As a business scales, so do its challenges, especially when it comes to hiring. Subramanian Viswanathan, the CEO and co-founder of software-as-a-service firm Disprz, knows this only too well.
Viswanathan says the inflection point for hiring for his company came between 2019 and 2020. At that time, the eight-year-old startup, which runs an AI-powered learning management and upskilling platform, went from having around US$1.5 million to US$2.5 million in annual recurring revenue (ARR).
Image credit: Timmy Loen
When the startup crossed US$2 million in ARR, Viswanathan began to feel the need for new functional heads.
A lot of playbooks are written on the early stages of a startup – from fundraising to finding product-market fit – but the path gets hazier after that. With his experience, Viswanathan explains how he coped with change by making eight key hires.
1. The head of enterprise implementation avoids chaos
As Disprz grew, it began to acquire larger enterprise customers. Some, like Amazon, had more than 100,000 employees, and each of them would be a user on the learning platform.
The sheer size of these accounts made it important to focus on how the platform was deployed, which is different from working with small businesses where a one-size-fits-all approach often suffices. With a large enterprise customer, taking your eye off implementation can cause chaos.
“You can build a very repeatable sales engine, but if your implementations fail, it counts for nothing. So I would urge companies to hire a head of enterprise implementation around the US$3 million to US$4 million mark, and separate implementation from customer success,” says Viswanathan.
2. The head of customer success is a managerial function
Dealing with demanding customers is par for the course in enterprise SaaS. These users want attention, customization, new solutions, and more.
Customer success, therefore, becomes critical. From day one, enterprise SaaS requires a strong customer success function with clearly defined roles as to how much revenue and how many accounts a customer success manager (CSM) can support.
As the company scales, managing the CSMs requires a suitable leader.
“You can train people to become CSMs, but it’s harder to find someone who can manage a team of CSMs. That’s a different skillset,” says Viswanathan. “Early on, we hired a VP of customer success, but down the road, we realized it was so important that my co-founder actually doubled up to play the role.”
3. The director of the founder’s office for strategic initiatives
Scaling a product with a foothold in the market can become all-consuming. So, in the US$2 million to US$3 million ARR range, Viswanathan opened a “founder’s office” to ensure new strategic initiatives got as much attention as daily functions.
“Everybody was neck-deep in implementation. The sales team was busy selling. The product team was busy building. So we needed a founder’s office to execute strategic projects – be it codifying data across the company, designing and implementing playbooks, or going to new markets,” he says.
Viswanathan had to look outside the organization for the founder’s office director.
“Our functional heads did not have the expertise because a lot of the initiatives are cross-functional. Somebody with a business school background who can appreciate different aspects of a business is better equipped for that role,” he says.
4. You need multiple products and a director
It’s easy to fall in love with a product and watch it grow. But, as executive coach Marshall Goldsmith put it, “What got you here won’t get you there.”
You need to keep innovating and building new products to avoid becoming stale.
The ideal number varies from one context to another. In Disprz’s case, Viswanathan felt every group of five developers needed a product manager. Once the number of product managers crossed five, he needed a director of products. In the next cycle of growth, with several product directors, a vice president of products may be needed.
While a product manager may work well with designers, developers, and engineers, Viswanathan feels the director of product managers requires a different skillset, ideally with a business school background.
5. A head in the cloud
A new requirement that’s emerged on the product side is cloud infrastructure management.
“It has become such a complex topic,” says Viswanathan. “Things like application performance monitoring, information security, cloud cost optimization – managing all of this is a full-time job.”
Photo credit: Jenny Laird.
He adds that cloud architecture should be separate from other architecture functions, possibly run by one of the senior engineering leaders. Then once a business hits a scale of US$4 million to US$5 million in ARR, it’s time to hire a dedicated head of cloud infrastructure.
6. HR head for crossing the Dunbar number
British anthropologist Robert Dunbar studied how big a group could get before it began to splinter, and the number he came up with was 150.
In the case of a SaaS company, one way of looking at the Dunbar number is the point beyond which you’re no longer like a family where everybody knows each other directly.
Disprz started an HR function when it reached an employee count of 50 and hired an HR head at 175. Once the CEO no longer has one-on-one relationships with everyone in the company, the team has to be managed professionally to avoid discontent and discord.
7. Head of compliance to do the jobs everyone hates
The popular view of startup culture is to move fast, break the rules, and ask questions later. But this is hard to do when technological compliance is a big issue.
“Compliance has become a topic by itself, but most people hate to do it,” says Viswanathan.
8. Keep investors happy with a VP for corp dev
Fundraising is something founders typically do themselves during a startup’s early days. But once it raises a series B round and scales beyond US$6 million to US$7 million in ARR, this gets too hard to manage.
“After our series B round, we had one seed institutional investor, one series A institutional investor, and two institutional investors for series B. And the founders could no longer manage board meetings and investor relations well,” says Viswanathan.
He adds that hiring a vice president of corporate development to manage current investors and scope out new ones can take a lot off a founder’s plate.
“We are actually in the middle of our series C process. The level of data that the investor today demands and the level of diligence checks we go through – the founders cannot manage. So the corp dev head can actually do that. And again, that frees you up quite a lot as a founder and CEO.”
This article was originally published by SaaSBoomi. It has been edited for clarity.