Typical SaaS Company Org Chart

After writing articles about the typical cost structure of a SaaS company and about building a product vs. an organization, one question remained unanswered:

How does the organizational structure of a SaaS company evolve as it scales?

To say it up front, when it comes to detailed target org charts for each stage, you should not be guided too much by common patterns and opinions of others. There is just so much variance.

I have seen both $5M ARR businesses run by a team of 5 and those run by a team of 100+ employees (profitably). But if you are curious about what to expect at each stage, you can at least get a rough overview.

Let’s take the following graphic from Kyle Poyar’s recent post as a starting point.

I found another similar analysis by Tom Tunguz from 2020. The latter is less granular, but that doesn’t really matter.

In terms of total employee count, the numbers in Kyle’s analysis are slightly lower. I would guess it's because Tom's article was published during boom times in 2020, while Kyle's post was published in 2024 after the transition to more efficiency.

(For the chart, I have grouped the other departments in Kyle's matrix as "Other" for simplicity)

If you disregard the additional departments in Kyle's matrix, the distribution between Engineering, Sales and Marketing looks almost identical.

What we can already see here is that the ratio of engineers to salespeople slowly approaches 1:1, down from 2:1 in the early stages.

What does that tell us?

In the beginning, SaaS companies usually (need to) invest heavily in R&D / product development. As the company grows and the product matures, building out GTM teams becomes a critical factor for further growth and proper commercialization.

The data also shows that the marketing department is growing significantly slower than the sales team.

According to both analyses, a SaaS startup with $1-5 million in revenue has a marketing team of 3 people that triples in size as the company grows and reaches $20-50 million - compared to almost x7 in sales.

Even pure PLG companies need to start adding a sales component at some point if they want to get to the next level. You will need to close larger accounts as you can no longer maintain a decent pace through inbound alone.

Net New ARR of $250k/mo at $5M ARR → 60% yoy
Same at $20M ARR → 15% yoy
At $100M ARR → 3% yoy

You see, at a certain point it just doesn’t move the needle anymore – and inbound cannot be ramped up endlessly. Curious about how to manage the transition with your SaaS business? Check out this article.

Let's briefly summarize:

1. High investments in R&D for initial product development in the early stages.

2. As the business grows, GTM becomes more and more of a focus, the ratio between engineering and sales goes from 2:1 to 1:1.

3. Marketing / inbound reaches its limits at some point, so sales must be scaled faster (more than twice as fast).

PS: My friends at Usersnap just published their “State of Retention” Report together with Churnkey. Lots of good insights, definitely worth a look! 📊