I'd say your comment is even more relevant now than it was 2 years ago.
Would be great to get an non-ZIRP update on this framework, but honestly I've always sought to hit100,000k in revenue per EE for all of my brick and mortar, old school SMBs. Telling how that is the goal for the IPO phase in this taxonomy.
I work as infrastructure/DevOps (systems engineering, network engineering, programming, data center operations, on-call, etc), though I've always had titles like "Senior Operations Engineer", "Operations Engineer, Platform Infrastructure", and "Operations Engineer, <PRODUCT> Operations". To me, the number of infrastructure engineers is nearly always too low. We're the first stop for complaints when there's any kind of issue and that's a huge time-suck. We're the ones up at 4:30am, barely awake, phones blaring, laptops blasting us in the face with light, working voodoo magic to get the product back online. You want to see burn-out? Have one person...
* ...keep a SaaS online while 10+ engineers try their best to break it by using all the new "cool" things they found on StackExchange and HN.
* ...have to tell engineers "no" constantly.
* ...have people go over their head constantly so they can get what they want.
* ...be forced to be seen as the "difficult" person to work with.
* ...be on-call 24/7/365.
* ...not have a moment free of their laptop and phone.
* ...not be able to be unreachable.
* ...who can't take time off.
Please, invest in infrastructure engineers. At 50 people you should, realistically, have three infrastructure engineers.
* On-call? One week primary, one week secondary, and one week off. Nearly two-thirds of what I listed above can be scratched out.
* Give your lone infrastructure engineer people to bounce ideas off of.
* Give your infrastructure engineers the ability to have time to create tooling that makes lives easier.
* Revel in the knowledge-sharing amongst your infrastructure engineers and between them and other engineers.
When engineers have downtime, good things happen. Please, don't run one person ragged because of a ratio.
In the same boat Johanna. Data Engineers sometimes don't get the support they need. I would also plug having a lean technical bizops team (2-3) people to facilitate special projects and act as the glue between data, infrastructure, BI, marketing, sales/revops, and leadership. BizOps engineers should be required at series B, and fuel the rocketship for series A startups.
Totally agree on the number of infrastructure engineers too low.
50 people to manage involves a lot of tasks for infra engineer other than doing devops. And you have to manage newcomers, equipment, issues. Far too much for one person, even worse in a tech company. Otherwise you have to accept that things take a lot of time and are not done as well.
HR should never report to the CFO. All modern companies understand that their employees are the key to their success. Heads of human resources should always report to the CEO directly so that every business decision has input from HR and how it will impact their employees.
I often hear HR people say this, but is there any actual evidence?
Yes, employees are key to success. But who are the employees? Any CTO worth their salt is already looking after and developing their teams. The sales leader is doing the same with the sales folks.
At this stage, functional leaders own most of the "take care of the people" portfolio. It's literally the job of the CEO and their directs to make the culture right at this stage.
You may want a HR Director type (I'd argue VP is too high early) - who reports into CFO or even Legal. But a CHRO at Series A? I don't know any investors who think that's a good idea.
Recruiting, which is what HR function primarily is at these stages, is very much metrics driven input/output function. Recruiting is critical at these stages in order to sustain growth and therefore key component / largest portion of cash burn, which finance needs to closely monitor and forecast to anticipate when next round will be required.
I'm not quite sure what you mean by this. Could you elaborate? The way I'm reading it is that the only way companies will be able keep track of recruiting costs is if they report to the CFO? If that's what you're saying, then couldn't you say that about engineering as well? Depending on your model, probably the second highest cost center.
Thanks for the insights. However, I disagree with the VP of HR and Recruitment being put under CFO. Different traits and competencies required to perform these roles - A finance guy can never completely understand the human side of the business or employees - difficult to have a heart balanced between numbers ($$) and employee delight.
This is super helpful! Can you please share your thoughts on what level of deviations from these ratios are acceptable? Certain segments maybe a bit more R&D heavy than the others for example, so how would one approach these ratios and metrics in context of the sector specific nuances that may arise? (For eg - virtual events as a category is different from traditional SaaS in the sense that there is an episodic use case, super R&D heavy in comparison due to the high speed product release cycles)
Sad to see the only mention of documentation or technical writing show up only as a design copywriter at 400 people strong... in the modern era where good documentation often functions as a sales tool, I'm surprised it isn't even listed as a role in this list. Have you worked with technical writers before? I'm clearly coming to this post late, but I'm curious.
If somebody wanted to make a load of money they would craft a couple million birth pools for the families who are going to he compelled by current events to birth at home. The ones sold on Amazon often run out just with current numbers buying them.
If moms all of a sudden are mostly at home for birth, hundreds of millions around the world will want and need them. A cool feature would be to add in a heating element for garden hose water and a whirlpool effect.
I wonder if there is some startup that would be interested in crafting these?
Great post David, thanks... ARR per employee seems crazy low though, 50 person startup w/ $1M in ARR seems super bloated.
I'd say your comment is even more relevant now than it was 2 years ago.
Would be great to get an non-ZIRP update on this framework, but honestly I've always sought to hit100,000k in revenue per EE for all of my brick and mortar, old school SMBs. Telling how that is the goal for the IPO phase in this taxonomy.
+1
I completely agree on this point.
I work as infrastructure/DevOps (systems engineering, network engineering, programming, data center operations, on-call, etc), though I've always had titles like "Senior Operations Engineer", "Operations Engineer, Platform Infrastructure", and "Operations Engineer, <PRODUCT> Operations". To me, the number of infrastructure engineers is nearly always too low. We're the first stop for complaints when there's any kind of issue and that's a huge time-suck. We're the ones up at 4:30am, barely awake, phones blaring, laptops blasting us in the face with light, working voodoo magic to get the product back online. You want to see burn-out? Have one person...
* ...keep a SaaS online while 10+ engineers try their best to break it by using all the new "cool" things they found on StackExchange and HN.
* ...have to tell engineers "no" constantly.
* ...have people go over their head constantly so they can get what they want.
* ...be forced to be seen as the "difficult" person to work with.
* ...be on-call 24/7/365.
* ...not have a moment free of their laptop and phone.
* ...not be able to be unreachable.
* ...who can't take time off.
Please, invest in infrastructure engineers. At 50 people you should, realistically, have three infrastructure engineers.
* On-call? One week primary, one week secondary, and one week off. Nearly two-thirds of what I listed above can be scratched out.
* Give your lone infrastructure engineer people to bounce ideas off of.
* Give your infrastructure engineers the ability to have time to create tooling that makes lives easier.
* Revel in the knowledge-sharing amongst your infrastructure engineers and between them and other engineers.
When engineers have downtime, good things happen. Please, don't run one person ragged because of a ratio.
In the same boat Johanna. Data Engineers sometimes don't get the support they need. I would also plug having a lean technical bizops team (2-3) people to facilitate special projects and act as the glue between data, infrastructure, BI, marketing, sales/revops, and leadership. BizOps engineers should be required at series B, and fuel the rocketship for series A startups.
Totally agree on the number of infrastructure engineers too low.
50 people to manage involves a lot of tasks for infra engineer other than doing devops. And you have to manage newcomers, equipment, issues. Far too much for one person, even worse in a tech company. Otherwise you have to accept that things take a lot of time and are not done as well.
HR should never report to the CFO. All modern companies understand that their employees are the key to their success. Heads of human resources should always report to the CEO directly so that every business decision has input from HR and how it will impact their employees.
I often hear HR people say this, but is there any actual evidence?
Yes, employees are key to success. But who are the employees? Any CTO worth their salt is already looking after and developing their teams. The sales leader is doing the same with the sales folks.
At this stage, functional leaders own most of the "take care of the people" portfolio. It's literally the job of the CEO and their directs to make the culture right at this stage.
You may want a HR Director type (I'd argue VP is too high early) - who reports into CFO or even Legal. But a CHRO at Series A? I don't know any investors who think that's a good idea.
Recruiting, which is what HR function primarily is at these stages, is very much metrics driven input/output function. Recruiting is critical at these stages in order to sustain growth and therefore key component / largest portion of cash burn, which finance needs to closely monitor and forecast to anticipate when next round will be required.
I'm not quite sure what you mean by this. Could you elaborate? The way I'm reading it is that the only way companies will be able keep track of recruiting costs is if they report to the CFO? If that's what you're saying, then couldn't you say that about engineering as well? Depending on your model, probably the second highest cost center.
Thanks for the insights. However, I disagree with the VP of HR and Recruitment being put under CFO. Different traits and competencies required to perform these roles - A finance guy can never completely understand the human side of the business or employees - difficult to have a heart balanced between numbers ($$) and employee delight.
Any thoughts on angel and seed rounds?
No sales engineers on the org chart - no sales
And why would HR be under CFO? Nonsense.
0 security :) because nobody cares about getting hacked. these days
Incredible resource, thanks Sacks. For Series A, you have listed: Recruiter (1-2). Highly recommend 2 for any sales-focused company
This is super helpful! Can you please share your thoughts on what level of deviations from these ratios are acceptable? Certain segments maybe a bit more R&D heavy than the others for example, so how would one approach these ratios and metrics in context of the sector specific nuances that may arise? (For eg - virtual events as a category is different from traditional SaaS in the sense that there is an episodic use case, super R&D heavy in comparison due to the high speed product release cycles)
Great reference, would love to see seed round too. Thanks mate
Any thoughts on an org chart for Seed stage companies?
Is there a reason COO is not included in these models? Are we assuming the CEO is an operator.
How would these rules of thumb vary for PLG?
Sad to see the only mention of documentation or technical writing show up only as a design copywriter at 400 people strong... in the modern era where good documentation often functions as a sales tool, I'm surprised it isn't even listed as a role in this list. Have you worked with technical writers before? I'm clearly coming to this post late, but I'm curious.
If somebody wanted to make a load of money they would craft a couple million birth pools for the families who are going to he compelled by current events to birth at home. The ones sold on Amazon often run out just with current numbers buying them.
If moms all of a sudden are mostly at home for birth, hundreds of millions around the world will want and need them. A cool feature would be to add in a heating element for garden hose water and a whirlpool effect.
I wonder if there is some startup that would be interested in crafting these?