitable, so there’s no reason an engineer shouldn’t be compensated at market rate ever.
  - ivraatiems 5y ago
    That might be true for startups, but my former employer is a 20+ year old established company with a specific niche. Growth is limited, but business is stable and profitable. It's a different mindset.
    - pm90 5y ago
      In that case it sounds like they have found product market fit and are mostly content with the way the business is growing and likely don’t need the kind of “top talent” that you offer. They’re ok with “mediocre talent” since talent isn’t enabling growth or survival. The market is pretty brutal but I’ve seen many extremely talented folks work at mediocre organizations because of reasons other than financial. I guess everyone is happy with the arrangement.
      - ivraatiems 5y ago
        You'd think and hope so. To be honest, I think they're trying to have their cake and eat it too - that's part of why I left. They wanted to grow and had all these strategies for doing so, but not nearly the resources to do it, and were unwilling to invest in getting more of them. We got a lot done with a little, but there were clear limitations. It was an outlook I never quite understood. The core business was and is strong, reliably profitable and has made plenty of people quite wealthy and employed dozens more gainfully. Why mess with that success? What's in it for them? What's the point of (fake numbers) $100m in sales vs $50m when it comes to our 70-person company and small number of private, non-institutional owners? But I am, of course, not the one who makes such decisions.
  - Silhouette 5y ago
    A growing company with investors happy to throw away large amounts of money for years in case they end up with a unicorn doesn't need to be profitable. A growing company that was bootstrapped and is trying to make something actually worth selling in order to fund further growth is an entirely different situation.
thinkingkong 5y ago
Another way to think about this is ratios of budgets to departments, ratios of "core" vs "experimental" spend, and ratios of IC's to managers. If you map those constraints out for the system that you're building you can tailor things a little more to your business while making intelligent trade-offs.
ryanSrich 5y ago
Series A feels top heavy to me. Having a director or VP of Product at that point feels like a mistake. I also think you could do more delegating under the CTO. 12 reports is too much.
xondono 5y ago
Interesting examples, but starting at 50 employees sounds a little bit extreme to me. I also find way more insightful how you get from x founders to 50 employees than from then on.
- monocasa 5y ago
  Yeah, the only way this chart makes sense to me is as "what's your target for using your series X money" rather than "where you should be when you get your series X money".
- paxys 5y ago
  The company isn't starting with 50 employees on day 1. It's a guide for founders who have just raised series A-C.
julee04 5y ago
If anyone is interested in what a typical SaaS sales org chart looks like, here is a good example: https://www.saasae.com/levels https://www.saasae.com/levels
jxf 5y ago
Two remarks: * This feels way too hierarchical for the size -- there's significant distance from many employees and the CEO even at small sizes. * Could not disagree more with putting HR and Ops under the CFO (even in a 50-person company). That's a surefire way to have a neglected HR/people function.
- burlesona 5y ago
  At 50 people everyone is still within 1 skip-level of the CEO. That doesn’t seem overly hierarchical to me. What does seem a little surprising is how many “chiefs” the CEO has reporting to them. In my experience with companies around 50 people, things actually tend to not be sliced into so many pieces, but rather there are a few larger slices that are functionally heterogeneous.
  - ryanSrich 5y ago
    I think the three machines approach works best for companies 0-100 people (depending on the company, for SaaS it makes sense). Basically have someone own: 1. The product - CTO 2. The customer - (Could be a director or VP of marketing/sales/rev) 3. The company - CEO Anything beyond those three execs at or around an A round is nuts to me. I think a lot of people underestimate just how much you can outsource at that size. There almost no reason to have a COO when you’re less than 100 people. Same with a CFO. Either of those hires don’t become strategic until you’re doing $10+m in rev. Until then, use other SaaS services for payroll, book keeping, tax savings (MainStreet), etc. These take little effort use and can be setup by one of the founders in less than a day.
    - paulddraper 5y ago
      You're proposing a 100 person SaaS company without any sales or marketing exec? This is HN I suppose, so not entirely surprising.
      - ryanSrich 5y ago
        It’s literally the second bullet point in my comment. Did you miss it?
haram_masala 5y ago
For those of us who want to start an indie one-person SaaS, this is sobering - because it means that for a while, you’ll be doing all 50 of these jobs. And, paid far less than any of them.
- dsr_ 5y ago
  Here's the good news: when it's just you, you don't need HR, because there are no interactions between employees, no hiring and no firing. Before you have any income, you barely need a CFO function, and so on and so forth. Really, you only have about five roles: - make the service - run the service - market the service - accept money for the service - support the service and a little later, talk to a pro about taxes.
- TeMPOraL 5y ago
  No, you won't. Most of these jobs are consequences of scale, and exist to support it. For example, you don't need any of the management jobs until you've hired enough people that you have to manage them. You don't need to do sales and customer management jobs when you have no sales and no customers. Etc. Of the job titles that remain, these are all specializations. The projection of the work that you'll be doing onto any of the roles will be so small, that there's no point in even identifying it. E.g. you're not really doing "Dev Ops/Infra" if your project is running on a single server in whichever cloud you had the most free credits for. For a indie one-person SaaS, this list is useful only as an identification of broad areas of concern. I wouldn't even try to read anything from relative number of any type of positions - jobs don't scale at the same rate. E.g. sales workload may grow faster than dev workload in B2C, the opposite in B2B.
- brianwawok 5y ago
  I think the days of being a 1 man show are easier compared current world of ~12 person team. Communication is instant. Next time may just stay a 1-man show, tempeting for sure.
  - rhizome 5y ago
    I think there's room for (i.e. I think I'd read) an IndieHackers type site that focuses on one-man armies! Like IH has done in the past couple years you'd probably have to expand it, but even including <5ppl companies might still place a lot of success stories within arm's reach of OMA ambitions.
catillac 5y ago
What does this look pike for an org that is primarily providing SaaS products via ML? i.e. how much to r&d, model dev, data cleaning, etc.
- hectormalot 5y ago
  I suppose it is similar, but you’ll likely need more people per client to make it work. In my experience SaaS software is much easier to scale than SaaS ML. (See also: https://a16z.com/2020/02/16/the-new-business-of-ai-and-how-its-different-from-traditional-software/ https://a16z.com/2020/02/16/the-new-business-of-ai-and-how-i... ) On the ML side you probably have more people working on data gathering/cleaning/client specific tweaks than actual modeling. (Practically, I’d say is 80%-20% at best in the projects we do at work).
  - catillac 5y ago
    How much time realistically can go into client agnostic work versus client specific work?
TenJack 5y ago
So only two back end devs for 50 person series A?
keewee7 5y ago
Is it typical for a 50 employee SaaS organization to only have 2 backend developers?
- burlesona 5y ago
  Not in my experience. But it varies a lot depending on the product.
spoonjim 5y ago
I know this guy has a track record but not sure why you’d only have 12 engineers and 5 PMs in a 50 person company. Do you really need the Finance stuff? Why not just engineering and sales?
- brianwawok 5y ago
  I don’t think you can ignore stuff like marketing at 50 person scale. But I assume you can wiggle some of the team sizes, especially if you outsource some roles that aren’t your core business.
k__ 5y ago
"You need to hire rapidly to seize the opportunity." What does this mean? I had the impression employees are a liability.
cm2012 5y ago
So, most people reading this aren't looking for the marketing section. But I wanted to point something out I see all the time. Take a look at the roles under CMO at a 125 person company: -- CMO (15) Director, Product Marketing, plus 3 PMMs (4) Director, Demand Gen, plus 3 marketers (4) Director, Sales Enablement, plus 2 marketers (3) Director, Brand Marketing (3) PR & Analyst Relations (1-2) Events/Community (1) -- What I posit is that Product Marketing is useless as a position and should be eliminated most of the time. The role ends up being: - Jane Doe is the Product Marketer for product X. She's responsible for growing it as much as possible. - She works with Anne X. in demand gen to make ads to promote the product to new customers. - She works with Hillary Y. in email marketing to cross promote to existing customers - She works with tech to do landing page/funnel testing. However what I find is that the role just adds friction and useless tests to show value. Let the subject matter experts (in demand gen, email, website testing) create the plan for each product holistically. Product Marketers are dead weight 80% of the time. I would only say this anonymously but its true. Source: I'm a marketing consultant that has worked with dozens of fast growing SaaS companies.
- kchl 5y ago
  I see in your profile that you focus on Facebook and Google ads. If this is your context for product marketing, it’s totally understandable to see them as dead weight. If you’re meeting with B2B product marketers for paid display ads, you’re already dealing with a dysfunctional marketing org (perhaps part of why they brought you in as a consultant!). In an ideal world, demand gen and content already have messaging guidance, target segments and titles and their pain points from product marketing (and field marketing for regional guidance), and can just run with it except for perhaps a once over from product marketing on some initial copy for accuracy or tone. Otherwise, product marketing has their hands full researching customers along side PMs, writing more specialized content that’s harder to outsource, or building and delivering sales enablement. Essentially, they’re making sure you’re targeting the right folks at the right time, prepping sales dev to receive those folks, and working with sales on scalable motions to close them. There’s no reason product marketing should be weighing in on the nuances of how demand gen is being executed. Short version: there’s lots of facets to marketing, a good org keeps people focused where they’re needed based on their expertise.
alberth 5y ago
It should be noted this was authored by David Sacks, of PayPal/Yammer/etc fame.
H8crilA 5y ago
It's so funny when a CEO or a CTO or a VP has 20-50 people reporting to him/her :). This is barely getting outside of the "manager" rank in a proper corporation.
- ahtihn 5y ago
  Anyone who has more than 20 direct reports isn't managing them properly. I'd say 15 is already on the high side. I'd be very surprised if a CEO at any large company has more than 50 direct reports.
  - richardwhiuk 5y ago
    Parent comment is taking about total reports including indirect
    - H8crilA 5y ago
      Yes. Not to mention that a director or a VP role has usually rather little to do with managing specific people directly, it's more about setting the culture, approving specific decisions and occasional big organizational re-wirings.
ndr 5y ago
No one ever needs legal? No one doing privacy & compliance work in-house for a SaaS with hundreds of employees?
- Silhouette 5y ago
  Perhaps even lawyers don't want to deal with that many buzzwords and contrived management positions? Though the final scenario with hundreds of employees does feature a General Counsel as the final entry in the chart.
- NiceWayToDoIT 5y ago
  I don't get this either, even with 50 you would have a someone with corporate law experience and 400 ?! What am I missing, is one of the top management people at the same time lawyer, or they are on case paid bases?
- uncertainrhymes 5y ago
  Let's be generous and assume they outsource this -- which is a huge mistake. Your contracts are going to be an enormous pain, or if you use the paper from your customers you will be at a disadvantage. Have a sharp general counsel _early_. If you want real (i.e. enterprise) customers you will get destroyed if you agree to their terms for SLAs and penalties.
jwr 5y ago
This is so fun to read as the solo founder (and the only employee) of a self-funded (bootstrapped) SaaS business :-)
- fighterpilot 5y ago
  Any good learning material you can point me towards that you found useful on your journey? I'd appreciate anything.
  - jwr 5y ago
    I don't think I have anything particularly outstanding to share — for the most part, I believe common sense gets you really, really far. In fact, many choices I make go against the "common wisdom" and advice from the gurus, but I'm very happy with the results I'm getting. There is only one fundamental truth: you need a good product that people are willing to pay for. Everything else is optional — you can get by and run a successful business without marketing, without mailings and mailing lists, without A/B testing, without AWS, without Kubernetes, but you cannot run a successful business without a good product that people are willing to pay for. Anyway, the advice in the article might actually be good for large venture-funded SaaS businesses. I didn't mean to mock it, I just found it amusing how different my viewpoint is.
daigoba66 5y ago
Can some explain to me what 25-50+ engineers do all day at these startups? My experience is probably skewed, mostly working for SaaS companies providing enterprise B2B software, but the product and engineering team represents only 15-20% of the headcount - the customer success team is often 2-3x larger.
- abcdememomi 5y ago
  They will spend time overengineering things because they will get bored due to lack of meaningful work required from them, or have 7 hours per day of meetings
- zug_zug 5y ago
  In my experience at SAAS companies, one or two teams alone are responsible for "This huge integration that's gonna change everything I swear! Trust us Yahoo JAPAN is BIG" I've also usually noticed a lot of inefficiency on the dev-side too (bike-shedding, over-engineering, rewrites).
JaggerFoo 5y ago
I would of liked to see series X funding ranges and period ranges along with the charts to make more sense of the org charts.
jot 5y ago
I’m not cut out for VC track businesses. - $25K ARR per person with >40 employees. - $50K ARR per person with >100 employees. - $100K ARR per person with >1,000 employees. There are plenty of independent SaaS businesses that make it past $200K ARR per person with teams of <10.
- deleted 5y ago
  [deleted]
- SOLAR_FIELDS 5y ago
  Well, when we consider that VC funding is usually trending towards a model of hyper growth, it becomes fairly straightforward to see that the model leans towards throwing people at the problem to make it grow faster. I do think it would be interesting to see a study comparing growth rates of companies comparing to number of employees as (educated guess here) operating with that many employees that quickly is going to result in a number of inefficiencies.
  - deleted 5y ago
    [deleted]
  - rhizome 5y ago
    I wonder if "VC funding" lives in a space between old-style business development and hierarchy, vs. new-style revenue expectations. We get middle-heavy startups (backbiting optional) trying to cover zillion dollar AWS bills by perpetually pretending they're on the verge of a Google-up. This is why they need $50MM rather than 1/10th that.
- PragmaticPulp 5y ago
  > There are plenty of independent SaaS businesses that make it past $200K ARR per person with teams of <10 Which is great for companies aiming to stay small and self-bootstrapped. There's nothing wrong with this model for founders who want to stay independent. The VC alternative allows companies to grow faster than organic revenue growth might allow. It can take a long time for a 10-person company with $2mm ARR to grow to $2.2mm ARR so they can hire the next person they need. Alternatively, they can take VC money and hire the next 100 people they need without waiting for revenue to get there first. One model isn't inherently better than the other. The important thing is for founders to decide which type of company they want to be and stick to it. A founder who wants to grow organically is going to have a bad time if they take money from investors who want growth. A founder who wants to grow as fast as possible is going to have a bad time if they're constantly stuck waiting for organic growth to let them make the next hire.
abcdememomi 5y ago
These “blueprint” charts are so harmful. People that doesn’t understand what some position even are trust this kind of things and hire a lot of people for the sake of it. Measuring growth in headcount is disfunctional and just bad. I’ve seen many of startups hiring tens on engineers because they can, and to show “growth” to the outside world, not because they added any value
rasengan 5y ago
This is an example of how to cargo cult.
deanCommie 5y ago
This is silly. Of course I understand that because of scaling a 50-person org will have one "technical leader" who is, by definition, the CTO, and they might only have 12 reports. But you don't now need to introduce additional abstractions when you go from 50 to 125. Why introduce a VP of engineering? Can the CTO not handle 3 extra director reports (4 if you add a "director" of QA with 2 reports?) Come on. Who is going to come on to be the "VP of engineering" for a startup, yet not have/want oversight for Security, Analytics, and Infrastructure? Also in the 50 person startup, the product lead with 5 reports is a "Director" but a product lead with 11 reports is a "VP"? Get outta here, this is silly. It's the exact same role. It is NOT more scope or oversight. There should be orders of magnitude size growths before you start overthinking the difference between a director and a VP, or introducing new layers.
- formatjam 5y ago
  Maybe? "technical leader" for a 0-50 org is VERY different job than >100 org. The CTO is probably very good at 0-1 type of start up work, and probably a cofounder and inexperienced eng leader. But a experienced VP of eng is required to build teams and process later on. But usually those VP of eng are not good at building startups from the ground up. So the solution here is either: - fire the CTO co-founder and replace them with a VP of eng type of talents - hire VP of eng and let the cofounder CTO focus on other works I have seen both happened before.
  - deanCommie 5y ago
    I feel like you came to the same conclusion as me - you don't need both the CTO and a VP of Eng if the technical org is 40 people.
    - lmeyerov 5y ago
      both? - tech manager != tech leader, different skills - CTO is like a Chief Science Officer at a biotech or seniormost Principal/Fellow Engineer at a bigger tech co: ~No boss and ~no reports. The more boring the core tech & scale, the less important to have. - VP.E might do more on internal people processes, like run overall technical recruiting, while CTO stays involved like helping close candidates & joins bigger sales calls, but is overall more peripheral to the people management. They are not fully removed -- they might focus more on say code culture due to being an experienced technologist & deeply familiar with the core code. - Both VP.E & CTO might say fix little bugs to make sure code culture is sane and help add productivity tools to the stack, but CTO will more likely run major arch advances & new system prototypes, while VP.E will help trains run on time by seeing ahead around coordination issues. Both need to be leaders (consensus building, ...), but one leads the company's technology and reads deeply on technology, and the other, its technologists, and reads deeply on management. Lacking a good VP.E. leads to inability to ship: cannot execute tactically. Lacking a good CTO leads to a stagnant technology org: cannot execute strategically. I suspect this changes at bigger scales, where my cynical side suspects, at most orgs, corp dev (M&A) > Office of CTO for technical leadership :(
smoldesu 5y ago
It scares me to think that there's some capital-backed, likely nervous 20-something, reading this on their iPhone with shaky hands before screenshotting it and shipping it off to Glassdoor. Your company should be so much more than this, even an example that you find online for guidance. Cargo-cult leadership might be the demise of the modern SaaS/VC workflow.
exdsq 5y ago
Is this actually based on anything?
- davidivadavid 5y ago
  https://en.wikipedia.org/wiki/David_O._Sacks https://en.wikipedia.org/wiki/David_O._Sacks
devops000 5y ago
$20-$100,000 of ARR per employee means profits < 0 until IPO. Does it make sense?
IgorPartola 5y ago
I fully expected this to be satire. Surely this is all subject to change based on the backgrounds of founders and early employees, industry, funding goals and sources, etc.
zilchers 5y ago
The terminology around seed vs a vs b is so skewed right now, but a 50 person series a startup, just estimating, is a 5 mil per year burn. Hard to say exactly the raise, but personally I’d be uncomfortable with less than 3 years runway, so let’s call it a 12mil raise. 12 mil raise for 25% of the company (again, totally back of the napkin here) puts us at basically 50mil valuation. 50 mil valuation on 1mil ARR seems way high to me, basically this all seems sort of shifted left on the headcount side (series b should be 50 people) and right on the revenue side.
- ZephyrBlu 5y ago
  I feel like 3 years of runway is actually quite a lot if you're gunning for extremely fast growth. I think you would have raised a Series B well within 3 years if you're growing as expected.
deleted 5y ago
[deleted]
whall6 5y ago
I think this is stupid. Building a business shouldn’t be about hiring people to fit some platonic form of a company. You should hire people based on a market need for that role. While I agree that this is the org chart that most often organically arises, it’s not because CEOs read this article on sub stack. This is about as useful of information as telling me how to decorate my office space when I have a 50 person company.
- zug_zug 5y ago
  Agreed. It feels very "one-size-fits-all" in a technical landscape that is constantly changing. Some products are exponentially more backend-focused (twilio), some exponentially more frontend-focused (salesforce?). I don't know enough about other departments to say for sure if these are universally valid numbers, but I doubt it. Definitely worked for enough C-level people who said "We now need a 6-person data team in our startup because my friend Bob said so, and he's a big deal" or whatever the trend of the day was, to find such prescriptive templates questionable at best and dangerous at worst.
dgudkov 5y ago
>At IPO (average) $100,000 of ARR per employee So it's for companies that aren't profitable even at IPO. Not my cup of tea.
- bbrree66 5y ago
  Unicorn or bust! It's ridiculous.
rokkit 5y ago
Why do the number of front end devs exceed the back end? Does anyone else see a problem here? Front end effort has always been a fraction of back end effort on the systems I've developed. If that's not the case, I can only hypothesize it's because front end toolchains have gotten overly complex for what they accomplish. Not only that, but I would posit that for most SaaS ventures, the back end is where the differentiation and value is delivered, so that is where the bulk of dev resources should be deployed.
- granshaw 5y ago
  The standard of polish that users expect has gone up a lot. The Front end is what users actually interact with, to them it might as well be your entire stack
- matteovh 5y ago
  Backend dev has basically become CRUD API development whereas products end up being differentiated by brand and UX polish.
- gedy 5y ago
  Of the consumer/Enterprise SaaS companies I've worked with, many devs who say they are doing "backend" are just writing controllers and APIs specifically for front end/UI consumption. A lot of places have combined that work into same stack/JS and call it "frontend".
- dzonga 5y ago
  yeah, as someone who has worked on both ends of the stack, that was confusing as hell. if you only need backend dev's on a 1:2 ratio with frontend, then your product ain't complex to begin with to warrant a separate frontend team. but then having vc money contributes to decisions most of us, will never understand.
- devmunchies 5y ago
  at a startup with less than 50 people, the frontend engineers will typically manage "frontend services", which includes the backend that directly serves the frontend. basically full stack, which was't included.
synergy20 5y ago
very insightful, would like a version for before-round-A startups. By the point when you got round-A, you have already passed the most difficult time for a startup: to survive from bootstrap or angel-fund to round-A. the key is actually how to get angel-fund or bootstrap so you can reach to round-A, instead of being those 95% failed to launch ones and never saw the light.
motohagiography 5y ago
Gem of an article. Question/opinion though: The CEO seems to manage the CPO & CTO relationship in these models as well, which seems like a risk given a CEO's value is investor and market / key customer facing, and any time they spend on managing the peers in the CPO/CTO relationship is opportunity cost against that value. It also means the CPO & CTO as peers will be jockying for the CEO's attention as a deciding factor, which seems like unnecessary friction. The CPO's key relationships are to the board and supporting the CEO activities and sales key accounts with strategic feature alignment that may include M&A. The CTO's key relationships are outward with technology partners, suppliers, vendors, etc. and downward in the org. A CTO should be a partnership with a COO role, as they are solving scale and optimization problems together. All that is to say, depending on org maturity, I don't think CTO/CPO should be peers under the CEO. IMO one of the CPO/CTO should report to the other, as otherwise you're going to get unproductive running battles between them that cost CEO time. If you have this model and are wondering why your staff aren't working well together, it's you. This is why it can be useful to keep a founder around as a facilitator with convening power, provided they aren't too marginalized or a loose cannon. That said, I've only consulted to orgs like this and see it across them, and this is not the view of a CEO.
- joaofs 5y ago
  You are on the money here. I guess who reports to whom depends if it's a tech company or not.
- kalms 5y ago
  I actually don't disagree with you on this. Can absolutely see how this can create friction, but it's also one of those cases when dealing in absolutes is fraught with peril. A CTO is not a CPO and having strategies being defined - or steered by a singularly technically-minded person can work fine in a lot of scenarios, but for others, it's important to foster a certain level of autonomy for managing, growing and building the product, feature set and roadmap. Same thing in reverse. There's definitely overlap between the two, but a collaborative approach works better in my opinion. As a disclaimer, I'm a CPO myself - and enjoy the working relationship and collaboration with the CTO, while reporting directly to the CEO and the board. Also, I guess that sometimes it really comes down to the types of personalities that are present in the management team - as well as the type of product being built.
robertwt7 5y ago
I always thought that in SAAS company at least 50% should be in the engineering, instead, out of 50, only 12 (25%) is in the engineering.. Not sure if this is the correct rule of thumb, but one day from Software Engineering I might want to move into management or have my own startup and this would help.
- paxys 5y ago
  It depends on the product, but most SaaS companies in this space aren't doing a lot of breakthrough engineering. 9/10 of them have a shiny UI, basic CRUD on the backend (with large chunks outsourced to AWS and other managed infra services), and an army of marketing and sales people to push it onto large enterprises.
PLenz 5y ago
Perhaps because I only work at companies where the data is the product but I have a hard time imagining a company without a Data Science Department reporting into the CEO
PragmaticPulp 5y ago
This is a good rough outline. As the author says, it's not meant to be a perfect target that fits every company. Adjust accordingly. I like how he limits the number of C-level titles in the early stages to just a CEO and CTO. It's a common mistake for startup founders to hand out too many C-level titles to their cofounders and early hires. This causes problems when the company outgrows some (or most) of those people. If you need to bring in a more experienced CMO, CRO, CSO, or other C-level, your only options are to demote the existing C-level and replace them with a new boss or to arrange their exit from the company. Neither are good looks, and neither make people happy. Much better to start with Director and VP level titles in the early days. You can either bring in a C-level above them when the time is right, or promote them to C-level if they grow into the role. That said, most SaaS I've worked with would want more people on backend/devops at the earl stages. Having 3 people total handle combined devops and backend development is a big risk, especially if any of them want to go on vacation or leave for other jobs. Downtime and server outages are not a good look for a growing SaaS, so don't skimp on people who can keep it up and running.
intricatedetail 5y ago
20% of people generating 80% of value while getting paid a fraction.
gijoeyguerra 5y ago
Please do something different.
ericls 5y ago
I don't like separating Front End and Back End on people. I like the separation on architecture.
ibains 5y ago
I assume SaaS=SaaS-App like iPhone App. Because you can also build serious technology as SaaS.
hcarvalhoalves 5y ago
A less than 1:4 ratio of tech positions, 2 backend developers on a supposedly 50-employee SaaS company is ridiculous and shows how startups burnout tech employees.
alexbrower 5y ago
Understanding fully that this is meant to serve just as a reference, this type of article risks positioning hiring as an end — not as a means to an end. Better to take external advice on typical team sizes / talent needed to achieve specific milestones specific to your business. Hire to get meaningful work done. Not based on a funding-centric "target" org chart.

385 points by anacleto 5y ago

I know it’s close to the truth, but it still feels weird that this hypothetical 50 FTE SaaS company has 2x the amount of sales/CSM folks vs technical profile. And that the whole product is in the hands of 6 devs (4x FE and 2x BE).

ivraatiems 5y ago
It's often a much bigger lift to get people to adopt your product than it is to make the product itself, especially now when so many SaaS markets are either captured by large players or, conversely, hypercompetitive.
jcims 5y ago
I used to think that as well, but sales doesnt scale like engineering, and their priorities provide a good counterbalance to engineering and even product priorities. The thing that I thought was broken about it is the bread first strategy. I would think it would be better to focus on a segment of the market until they start getting momentum. Many products we see that are targeted at smaller companies are going to be wholly unacceptable to large enterprises.
- jcims 5y ago
  bread -> broad
feoren 5y ago
Yes, this is crazy to me. In a company of 50 people, six are working on the actual product!? What are all these directors of such-and-such doing all day?

ivraatiems 5y ago

It's really interesting how AAR scales per employee. The larger you are, better the ratio -- this helps explain why large companies can afford to pay so much more for top-level employees than small ones. I'm sure this seems obvious to some, but I'm not enough of a business/finance person to have really thought about this before. It helps crystallize some dynamics between, for example, my current employer and my immediately former employer; the former is able to pay dramatically more (around 150% on salary, plus equity) for essentially the same work, and gets more and higher quality talent as a result. I wonder how a smaller org can escape this problem, if at all.

ec109685 5y ago
A growing company doesn’t need to be profitable, so there’s no reason an engineer shouldn’t be compensated at market rate ever.
- ivraatiems 5y ago
  That might be true for startups, but my former employer is a 20+ year old established company with a specific niche. Growth is limited, but business is stable and profitable. It's a different mindset.
  - pm90 5y ago
    In that case it sounds like they have found product market fit and are mostly content with the way the business is growing and likely don’t need the kind of “top talent” that you offer. They’re ok with “mediocre talent” since talent isn’t enabling growth or survival. The market is pretty brutal but I’ve seen many extremely talented folks work at mediocre organizations because of reasons other than financial. I guess everyone is happy with the arrangement.
    - ivraatiems 5y ago
      You'd think and hope so. To be honest, I think they're trying to have their cake and eat it too - that's part of why I left. They wanted to grow and had all these strategies for doing so, but not nearly the resources to do it, and were unwilling to invest in getting more of them. We got a lot done with a little, but there were clear limitations. It was an outlook I never quite understood. The core business was and is strong, reliably profitable and has made plenty of people quite wealthy and employed dozens more gainfully. Why mess with that success? What's in it for them? What's the point of (fake numbers) $100m in sales vs $50m when it comes to our 70-person company and small number of private, non-institutional owners? But I am, of course, not the one who makes such decisions.
- Silhouette 5y ago
  A growing company with investors happy to throw away large amounts of money for years in case they end up with a unicorn doesn't need to be profitable. A growing company that was bootstrapped and is trying to make something actually worth selling in order to fund further growth is an entirely different situation.

thinkingkong 5y ago

Another way to think about this is ratios of budgets to departments, ratios of "core" vs "experimental" spend, and ratios of IC's to managers. If you map those constraints out for the system that you're building you can tailor things a little more to your business while making intelligent trade-offs.

ryanSrich 5y ago

Series A feels top heavy to me. Having a director or VP of Product at that point feels like a mistake. I also think you could do more delegating under the CTO. 12 reports is too much.

xondono 5y ago

Interesting examples, but starting at 50 employees sounds a little bit extreme to me. I also find way more insightful how you get from x founders to 50 employees than from then on.

monocasa 5y ago
Yeah, the only way this chart makes sense to me is as "what's your target for using your series X money" rather than "where you should be when you get your series X money".
paxys 5y ago
The company isn't starting with 50 employees on day 1. It's a guide for founders who have just raised series A-C.

julee04 5y ago

If anyone is interested in what a typical SaaS sales org chart looks like, here is a good example: https://www.saasae.com/levels https://www.saasae.com/levels

jxf 5y ago

Two remarks: * This feels way too hierarchical for the size -- there's significant distance from many employees and the CEO even at small sizes. * Could not disagree more with putting HR and Ops under the CFO (even in a 50-person company). That's a surefire way to have a neglected HR/people function.

burlesona 5y ago
At 50 people everyone is still within 1 skip-level of the CEO. That doesn’t seem overly hierarchical to me. What does seem a little surprising is how many “chiefs” the CEO has reporting to them. In my experience with companies around 50 people, things actually tend to not be sliced into so many pieces, but rather there are a few larger slices that are functionally heterogeneous.
- ryanSrich 5y ago
  I think the three machines approach works best for companies 0-100 people (depending on the company, for SaaS it makes sense). Basically have someone own: 1. The product - CTO 2. The customer - (Could be a director or VP of marketing/sales/rev) 3. The company - CEO Anything beyond those three execs at or around an A round is nuts to me. I think a lot of people underestimate just how much you can outsource at that size. There almost no reason to have a COO when you’re less than 100 people. Same with a CFO. Either of those hires don’t become strategic until you’re doing $10+m in rev. Until then, use other SaaS services for payroll, book keeping, tax savings (MainStreet), etc. These take little effort use and can be setup by one of the founders in less than a day.
  - paulddraper 5y ago
    You're proposing a 100 person SaaS company without any sales or marketing exec? This is HN I suppose, so not entirely surprising.
    - ryanSrich 5y ago
      It’s literally the second bullet point in my comment. Did you miss it?

haram_masala 5y ago

For those of us who want to start an indie one-person SaaS, this is sobering - because it means that for a while, you’ll be doing all 50 of these jobs. And, paid far less than any of them.

dsr_ 5y ago
Here's the good news: when it's just you, you don't need HR, because there are no interactions between employees, no hiring and no firing. Before you have any income, you barely need a CFO function, and so on and so forth. Really, you only have about five roles: - make the service - run the service - market the service - accept money for the service - support the service and a little later, talk to a pro about taxes.
TeMPOraL 5y ago
No, you won't. Most of these jobs are consequences of scale, and exist to support it. For example, you don't need any of the management jobs until you've hired enough people that you have to manage them. You don't need to do sales and customer management jobs when you have no sales and no customers. Etc. Of the job titles that remain, these are all specializations. The projection of the work that you'll be doing onto any of the roles will be so small, that there's no point in even identifying it. E.g. you're not really doing "Dev Ops/Infra" if your project is running on a single server in whichever cloud you had the most free credits for. For a indie one-person SaaS, this list is useful only as an identification of broad areas of concern. I wouldn't even try to read anything from relative number of any type of positions - jobs don't scale at the same rate. E.g. sales workload may grow faster than dev workload in B2C, the opposite in B2B.
brianwawok 5y ago
I think the days of being a 1 man show are easier compared current world of ~12 person team. Communication is instant. Next time may just stay a 1-man show, tempeting for sure.
- rhizome 5y ago
  I think there's room for (i.e. I think I'd read) an IndieHackers type site that focuses on one-man armies! Like IH has done in the past couple years you'd probably have to expand it, but even including <5ppl companies might still place a lot of success stories within arm's reach of OMA ambitions.

catillac 5y ago

What does this look pike for an org that is primarily providing SaaS products via ML? i.e. how much to r&d, model dev, data cleaning, etc.

hectormalot 5y ago
I suppose it is similar, but you’ll likely need more people per client to make it work. In my experience SaaS software is much easier to scale than SaaS ML. (See also: https://a16z.com/2020/02/16/the-new-business-of-ai-and-how-its-different-from-traditional-software/ https://a16z.com/2020/02/16/the-new-business-of-ai-and-how-i... ) On the ML side you probably have more people working on data gathering/cleaning/client specific tweaks than actual modeling. (Practically, I’d say is 80%-20% at best in the projects we do at work).
- catillac 5y ago
  How much time realistically can go into client agnostic work versus client specific work?

TenJack 5y ago

So only two back end devs for 50 person series A?

keewee7 5y ago

Is it typical for a 50 employee SaaS organization to only have 2 backend developers?

burlesona 5y ago
Not in my experience. But it varies a lot depending on the product.

spoonjim 5y ago

I know this guy has a track record but not sure why you’d only have 12 engineers and 5 PMs in a 50 person company. Do you really need the Finance stuff? Why not just engineering and sales?

brianwawok 5y ago
I don’t think you can ignore stuff like marketing at 50 person scale. But I assume you can wiggle some of the team sizes, especially if you outsource some roles that aren’t your core business.

k__ 5y ago

"You need to hire rapidly to seize the opportunity." What does this mean? I had the impression employees are a liability.

cm2012 5y ago

So, most people reading this aren't looking for the marketing section. But I wanted to point something out I see all the time. Take a look at the roles under CMO at a 125 person company: -- CMO (15) Director, Product Marketing, plus 3 PMMs (4) Director, Demand Gen, plus 3 marketers (4) Director, Sales Enablement, plus 2 marketers (3) Director, Brand Marketing (3) PR & Analyst Relations (1-2) Events/Community (1) -- What I posit is that Product Marketing is useless as a position and should be eliminated most of the time. The role ends up being: - Jane Doe is the Product Marketer for product X. She's responsible for growing it as much as possible. - She works with Anne X. in demand gen to make ads to promote the product to new customers. - She works with Hillary Y. in email marketing to cross promote to existing customers - She works with tech to do landing page/funnel testing. However what I find is that the role just adds friction and useless tests to show value. Let the subject matter experts (in demand gen, email, website testing) create the plan for each product holistically. Product Marketers are dead weight 80% of the time. I would only say this anonymously but its true. Source: I'm a marketing consultant that has worked with dozens of fast growing SaaS companies.

kchl 5y ago
I see in your profile that you focus on Facebook and Google ads. If this is your context for product marketing, it’s totally understandable to see them as dead weight. If you’re meeting with B2B product marketers for paid display ads, you’re already dealing with a dysfunctional marketing org (perhaps part of why they brought you in as a consultant!). In an ideal world, demand gen and content already have messaging guidance, target segments and titles and their pain points from product marketing (and field marketing for regional guidance), and can just run with it except for perhaps a once over from product marketing on some initial copy for accuracy or tone. Otherwise, product marketing has their hands full researching customers along side PMs, writing more specialized content that’s harder to outsource, or building and delivering sales enablement. Essentially, they’re making sure you’re targeting the right folks at the right time, prepping sales dev to receive those folks, and working with sales on scalable motions to close them. There’s no reason product marketing should be weighing in on the nuances of how demand gen is being executed. Short version: there’s lots of facets to marketing, a good org keeps people focused where they’re needed based on their expertise.

alberth 5y ago

It should be noted this was authored by David Sacks, of PayPal/Yammer/etc fame.

H8crilA 5y ago

It's so funny when a CEO or a CTO or a VP has 20-50 people reporting to him/her :). This is barely getting outside of the "manager" rank in a proper corporation.

ahtihn 5y ago
Anyone who has more than 20 direct reports isn't managing them properly. I'd say 15 is already on the high side. I'd be very surprised if a CEO at any large company has more than 50 direct reports.
- richardwhiuk 5y ago
  Parent comment is taking about total reports including indirect
  - H8crilA 5y ago
    Yes. Not to mention that a director or a VP role has usually rather little to do with managing specific people directly, it's more about setting the culture, approving specific decisions and occasional big organizational re-wirings.

ndr 5y ago

No one ever needs legal? No one doing privacy & compliance work in-house for a SaaS with hundreds of employees?

Silhouette 5y ago
Perhaps even lawyers don't want to deal with that many buzzwords and contrived management positions? Though the final scenario with hundreds of employees does feature a General Counsel as the final entry in the chart.
NiceWayToDoIT 5y ago
I don't get this either, even with 50 you would have a someone with corporate law experience and 400 ?! What am I missing, is one of the top management people at the same time lawyer, or they are on case paid bases?
uncertainrhymes 5y ago
Let's be generous and assume they outsource this -- which is a huge mistake. Your contracts are going to be an enormous pain, or if you use the paper from your customers you will be at a disadvantage. Have a sharp general counsel _early_. If you want real (i.e. enterprise) customers you will get destroyed if you agree to their terms for SLAs and penalties.

jwr 5y ago

This is so fun to read as the solo founder (and the only employee) of a self-funded (bootstrapped) SaaS business :-)

fighterpilot 5y ago
Any good learning material you can point me towards that you found useful on your journey? I'd appreciate anything.
- jwr 5y ago
  I don't think I have anything particularly outstanding to share — for the most part, I believe common sense gets you really, really far. In fact, many choices I make go against the "common wisdom" and advice from the gurus, but I'm very happy with the results I'm getting. There is only one fundamental truth: you need a good product that people are willing to pay for. Everything else is optional — you can get by and run a successful business without marketing, without mailings and mailing lists, without A/B testing, without AWS, without Kubernetes, but you cannot run a successful business without a good product that people are willing to pay for. Anyway, the advice in the article might actually be good for large venture-funded SaaS businesses. I didn't mean to mock it, I just found it amusing how different my viewpoint is.

daigoba66 5y ago

Can some explain to me what 25-50+ engineers do all day at these startups? My experience is probably skewed, mostly working for SaaS companies providing enterprise B2B software, but the product and engineering team represents only 15-20% of the headcount - the customer success team is often 2-3x larger.

abcdememomi 5y ago
They will spend time overengineering things because they will get bored due to lack of meaningful work required from them, or have 7 hours per day of meetings
zug_zug 5y ago
In my experience at SAAS companies, one or two teams alone are responsible for "This huge integration that's gonna change everything I swear! Trust us Yahoo JAPAN is BIG" I've also usually noticed a lot of inefficiency on the dev-side too (bike-shedding, over-engineering, rewrites).

JaggerFoo 5y ago

I would of liked to see series X funding ranges and period ranges along with the charts to make more sense of the org charts.

jot 5y ago

I’m not cut out for VC track businesses. - $25K ARR per person with >40 employees. - $50K ARR per person with >100 employees. - $100K ARR per person with >1,000 employees. There are plenty of independent SaaS businesses that make it past $200K ARR per person with teams of <10.

deleted 5y ago
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SOLAR_FIELDS 5y ago
Well, when we consider that VC funding is usually trending towards a model of hyper growth, it becomes fairly straightforward to see that the model leans towards throwing people at the problem to make it grow faster. I do think it would be interesting to see a study comparing growth rates of companies comparing to number of employees as (educated guess here) operating with that many employees that quickly is going to result in a number of inefficiencies.
- deleted 5y ago
  [deleted]
- rhizome 5y ago
  I wonder if "VC funding" lives in a space between old-style business development and hierarchy, vs. new-style revenue expectations. We get middle-heavy startups (backbiting optional) trying to cover zillion dollar AWS bills by perpetually pretending they're on the verge of a Google-up. This is why they need $50MM rather than 1/10th that.
PragmaticPulp 5y ago
> There are plenty of independent SaaS businesses that make it past $200K ARR per person with teams of <10 Which is great for companies aiming to stay small and self-bootstrapped. There's nothing wrong with this model for founders who want to stay independent. The VC alternative allows companies to grow faster than organic revenue growth might allow. It can take a long time for a 10-person company with $2mm ARR to grow to $2.2mm ARR so they can hire the next person they need. Alternatively, they can take VC money and hire the next 100 people they need without waiting for revenue to get there first. One model isn't inherently better than the other. The important thing is for founders to decide which type of company they want to be and stick to it. A founder who wants to grow organically is going to have a bad time if they take money from investors who want growth. A founder who wants to grow as fast as possible is going to have a bad time if they're constantly stuck waiting for organic growth to let them make the next hire.

abcdememomi 5y ago

These “blueprint” charts are so harmful. People that doesn’t understand what some position even are trust this kind of things and hire a lot of people for the sake of it. Measuring growth in headcount is disfunctional and just bad. I’ve seen many of startups hiring tens on engineers because they can, and to show “growth” to the outside world, not because they added any value

rasengan 5y ago

This is an example of how to cargo cult.

deanCommie 5y ago

This is silly. Of course I understand that because of scaling a 50-person org will have one "technical leader" who is, by definition, the CTO, and they might only have 12 reports. But you don't now need to introduce additional abstractions when you go from 50 to 125. Why introduce a VP of engineering? Can the CTO not handle 3 extra director reports (4 if you add a "director" of QA with 2 reports?) Come on. Who is going to come on to be the "VP of engineering" for a startup, yet not have/want oversight for Security, Analytics, and Infrastructure? Also in the 50 person startup, the product lead with 5 reports is a "Director" but a product lead with 11 reports is a "VP"? Get outta here, this is silly. It's the exact same role. It is NOT more scope or oversight. There should be orders of magnitude size growths before you start overthinking the difference between a director and a VP, or introducing new layers.

formatjam 5y ago
Maybe? "technical leader" for a 0-50 org is VERY different job than >100 org. The CTO is probably very good at 0-1 type of start up work, and probably a cofounder and inexperienced eng leader. But a experienced VP of eng is required to build teams and process later on. But usually those VP of eng are not good at building startups from the ground up. So the solution here is either: - fire the CTO co-founder and replace them with a VP of eng type of talents - hire VP of eng and let the cofounder CTO focus on other works I have seen both happened before.
- deanCommie 5y ago
  I feel like you came to the same conclusion as me - you don't need both the CTO and a VP of Eng if the technical org is 40 people.
  - lmeyerov 5y ago
    both? - tech manager != tech leader, different skills - CTO is like a Chief Science Officer at a biotech or seniormost Principal/Fellow Engineer at a bigger tech co: ~No boss and ~no reports. The more boring the core tech & scale, the less important to have. - VP.E might do more on internal people processes, like run overall technical recruiting, while CTO stays involved like helping close candidates & joins bigger sales calls, but is overall more peripheral to the people management. They are not fully removed -- they might focus more on say code culture due to being an experienced technologist & deeply familiar with the core code. - Both VP.E & CTO might say fix little bugs to make sure code culture is sane and help add productivity tools to the stack, but CTO will more likely run major arch advances & new system prototypes, while VP.E will help trains run on time by seeing ahead around coordination issues. Both need to be leaders (consensus building, ...), but one leads the company's technology and reads deeply on technology, and the other, its technologists, and reads deeply on management. Lacking a good VP.E. leads to inability to ship: cannot execute tactically. Lacking a good CTO leads to a stagnant technology org: cannot execute strategically. I suspect this changes at bigger scales, where my cynical side suspects, at most orgs, corp dev (M&A) > Office of CTO for technical leadership :(

smoldesu 5y ago

It scares me to think that there's some capital-backed, likely nervous 20-something, reading this on their iPhone with shaky hands before screenshotting it and shipping it off to Glassdoor. Your company should be so much more than this, even an example that you find online for guidance. Cargo-cult leadership might be the demise of the modern SaaS/VC workflow.

exdsq 5y ago

Is this actually based on anything?

davidivadavid 5y ago
https://en.wikipedia.org/wiki/David_O._Sacks https://en.wikipedia.org/wiki/David_O._Sacks

devops000 5y ago

$20-$100,000 of ARR per employee means profits < 0 until IPO. Does it make sense?

IgorPartola 5y ago

I fully expected this to be satire. Surely this is all subject to change based on the backgrounds of founders and early employees, industry, funding goals and sources, etc.

zilchers 5y ago

The terminology around seed vs a vs b is so skewed right now, but a 50 person series a startup, just estimating, is a 5 mil per year burn. Hard to say exactly the raise, but personally I’d be uncomfortable with less than 3 years runway, so let’s call it a 12mil raise. 12 mil raise for 25% of the company (again, totally back of the napkin here) puts us at basically 50mil valuation. 50 mil valuation on 1mil ARR seems way high to me, basically this all seems sort of shifted left on the headcount side (series b should be 50 people) and right on the revenue side.

ZephyrBlu 5y ago
I feel like 3 years of runway is actually quite a lot if you're gunning for extremely fast growth. I think you would have raised a Series B well within 3 years if you're growing as expected.

deleted 5y ago

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whall6 5y ago

I think this is stupid. Building a business shouldn’t be about hiring people to fit some platonic form of a company. You should hire people based on a market need for that role. While I agree that this is the org chart that most often organically arises, it’s not because CEOs read this article on sub stack. This is about as useful of information as telling me how to decorate my office space when I have a 50 person company.

zug_zug 5y ago
Agreed. It feels very "one-size-fits-all" in a technical landscape that is constantly changing. Some products are exponentially more backend-focused (twilio), some exponentially more frontend-focused (salesforce?). I don't know enough about other departments to say for sure if these are universally valid numbers, but I doubt it. Definitely worked for enough C-level people who said "We now need a 6-person data team in our startup because my friend Bob said so, and he's a big deal" or whatever the trend of the day was, to find such prescriptive templates questionable at best and dangerous at worst.

dgudkov 5y ago

>At IPO (average) $100,000 of ARR per employee So it's for companies that aren't profitable even at IPO. Not my cup of tea.

bbrree66 5y ago
Unicorn or bust! It's ridiculous.

rokkit 5y ago

Why do the number of front end devs exceed the back end? Does anyone else see a problem here? Front end effort has always been a fraction of back end effort on the systems I've developed. If that's not the case, I can only hypothesize it's because front end toolchains have gotten overly complex for what they accomplish. Not only that, but I would posit that for most SaaS ventures, the back end is where the differentiation and value is delivered, so that is where the bulk of dev resources should be deployed.

granshaw 5y ago
The standard of polish that users expect has gone up a lot. The Front end is what users actually interact with, to them it might as well be your entire stack
matteovh 5y ago
Backend dev has basically become CRUD API development whereas products end up being differentiated by brand and UX polish.
gedy 5y ago
Of the consumer/Enterprise SaaS companies I've worked with, many devs who say they are doing "backend" are just writing controllers and APIs specifically for front end/UI consumption. A lot of places have combined that work into same stack/JS and call it "frontend".
dzonga 5y ago
yeah, as someone who has worked on both ends of the stack, that was confusing as hell. if you only need backend dev's on a 1:2 ratio with frontend, then your product ain't complex to begin with to warrant a separate frontend team. but then having vc money contributes to decisions most of us, will never understand.
devmunchies 5y ago
at a startup with less than 50 people, the frontend engineers will typically manage "frontend services", which includes the backend that directly serves the frontend. basically full stack, which was't included.

synergy20 5y ago

very insightful, would like a version for before-round-A startups. By the point when you got round-A, you have already passed the most difficult time for a startup: to survive from bootstrap or angel-fund to round-A. the key is actually how to get angel-fund or bootstrap so you can reach to round-A, instead of being those 95% failed to launch ones and never saw the light.

motohagiography 5y ago

Gem of an article. Question/opinion though: The CEO seems to manage the CPO & CTO relationship in these models as well, which seems like a risk given a CEO's value is investor and market / key customer facing, and any time they spend on managing the peers in the CPO/CTO relationship is opportunity cost against that value. It also means the CPO & CTO as peers will be jockying for the CEO's attention as a deciding factor, which seems like unnecessary friction. The CPO's key relationships are to the board and supporting the CEO activities and sales key accounts with strategic feature alignment that may include M&A. The CTO's key relationships are outward with technology partners, suppliers, vendors, etc. and downward in the org. A CTO should be a partnership with a COO role, as they are solving scale and optimization problems together. All that is to say, depending on org maturity, I don't think CTO/CPO should be peers under the CEO. IMO one of the CPO/CTO should report to the other, as otherwise you're going to get unproductive running battles between them that cost CEO time. If you have this model and are wondering why your staff aren't working well together, it's you. This is why it can be useful to keep a founder around as a facilitator with convening power, provided they aren't too marginalized or a loose cannon. That said, I've only consulted to orgs like this and see it across them, and this is not the view of a CEO.

joaofs 5y ago
You are on the money here. I guess who reports to whom depends if it's a tech company or not.
kalms 5y ago
I actually don't disagree with you on this. Can absolutely see how this can create friction, but it's also one of those cases when dealing in absolutes is fraught with peril. A CTO is not a CPO and having strategies being defined - or steered by a singularly technically-minded person can work fine in a lot of scenarios, but for others, it's important to foster a certain level of autonomy for managing, growing and building the product, feature set and roadmap. Same thing in reverse. There's definitely overlap between the two, but a collaborative approach works better in my opinion. As a disclaimer, I'm a CPO myself - and enjoy the working relationship and collaboration with the CTO, while reporting directly to the CEO and the board. Also, I guess that sometimes it really comes down to the types of personalities that are present in the management team - as well as the type of product being built.

robertwt7 5y ago

I always thought that in SAAS company at least 50% should be in the engineering, instead, out of 50, only 12 (25%) is in the engineering.. Not sure if this is the correct rule of thumb, but one day from Software Engineering I might want to move into management or have my own startup and this would help.

paxys 5y ago
It depends on the product, but most SaaS companies in this space aren't doing a lot of breakthrough engineering. 9/10 of them have a shiny UI, basic CRUD on the backend (with large chunks outsourced to AWS and other managed infra services), and an army of marketing and sales people to push it onto large enterprises.

PLenz 5y ago

Perhaps because I only work at companies where the data is the product but I have a hard time imagining a company without a Data Science Department reporting into the CEO

PragmaticPulp 5y ago

This is a good rough outline. As the author says, it's not meant to be a perfect target that fits every company. Adjust accordingly. I like how he limits the number of C-level titles in the early stages to just a CEO and CTO. It's a common mistake for startup founders to hand out too many C-level titles to their cofounders and early hires. This causes problems when the company outgrows some (or most) of those people. If you need to bring in a more experienced CMO, CRO, CSO, or other C-level, your only options are to demote the existing C-level and replace them with a new boss or to arrange their exit from the company. Neither are good looks, and neither make people happy. Much better to start with Director and VP level titles in the early days. You can either bring in a C-level above them when the time is right, or promote them to C-level if they grow into the role. That said, most SaaS I've worked with would want more people on backend/devops at the earl stages. Having 3 people total handle combined devops and backend development is a big risk, especially if any of them want to go on vacation or leave for other jobs. Downtime and server outages are not a good look for a growing SaaS, so don't skimp on people who can keep it up and running.

intricatedetail 5y ago

20% of people generating 80% of value while getting paid a fraction.

gijoeyguerra 5y ago

Please do something different.

ericls 5y ago

I don't like separating Front End and Back End on people. I like the separation on architecture.

ibains 5y ago

I assume SaaS=SaaS-App like iPhone App. Because you can also build serious technology as SaaS.

hcarvalhoalves 5y ago

A less than 1:4 ratio of tech positions, 2 backend developers on a supposedly 50-employee SaaS company is ridiculous and shows how startups burnout tech employees.

alexbrower 5y ago

Understanding fully that this is meant to serve just as a reference, this type of article risks positioning hiring as an end — not as a means to an end. Better to take external advice on typical team sizes / talent needed to achieve specific milestones specific to your business. Hire to get meaningful work done. Not based on a funding-centric "target" org chart.