How Big Should My Team Be? The New SaaS Benchmark in 2025

Over the past few years, the way SaaS startups scale their teams has changed dramatically. According to the 2024 SaaS Benchmarks Report from Growth Unhinged by Kyle Poyar, the traditional “T2D3” playbook—where startups rapidly scaled headcount to match growth—is fading. In its place, a leaner, more AI-augmented model is emerging.

The Shift: From Headcount Flex to High Output Per FTE

Back in 2022, early-stage SaaS companies earning less than $1M in ARR had around 13 people on average. In the top quartile, that number ballooned to 38. But by last year, the average team size dropped to just 7 employees—a stark contrast that reveals deeper trends.

According to Poyar:

“Expectations around ARR per employee are through the roof. AI agent workflows have become the ‘thirst trap’ of LinkedIn. The new flex is reaching the top of the Lean AI startup leaderboard.”
— Kyle Poyar on LinkedIn

This isn’t just a funding constraint—it’s a strategic shift. With ARR per FTE rising to $175k at the $20–50M ARR range, startups are doing more with less—thanks to process automation, AI copilots, and fewer organizational layers.

Benchmarking Team Composition: Where SaaS Teams Are Investing

A breakdown of average team allocation by company size shows some interesting trends:

ARR Range	Avg. Employees	ARR per FTE	Largest Function
<$1M ARR	7	$71k	Engineering (43%)
$1–5M ARR	25	$120k	Engineering (36%)
$5–20M ARR	65	$152k	Engineering (29%)
$20–50M ARR	200	$175k	Engineering (31%)

The data shows that Engineering remains the core investment area—consistently over 30% of total headcount across all stages. But Customer Success & Support, along with G&A, grow in proportion as companies scale.

What This Means for SaaS Founders and Operators

SaaS Isn’t Dead. Bloat Is.

In today’s environment, investors and operators alike are rewarding capital efficiency and sustainable growth. As Forrester notes, “SaaS companies that prioritize velocity and adaptability will outperform those anchored in headcount-based scaling.”

Whether you’re a founder hiring your first few employees or a growth-stage team evaluating cost centers, the 2024 benchmark is clear: fewer people, more automation, greater output.

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