I am not a founder but worked at various places that did this and I don’t think there is a simple answer except be very resourceful!
High gross margins feed into costs going into future sales and future
development. Zero profit because you are reinvesting. Very tax efficient too!
Also see if there are research tax breaks in your country.
It means being lean and scrappy the whole time (no fluff or big rewrite it in Rust type activity). OTOH the successful companies were not cheap with salaries but not extravagant either. But they aim to get the top 10% cream working for them.
Hate to say it but you need to be strategic and good. Maybe see if you can pay for advice too from someone who has done it in your space.
I haven’t given you an answer! But the main thing I see is a sales system that gets tuned. Sales is done like cattle not pets. And you arrange that or hire someone who can (and as always scrutinise them, learn their job so you can question them).
Thanks for your response. So far, we've been trying to reinvest our revenue into dev, Ips, etc... Here in Denmark, the tax system isn't very startup-friendly. So we're currently working on relocating to the US.
I’ll be researching the term "cattle versus pets" in sales, which is interesting and I'd never heard it before.
Regarding the sales team, I heard from Jason, the founder of Saastr, that offering a base salary with a commission structure up to a certain cap could be a good approach. This way, there's a strong incentive for the salespeople, while also ensuring they generate at least as much revenue for the company as they take home. I’m still unsure about the next steps because we're running on the blade with unexpected expenses like a massive one-night 10B request DDoS attack and a dispute over our logo with Apple.
However I have extended it here to any situation where you have systems in place that you can tweak over say hiring 3 staff and treating them very individually and not having much of an overarching plan.
I worked places where you had one star sales person with 20 years of experience in the industry and that person could sell like mad but if they left you lose all that there is no system around it. But in the short term paying that person overtime and getting out their way makes for a good quarter. But long term the org doesn’t learn anything.
Not in sales myself but just what I have observed from the engineering silo!
High gross margins feed into costs going into future sales and future development. Zero profit because you are reinvesting. Very tax efficient too!
Also see if there are research tax breaks in your country.
It means being lean and scrappy the whole time (no fluff or big rewrite it in Rust type activity). OTOH the successful companies were not cheap with salaries but not extravagant either. But they aim to get the top 10% cream working for them.
Hate to say it but you need to be strategic and good. Maybe see if you can pay for advice too from someone who has done it in your space.
I haven’t given you an answer! But the main thing I see is a sales system that gets tuned. Sales is done like cattle not pets. And you arrange that or hire someone who can (and as always scrutinise them, learn their job so you can question them).
Good luck!