Organizing Your SaaS Company Structure

The work flows through an organization, along with the various lines of reporting and how groups work together to manage tasks are outlined in it. Org structures in a traditional company tend to be formalized with employees grouped by function, region, or product line whereas, SaaS operations team structure is often more loosely defined and flexible to respond rapidly to evolving needs in startups and less traditional structures.

The SaaS organizational structure is used to avoid chaos internally and prevent project milestones from collapsing.

Organizations should align the structure with the business strategy in four areas regardless of the actual org structure that is put in place. These are:

A smoother workflow is facilitated while allowing for the ability to adapt to changing conditions when necessary when individuals in an organization understand the interdependencies of these four areas.

There are also five key elements that define the structure when thinking about your SaaS operations team structure. These are:

The roles and responsibilities of your SaaS will also vary based on your management style.

The authority to make decisions is restricted to only those at the highest levels of management with declining authority for subordinates. This is like the pyramid approach with those people at the top setting policies and strategies for each group below them.

A flatter and leaner organization is created by a decentralized style. Here the greater decision-making authority is with lower levels of the org hierarchy and structure may evolve for different tasks or goals.

Specifically defining a B2B SaaS organizational chart can be difficult because each company has its unique way of conducting business. It also relays on the size and scale of your company and where you are in your growth cycle. You will need to adapt your SaaS company organizational structure to accommodate your growth as you scale.

The organizational chart of your company should be draft to match the way you want to work right now and as your company evolves. You need to look at the typical org structure for SaaS companies of varying sizes and see how they line up with your operational goals to get started. You can approach this by the size of the company or by revenue thresholds.

The structures of your SaaS company changes significantly as the company grows from a small team of 5 to 10 people to an organization with 25 to 50 and beyond 100 full-time workers.

There will be a founder who is responsible for Sales and Marketing, a Co-Founder or first senior hire who is responsible for Product and Technology and another Co-Founder or next senior hire who is responsible for Administration, Operations, and Processes. The full-time workers will be reporting to these three senior or founding members within each operational vertical.

You need more hands-on, operational people to get things done on a daily, weekly, or monthly basis at this size. Although, these new hires are fit into the three broad categories of sales and marketing, product and technology, and admin and processes, but they have specialized tasks and responsibilities, with titles such as Sales Manager, Marketing Manager, Customer Success Manager, Product Development Manager, Admin/Accounting Manager, etc.

You can start thinking about introducing C-suite executive roles such as CTO, CMO, COO, and CFO when you start nearing the 50-60 worker range. People with roles such as VP or Director-level roles will then report to these new C-suite executives.

You can gradually add the roles you need to fill based on your market, growth trajectory, and business needs, when the size of your SaaS company is between 50+ and 100+ full-time workers. You can add the below mentioned roles with 100+ people working full-time:

All of the C-level executives will report to the CEO.

The organizational structure of SaaS can be based on annual recurring revenue (ARR), which is a key metric used by SaaS and subscription businesses to forecast predictable and recurring revenue. The growth momentum for companies is measured by ARR.

ARR up to $1 Million:

SaaS companies with ARR up to $1 million will typically have leads for Sales, Marketing, and Customer Success.

The also start to increase their headcount as companies grow their ARR. The marketing and customer success will have leads, and a VP in Sales is typically leading the sales and growth efforts.

SaaS companies initially invest in engineering at startup and then scale up their go-to-market (GTM) teams when they roll out the product and grow the customer base. Typically, they will have 12 engineers, 6 people in sales, and 4 in marketing.

SaaS companies generally have VPs heading each of the core operational areas when ARR grows beyond $5 million. The ratio of engineers to salespeople becomes to 1:1 rather than 2:1 as sales and support are necessary for growth and support customers. The average SaaS company generally have much as a 10 times growth in sales staffing compared to 5 times in engineering teams and 4 times in marketing teams at this level of ARR.

Typically, companies add a level above the VP rank for sales at the $20 million and above level. A position for Chief Revenue Officer (CRO) is added to oversee growth initiatives in the majority of SaaS companies. Chief Customer Officer and Chief Marketing Officer positions are also introduced although this varies greatly by company.