      SaaStr · 2015-08-05
      · 3955d
    

Why Software Engineers Command Premium Compensation in High-Growth SaaS

Jason Lemkin explains that software engineers earn high salaries during the critical $5M-$80M ARR growth phase because engineer availability is the bottleneck, not cost sensitivity. In this period, companies prioritize hiring top talent over managing expenses, as a single great engineer can generate $1M+ in annual feature value in SaaS businesses.

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Metrics in this report

ARR Threshold - Cost Insensitivity End

80$M

maximum

When cost management becomes relevant again

ARR Threshold - Cost Insensitivity Start

5$M

minimum

When software companies stop worrying about engineering costs

Engineer Annual Revenue Generation

1$M

minimum

Expected annual feature value for a great engineer in SaaS

YoY Growth Rate - High Growth Phase

100%

minimum

Growth rate characterizing the cost-insensitive phase