Jason M. LemkinCEO, SaaStr · Co-Founder of SaaStr AI, SaaStr Fund, Adobe Sign

Unlocking Growth Potential: Don't Underestimate the Power of Key Hires

24 Aug 2023 · 1 min

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0:32

Jason M. Lemkin argues startups with a few million in ARR can afford senior hires like VPs of sales or engineering, even though founders often think they can't. A VP of engineering might cost $250,000 but generate positive ROI. The key is having enough revenue to support the hire without burning cash.

Questions this video answers

"500,000, 700,000 in cash" (phrased as examples of too little cash to afford certain base salaries).

"Even a couple million in ARR" (speaker says with a couple million in ARR you can afford any hire if they're accretive).

A $250,000 compensation package.

We can't afford a VP of marketing. We can't afford a VP of sales. We can't afford customer success. We can't afford a VP of insurance. It's just not true, folks.
The reason you're.
Saying that is you've never worked with a great one. Now listen, in the very early days, if you have no money, 500,000, 700,000 in cash, maybe you can't afford it. Okay? There are certain. There are certain just base salaries you can't afford.
But after.
Even a couple million in error, you can afford any higher if they're accretive. Now we've done this math on Saster before, but I want to repeat it.
Because almost.
Every day I talk to some founder doing millions or even tens.
Of millions of revenue and says they can't afford something that is ROI positive. If you think you can't afford a VP of Engine, let's say that VP.
Of Eng wants a $250,000 comp package.
And you ship two more huge features that let you close two big enterprise deals they've paid for themselves.