Tomasz Tunguz blog · 2022-11-02
· 1310d
Software Companies Increasing R&D Spend While Cutting GTM: The PLG Effect
Contrary to startup playbooks that cut R&D during downturns, public software companies have increased R&D spending from 24% to 28% of revenue over six years while reducing S&M spend. Product-led growth (PLG) companies lead this trend, increasing R&D from 27.5% to 33% since 2017, inspired by Atlassian's success model.
Metrics in this report
R&D as Percent of Revenue
24 to 28%
6-year change
All public software companies
R&D as Percent of Revenue
25%
median/oscillating
Sales-led companies
R&D as Percent of Revenue
27.5 to 33%
6-year change since 2017
PLG companies