Growth in the SaaS market has been incredible in the past five years. Zenefits, which provides human resources software, went from $1 million to $10 million in revenue in six months. GuideSpark grew from $1.5 million to $20 million in two years with its employee communications solutions. Companies such as New Relic and Optimizely – application performance monitoring and customer experience optimization, respectively – have topped $100 million.1 Successful companies in this industry are scaling faster than ever. And they must do so, because without strong growth, the chances of long-term, sustainable success are not very good.
According to McKinsey & Company, “supergrowers” – software and online services companies whose growth was greater than 60 percent when they reached $100 million in revenues – were eight times more likely than stallers (less than 20 percent CAGR) to grow from $100 million to $1 billion and three times more likely to do so than growers (between 20 and 60 percent CAGR).2 It’s clear that for any young software/SaaS company, revenue growth is the number one focus. At the same time, rapid growth is an extreme test of your organization’s ability to build the right organizational foundation at the right time for your expanding company. Without a fundamental core of skilled people, disciplined financial processes, and robust technology, explosive growth often results in a scalability crisis in the back office – one that can hobble or completely derail your ability to support your business’ growth trajectory at the levels you want, need, and expect.
