The trend towards cloud-based services and the growing adoption of technology in various industries have made SaaS a viable and attractive option for businesses of all sizes. Especially with the shift towards remote work, the demand for SaaS products has increased as companies look to manage their workforces and operations remotely.
According to recent research from Gartner, the global SaaS market is projected to reach $157.05 billion in 2022, up from $85.1 billion in 2018. What is more, Capterra has conducted a survey showing that more than 90% of businesses use at least one SaaS application, and the average company uses about 15 SaaS apps.
SaaS products are expected to continue growing in the coming years. That’s why it’s a widely adopted model and a viable option for businesses of all sizes to consider. The chances are you considered building SaaS as well. But what do you need to get started?
In this article, we’ll tell you all about SaaS companies and the structure you should strive for to run a successful SaaS business.
What is Software as a Service (SaaS)?
SaaS is a business model that involves providing customers with access to software over the internet, rather than selling them a license to install the software on their computer. Customers typically pay a subscription fee on a monthly or annual basis to access the software and any updates or support. This model is becoming increasingly popular as more businesses move their operations online and as more software is used in the cloud.
What are some well-known SaaS companies?
It’s likely that you not only heard about various SaaS businesses but also used them yourself – either in a professional or personal environment. Here are the examples of some notable SaaS companies:
- Salesforce – a customer relationship management platform that helps businesses manage sales, customer service, and marketing.
- Zoom – a video conferencing software that allows users to conduct virtual meetings, webinars, and video chat.
- Microsoft Office 365 – a cloud-based version of the Microsoft Office suite of productivity tools, including Word, Excel, and PowerPoint.
- Slack – a team communication and collaboration platform that allows users to chat, share files, and integrate with other tools.
- Dropbox – a cloud-based file storage and sharing platform that allows users to store and access files from anywhere.
- Shopify – an eCommerce platform that allows businesses to create and manage their online stores.
These are just a few examples. Many more SaaS companies are out there catering to various industries and niches, so the SaaS ideas list is endless.
What is a typical company structure in a SaaS business?
A typical SaaS company structure includes various departments that, in tandem, cover pretty much any possible aspect of the SaaS business. Here are some of the critical departments you could see in a SaaS business (spoiler, they are pretty similar to the majority of B2B companies, yet they have some specialties):
Product development is responsible roughly for the creation and maintenance of the SaaS software business. This includes product design, development, testing, quality assurance, and maintenance.
Product development teams are undoubtedly the most important employees at the very start of your SaaS business. The thing is, your SaaS product wouldn’t even exist without them. They not only develop the technical aspect of the product but also conduct a whole product strategy, planning, and road mapping. Otherwise, how would you know what are your company’s goals and if you’re moving toward them?
Additionally, product developers can go creative and write in-depth user guides, tutorials, and other documentation that help users to use your SaaS effectively.
Sales and Marketing
In general, the department is responsible for generating leads and converting them into paying customers. Their activity should pretty much cover the whole customer journey starting from the awareness stage up to customer loyalty.
Sales and marketing teams are not only generating leads, qualifying leads, or closing deals. In a perfect case scenario, they also should develop and execute a unified sales & marketing strategy that will achieve the company’s goals like building brand awareness and performance analysis.
The department collaborates closely with other teams to perfectly understand their SaaS product and engage with potential customers better.
Customer Service and Support
You could guess from the department’s name that their main responsibilities include providing technical support: They should answer any customer questions and resolve complaints related to the software through various means of communication (phone, email, chat, social media). However, customer support’s tasks are not limited to just that.
The customer service reps also educate customers by providing tutorials, FAQs, and user guides on using the SaaS software effectively. After receiving excellent customer service, customers are satisfied with the software and are more likely to become brand advocates.
That’s when customer satisfaction analysis comes into play. Customer service reps measure several customer satisfaction metrics to identify areas for improvement and attract even more customers afterward.
Finance and Administration
Budgeting, accounting, and financial reporting are this department’s fields of play. If you want to keep your business afloat, you should hire talented specialists for this team. The thing is, all those financial plans, budgets, financial data analytics, and reports are no child’s play.
And it’s not even half of the things these hard-working people do! And I haven’t even mentioned how meticulous you need to be for such a job. Just check out the full list of competencies required from a finance specialist:
- Accounting and Bookkeeping
- Customer Billing
- Risk Management
- And Insurance
Can you imagine a single person doing so many tasks? That’s why your financial experts should be truly devoted to their profession, let alone know very well what they’re doing.
The Human Resources team manages the company’s employees, including recruiting, hiring, onboarding, and training. But, more than just hiring talented people is required – you should convince them to stay. That’s the second half of HR’s work – gathering feedback and throwing all the remaining effort into keeping employees content.
IT and Operations
Last but not least, the IT team manages the IT infrastructure and ensures that the software is available and accessible to customers. In addition, the IT specialists select and implement the cloud services and manage data (including backup and disaster recovery, security, and compliance with regulations).
They implement different network security practices and provide technical support across the whole organization.
Those were the central departments that are usually found in SaaS companies. Depending on the company’s size and product specificity, some companies might have additional departments.
What are the levels of responsibility in a SaaS company?
In a SaaS company, there are several levels of responsibility which refer to the different roles and positions within an organization, tasks, and authority that come with each role.
In non-SaaS companies, you’d usually find 3 layers of responsibility: entry (assistants/interns), mid (managers/supervisors), and senior (directors/executives). However, in SaaS businesses, the tendency inclines towards higher granularity of responsibilities. Hence, the levels also differ.
The most popular case scenario for SaaS companies looks like this:
- CEO/Founder role that comes with the highest level of responsibility, like overall strategic direction, decision-making for the company, building partnerships, and representing the company on the highest level.
- Senior management that includes the senior leaders of each department, such as the CFO, CTO, COO, and VPs of different departments. They are responsible for executing the company’s strategy and leading their respective departments.
- Team Leaders that lead and manage teams within each department, such as product managers, software engineers, and customer support representatives. They are responsible for ensuring that their teams are productive and aligned with the company’s goals.
- Entry-Level Employees: These are the employees who are just starting in their careers. They typically have specific roles and responsibilities within their departments and report to team leaders.
- Interns: These are temporary employees who are usually students or recent graduates. At times, they can work for free just to have some job experience listed in their CV. Similarly to entry-level workers, interns do a list of specific tasks, have small responsibilities within their departments, and report to team leaders.
It’s worth noting that the specific titles and roles may vary depending on the size and structure of the company, but the levels of responsibility are generally similar across SaaS companies.
How would employee roles differ depending on the size of the saas company?
Now that we covered the departments and levels of responsibility across a typical SaaS company, the time has come to look from the perspective of business size. Would the SaaS company structure vary for a SaaS startup or a SaaS enterprise? Let’s find out!
In general, as the company grows, roles tend to become more specialized, and employees have more defined responsibilities.
In a small startup SaaS company, employees often wear many hats and have a wide range of responsibilities. For example, a software engineer might also be responsible for technical customer support, or sales and marketing roles could merge into one. Additionally, the structure of the startup is often flat, with fewer levels of management.
As the company grows, roles become more specialized, departments – are more hierarchical, and employees have more defined responsibilities. For example, in a mid-size SaaS company, a software engineer’s role is mainly focused on the development and maintenance of the software, while a customer support representative’s role only concentrates on assisting with customers’ problems.
In a SaaS enterprise, the roles are even more specialized, and employees’ responsibilities are very specific. For example, software engineers are specialized in supporting specific areas of the software, e.g., security or scalability. Customer support representatives, in their turn, could provide service for a client’s specific industry. Additionally, a large company usually has a clearer hierarchy and a defined chain of command, and employees report to direct managers or team leaders.
So, who is the first person I should hire for my SaaS startup?
As a startup, it’s crucial to prioritize certain roles since the resources are limited. That’s why the aforementioned specialists that wear plenty of hats are preferred.
To give you a heads-up, here’s what you should concentrate on when hiring the very first team for your company.
One of the first people you should hire is likely to be a technical person with a strong software development, product development, or IT background. If you’re not a technical person yourself, you need someone responsible for building and maintaining your future SaaS software. This person should also play a key role in ensuring that the product is reliable, scalable, and user-friendly.
Another essential early hire is a sales and marketing professional to generate leads and convert them into paying customers. After producing a SaaS, you need to secure resources for salaries and the future growth of the customer base, so selling your product properly is necessary.
Lastly, a customer service representative is also one of the key hires in a SaaS company. This person will be responsible for interacting with customers and addressing any issues or concerns they may have, and will be critical in building customer loyalty and satisfaction.
Depending on the size and structure of your startup, these three roles might be combined in one person, especially at the beginning. Later, as your startup becomes more mature, it might be necessary also to have a CTO or CFO to handle the technical and financial side of the business, respectively.
In summary, the first hires in a SaaS startup should be professionals with expertise in sales and marketing, product development, IT, and customer service to ensure that the company has the resources it needs to generate leads, build and maintain the software, and provide excellent customer service.
Getting into a SaaS business can be tricky for a beginner, especially when it comes down to prioritizing the roles. Make sure to keep the company structure in mind when making your next hires. And, most importantly, remember to analyze your current company goals, its size, and your product’s peculiarities to build the perfect-fitting SaaS company structure.