What happens if we don’t continue to hire new salespeople?
Posted: Thu Feb 06, 2025 6:28 am
This does raise the question of what would happen if we didn’t aggressively invest and hire more salespeople:
saas-economics12
Here, we can see from the left graph that MRR is still growing. But the right graph tells an important story: the growth rate of monthly MRR is starting to slow due to customer churn.
Comparison: Hiring one vs. two salespeople per month
The next question you might want to ask is what would happen if we only hired one salesperson per month instead of two:
saas-economics13
Not surprisingly, MRR and MRR growth are exactly half philippines mobile database of what it was when hiring two new salespeople per month. Now let’s look at the impact this has on the SaaS cash flow trough:
saas-economics20
The left graph shows that it takes the same amount of time to break even. Not surprisingly, the right graph shows that the cash flow trough is halved in size, and the profit is halved. The model is built in a way that you can use the hiring rate in the second tab. For example, you can change the hiring rate in the second tab from 1 salesperson per month to 2 salespeople per month, and then use the graph on the second tab to compare it to the original hiring rate for two salespeople.
saas-economics12
Here, we can see from the left graph that MRR is still growing. But the right graph tells an important story: the growth rate of monthly MRR is starting to slow due to customer churn.
Comparison: Hiring one vs. two salespeople per month
The next question you might want to ask is what would happen if we only hired one salesperson per month instead of two:
saas-economics13
Not surprisingly, MRR and MRR growth are exactly half philippines mobile database of what it was when hiring two new salespeople per month. Now let’s look at the impact this has on the SaaS cash flow trough:
saas-economics20
The left graph shows that it takes the same amount of time to break even. Not surprisingly, the right graph shows that the cash flow trough is halved in size, and the profit is halved. The model is built in a way that you can use the hiring rate in the second tab. For example, you can change the hiring rate in the second tab from 1 salesperson per month to 2 salespeople per month, and then use the graph on the second tab to compare it to the original hiring rate for two salespeople.