6 ms·

40M in revenue for the year?! Jesus, my startup is making about half that with a good sales pipeline for this year and we are 55 employees total. We might hire

40M in revenue for the year?! Jesus, my startup is making about half that with a good sales pipeline for this year and we are 55 employees total. We might hire additional handful this year but that's it. How do you even onboard when you double your workforce every few months?

version_five 4y ago
I've seen companies with less revenue and a bigger workforce growing at that rate. They call it blitz-scaling, and I don't know if it's actually ever worked, where I saw it first hand it was basically just setting a pile of money on fire.
- thwarted 4y ago
  Yep, this is what happens when your "growth" metric is employee headcount, under the naïve assumption that more people is a proxy for more work getting done is a proxy for revenue. This may make more sense for a sales-focused organization, less so for marketing or technology driven organization.
  - doctor_eval 4y ago
    Maybe not a proxy per se, but more like a leading indicator, right? Those big enterprise customers might not ask about revenue, but the sales unit can certainly brag about headcount.
    - alexb_ 4y ago
      The moment that any indicator becomes a goal it instantly becomes completely useless as an indicator or metric for anything.
      - doctor_eval 4y ago
        Absolutely agree. I wrote the comment while thinking, why would a company need a proxy for revenue, when revenue is so easy to count? On reflection I now understand the GP’s point; when revenue is zero, you need something to use instead. But of course revenue (and, having achieved that, then profit IMO) should be among the concrete goals. It’s so weird that this is missed so often.
- abraxas 4y ago
  Reminds me of my dotcom boom/bust experience of the late nineties where the dotcom was posting monthly "hiring targets" and celebrating that they met them. They were so screwed and tanked badly right after March 2000.
  - wombatpm 4y ago
    March 2001
- stackbutterflow 4y ago
  In a way it seems like SWE jobs in tech hubs are subsidized by VCs. We can see it as some huge redistribution of wealth.
  - jupp0r 4y ago
    Only a fraction of software engineers work for VC backed companies.
  - rmk 4y ago
    With an important caveat. The SWEs in the Bay Area are just conduits for obscene sums of money flowing from VCs to real-estate agents, landlords and homeowners. Plus car dealerships, perhaps (every other car is a Tesla or a higher-end BMW/Mercedes model in the Bay Area).
    - DeathArrow 4y ago
      This is the correct interpretation. All those high salaries are high to cover high standards of living and high prices.
      - rmk 4y ago
        The standards of living are high only because of the natural bounty of the Bay Area. Pretty good weather, stunning natural beauty with easy access to plentiful and varied open spaces, some of the best produce in the nation thanks to the most fertile and productive farmland in the world (central valley), multicultural, and generally tolerant and respectful people. But many of the objective things that count towards a high standard of living are not much better than the rest of the nation, given the eye-watering tax burdens on CA residents. California roads are amongst the worst, housing quality is generally poor and nothing to write home about, failure to promote dense housing has led to encroachment on wooded areas that are huge fire risks, zero investment in burying power lines has exacerbated forest fires even further, and heavy property crime due to the exploding homeless population in core urban areas is continuously threatening public safety. Not to mention the insanely high gas prices (due to CA taxes), consumption taxes and effectively high property taxes which all hit living standards of average people quite hard.
altdataseller 4y ago
Congrats on building a company that is making money sustainably.
- abraxas 4y ago
  Thanks. We definitely want to take it to the next level, beyond a "good lifestyle business" stage but we'll do it on our terms growing the workforce at a rate that makes sense to us despite some pressure from the board to "hire more aggressively".
alberth 4y ago
~$20M in revenue from ~50 employees, equating to $400k in revenue/employee is extremely impressive for an early stage company. What company is that?
- dexterdog 4y ago
  Does it matter if that revenue is unprofitable and there is not a real path to profitability?
  - abraxas 4y ago
    We have been profitable for the past 18 months or so.
    - behnamoh 4y ago
      I like the username! I think I first heard it in the show Foundation (on Apple TV).
      - dieselgate 4y ago
        It’s a Santana álbum too eh?
        seedboot 4y ago
        Also a coffee shop in the Dam!
        tsimionescu 4y ago
        Also a character in the (largely forgotten) action-RTS game Sacrifice! https://sacrifice-shiny.fandom.com/wiki/Abraxus https://sacrifice-shiny.fandom.com/wiki/Abraxus
        nindalf 4y ago
ta988 4y ago
you don't onboard efficiently which makes your new hires inefficient so you have to hire even more to compensate to just get the increase you wanted. This is just one factor in the raise of inefficiencies during a fast company growth.
arturkane7 4y ago
Wow that is very impressive in this climate may I ask what is the category of the business? I am guessing it is not in any of the fashionable current spaces (blockchain, retail logistics, fintech,…)
- abraxas 4y ago
  No, a much less sexy but profitable and still under-served market - industrial monitoring and process improvement.
  - icelancer 4y ago
    Ha, love that. Gotta love the "boring" businesses that have good profit margins and solve problems. We're in a similar industry, with a lot of R&D costs.
  - bluedevilzn 4y ago
    How do you even go about going to a factory and convincing people that they need a certain piece of software? Did you work in this space and already have connections?
    - sodapopcan 4y ago
      I'm butting in here because this struck a chord. There are lots of people of people out there running highly profitable (and globally well-known) businesses off of Excel sheets. They have identified that they don't want to do this anymore as these sheets have grown so monstrously complex over the years that the employees who have to use them are miserable. Basically there is lots of opportunity to start a tech company whose sole purpose is to get much bigger businesses off of Excel. However, for reasons, this is much harder than it sounds.
      - DeathArrow 4y ago
        It's not easy to find those excel users and ask them what they need.
Patrol8394 4y ago
I worked at a startup and the CEO was obsessed with hiring at all cost. We, engineers, were all wondering what the hell these new hires were supposed to do. We did not need them. Then they explained it to me. They needed to show growth through hiring in order to raise money. I mean, I couldn’t even blame them, if that’s a criteria for VC to hand you a check, well you gotta do what you gotta do. Needless to say this startup, eventually had to cut cost and end up firing most North America employees and replacing them with new hires in east Europe.
- jjeaff 4y ago
  My experience is that current investors want you to hire tons of people to shorten your runway so they can force you into another round where they can buy more shares and dilute the founders more.
  - xuki 4y ago
    That might be part of it, but also VCs are not interested in $100 mil exits, they rather you go all out and either capture the market or die trying.
    - lozenge 4y ago
      Have they not heard of the mythical man month?
    - hef19898 4y ago
      I always wonder how much of the faibled 99% start-up failures are up to that attitude. Imagine to settle for 100 million exit, at maybe 2x, more often. Couldn't it be tgat VCs would ve more profitable? Serious question, bevause VCs are professionals in what they do and they definitely have a reason. A reason that totally eludes me.
      - mstipetic 4y ago
        I always thought Uber could be a nice billion plus business modernizing the taxi business and providing software to run it, but no, they had to grow so much to legally fight whole countries and upset regulations
icelancer 4y ago
Yeah Bolt's numbers are just nonsense. We do 1/3 of what you do with a slightly less workforce than you, same hiring strategy. There have to be tons of businesses like ours. No one cares about small business success though. I'd love to read more books and stories about "small" businesses making $5-40MM and how they go about their day and running the company. Would make for far better reading than all the vaporware and malinvestment in the VC space due to free money over the last 5-10 years.
- wodenokoto 4y ago
  "Hidden Champions", it is not super recent, but it deals with mostly what you are looking for. The thesis is (If I remember correctly) that the backbone of Germanys economy are "Hidden Champions", small but highly skilled and specialized companies that can produce a niche (technical) good at an quality that cannot be matched by any other mean, making them practical the entire market for that thing. - The book on Amazon: https://www.amazon.com/Hidden-Champions-Twenty-First-Century-Strategies/dp/0387981462 https://www.amazon.com/Hidden-Champions-Twenty-First-Century... - Wikipedia even has an article on the subject: https://en.wikipedia.org/wiki/Hidden_champions https://en.wikipedia.org/wiki/Hidden_champions
  - walleeee 4y ago
    mittelstands!
- lkrubner 4y ago
  At its peak during the 1980s and 1990s this is exactly what Inc magazine focused on, businesses making between $10 million and $100 million, the vast middle section of American business, the tens of thousands of medium sized businesses that make up the bulk of the economy. And Inc was very popular, because at that time it was a very popular idea for an entrepreneur to build a business on that scale. After 2000 that particular ideal faded away, and also the market for what Inc magazine offered faded away. Slowly, but increasingly, the focus shifted to "unicorns." There were a few contributing factors: 1. In the 1950s and 1960s and 1970s it was still possible to start a business and grow it to $20 million, and then remain relatively stable at that level. However, the creation of new businesses has been in decline since the 1970s, a trend partly offset by the explosion of software startups, but still the trend is downwards. 2. Consolidation. In 1999 there were 8,000 businesses listed on all of the USA's stock markets (NYSE, Nasdaq, etc). In 2022, there are only 3,400 businesses listed. These last 20 years have seen the fastest consolidation in the history of the USA. As such, the middle zone of American business is under pressure. Much more now than before 2000, a business has to get big, or get bought, or go under. So the dream that Inc magazine was selling in the 1980s and 1990s simply isn't realistic any more.

version_five 4y ago

I've seen companies with less revenue and a bigger workforce growing at that rate. They call it blitz-scaling, and I don't know if it's actually ever worked, where I saw it first hand it was basically just setting a pile of money on fire.

thwarted 4y ago
Yep, this is what happens when your "growth" metric is employee headcount, under the naïve assumption that more people is a proxy for more work getting done is a proxy for revenue. This may make more sense for a sales-focused organization, less so for marketing or technology driven organization.
- doctor_eval 4y ago
  Maybe not a proxy per se, but more like a leading indicator, right? Those big enterprise customers might not ask about revenue, but the sales unit can certainly brag about headcount.
  - alexb_ 4y ago
    The moment that any indicator becomes a goal it instantly becomes completely useless as an indicator or metric for anything.
    - doctor_eval 4y ago
      Absolutely agree. I wrote the comment while thinking, why would a company need a proxy for revenue, when revenue is so easy to count? On reflection I now understand the GP’s point; when revenue is zero, you need something to use instead. But of course revenue (and, having achieved that, then profit IMO) should be among the concrete goals. It’s so weird that this is missed so often.
abraxas 4y ago
Reminds me of my dotcom boom/bust experience of the late nineties where the dotcom was posting monthly "hiring targets" and celebrating that they met them. They were so screwed and tanked badly right after March 2000.
- wombatpm 4y ago
  March 2001
stackbutterflow 4y ago
In a way it seems like SWE jobs in tech hubs are subsidized by VCs. We can see it as some huge redistribution of wealth.
- jupp0r 4y ago
  Only a fraction of software engineers work for VC backed companies.
- rmk 4y ago
  With an important caveat. The SWEs in the Bay Area are just conduits for obscene sums of money flowing from VCs to real-estate agents, landlords and homeowners. Plus car dealerships, perhaps (every other car is a Tesla or a higher-end BMW/Mercedes model in the Bay Area).
  - DeathArrow 4y ago
    This is the correct interpretation. All those high salaries are high to cover high standards of living and high prices.
    - rmk 4y ago
      The standards of living are high only because of the natural bounty of the Bay Area. Pretty good weather, stunning natural beauty with easy access to plentiful and varied open spaces, some of the best produce in the nation thanks to the most fertile and productive farmland in the world (central valley), multicultural, and generally tolerant and respectful people. But many of the objective things that count towards a high standard of living are not much better than the rest of the nation, given the eye-watering tax burdens on CA residents. California roads are amongst the worst, housing quality is generally poor and nothing to write home about, failure to promote dense housing has led to encroachment on wooded areas that are huge fire risks, zero investment in burying power lines has exacerbated forest fires even further, and heavy property crime due to the exploding homeless population in core urban areas is continuously threatening public safety. Not to mention the insanely high gas prices (due to CA taxes), consumption taxes and effectively high property taxes which all hit living standards of average people quite hard.

altdataseller 4y ago

Congrats on building a company that is making money sustainably.

abraxas 4y ago
Thanks. We definitely want to take it to the next level, beyond a "good lifestyle business" stage but we'll do it on our terms growing the workforce at a rate that makes sense to us despite some pressure from the board to "hire more aggressively".

alberth 4y ago

~$20M in revenue from ~50 employees, equating to $400k in revenue/employee is extremely impressive for an early stage company. What company is that?

dexterdog 4y ago
Does it matter if that revenue is unprofitable and there is not a real path to profitability?
- abraxas 4y ago
  We have been profitable for the past 18 months or so.
  - behnamoh 4y ago
    I like the username! I think I first heard it in the show Foundation (on Apple TV).
    - dieselgate 4y ago
      It’s a Santana álbum too eh?
      - seedboot 4y ago
        Also a coffee shop in the Dam!
        tsimionescu 4y ago
        Also a character in the (largely forgotten) action-RTS game Sacrifice! https://sacrifice-shiny.fandom.com/wiki/Abraxus https://sacrifice-shiny.fandom.com/wiki/Abraxus
        nindalf 4y ago

ta988 4y ago

you don't onboard efficiently which makes your new hires inefficient so you have to hire even more to compensate to just get the increase you wanted. This is just one factor in the raise of inefficiencies during a fast company growth.

arturkane7 4y ago

Wow that is very impressive in this climate may I ask what is the category of the business? I am guessing it is not in any of the fashionable current spaces (blockchain, retail logistics, fintech,…)

abraxas 4y ago
No, a much less sexy but profitable and still under-served market - industrial monitoring and process improvement.
- icelancer 4y ago
  Ha, love that. Gotta love the "boring" businesses that have good profit margins and solve problems. We're in a similar industry, with a lot of R&D costs.
- bluedevilzn 4y ago
  How do you even go about going to a factory and convincing people that they need a certain piece of software? Did you work in this space and already have connections?
  - sodapopcan 4y ago
    I'm butting in here because this struck a chord. There are lots of people of people out there running highly profitable (and globally well-known) businesses off of Excel sheets. They have identified that they don't want to do this anymore as these sheets have grown so monstrously complex over the years that the employees who have to use them are miserable. Basically there is lots of opportunity to start a tech company whose sole purpose is to get much bigger businesses off of Excel. However, for reasons, this is much harder than it sounds.
    - DeathArrow 4y ago
      It's not easy to find those excel users and ask them what they need.

Patrol8394 4y ago

I worked at a startup and the CEO was obsessed with hiring at all cost. We, engineers, were all wondering what the hell these new hires were supposed to do. We did not need them. Then they explained it to me. They needed to show growth through hiring in order to raise money. I mean, I couldn’t even blame them, if that’s a criteria for VC to hand you a check, well you gotta do what you gotta do. Needless to say this startup, eventually had to cut cost and end up firing most North America employees and replacing them with new hires in east Europe.

jjeaff 4y ago
My experience is that current investors want you to hire tons of people to shorten your runway so they can force you into another round where they can buy more shares and dilute the founders more.
- xuki 4y ago
  That might be part of it, but also VCs are not interested in $100 mil exits, they rather you go all out and either capture the market or die trying.
  - lozenge 4y ago
    Have they not heard of the mythical man month?
  - hef19898 4y ago
    I always wonder how much of the faibled 99% start-up failures are up to that attitude. Imagine to settle for 100 million exit, at maybe 2x, more often. Couldn't it be tgat VCs would ve more profitable? Serious question, bevause VCs are professionals in what they do and they definitely have a reason. A reason that totally eludes me.
    - mstipetic 4y ago
      I always thought Uber could be a nice billion plus business modernizing the taxi business and providing software to run it, but no, they had to grow so much to legally fight whole countries and upset regulations

icelancer 4y ago

Yeah Bolt's numbers are just nonsense. We do 1/3 of what you do with a slightly less workforce than you, same hiring strategy. There have to be tons of businesses like ours. No one cares about small business success though. I'd love to read more books and stories about "small" businesses making $5-40MM and how they go about their day and running the company. Would make for far better reading than all the vaporware and malinvestment in the VC space due to free money over the last 5-10 years.

wodenokoto 4y ago
"Hidden Champions", it is not super recent, but it deals with mostly what you are looking for. The thesis is (If I remember correctly) that the backbone of Germanys economy are "Hidden Champions", small but highly skilled and specialized companies that can produce a niche (technical) good at an quality that cannot be matched by any other mean, making them practical the entire market for that thing. - The book on Amazon: https://www.amazon.com/Hidden-Champions-Twenty-First-Century-Strategies/dp/0387981462 https://www.amazon.com/Hidden-Champions-Twenty-First-Century... - Wikipedia even has an article on the subject: https://en.wikipedia.org/wiki/Hidden_champions https://en.wikipedia.org/wiki/Hidden_champions
- walleeee 4y ago
  mittelstands!
lkrubner 4y ago
At its peak during the 1980s and 1990s this is exactly what Inc magazine focused on, businesses making between $10 million and $100 million, the vast middle section of American business, the tens of thousands of medium sized businesses that make up the bulk of the economy. And Inc was very popular, because at that time it was a very popular idea for an entrepreneur to build a business on that scale. After 2000 that particular ideal faded away, and also the market for what Inc magazine offered faded away. Slowly, but increasingly, the focus shifted to "unicorns." There were a few contributing factors: 1. In the 1950s and 1960s and 1970s it was still possible to start a business and grow it to $20 million, and then remain relatively stable at that level. However, the creation of new businesses has been in decline since the 1970s, a trend partly offset by the explosion of software startups, but still the trend is downwards. 2. Consolidation. In 1999 there were 8,000 businesses listed on all of the USA's stock markets (NYSE, Nasdaq, etc). In 2022, there are only 3,400 businesses listed. These last 20 years have seen the fastest consolidation in the history of the USA. As such, the middle zone of American business is under pressure. Much more now than before 2000, a business has to get big, or get bought, or go under. So the dream that Inc magazine was selling in the 1980s and 1990s simply isn't realistic any more.