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How I Reverse Engineered A $100 Million Exit - Jason Lemkin
My First Million
The Minimum Revenue per Employee for Startups and When to Go Multi-Product
Startups need to aim for a minimum revenue of $300,000 to $400,000 per employee to build a sustainable business model with economies of scale. Historically, successful software companies like Adobe, Microsoft, and Intuit achieved $1 million in revenue per employee. In 2021, the revenue per employee for unicorns hit a low of $100,000, illustrating a significant decrease in efficiency. Public SaaS software companies are now operating at $300,000 to $400,000 per employee, with examples like HubSpot at 310 and Cloudflare at 400. It's crucial to reach this revenue range to ensure profitability and scalability. Startup founders must assess their product's profitability, gross margins, and scalability to bridge the gap to the ideal revenue per employee. Going multi-product is a strategic decision for startups, typically recommended when reaching around $10 million in revenue.
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