E=10MS : Sales Vs. Engineering Ratio in Tech Startups

For every $ spent on Engineering, spent 10 on marketing and sales.   

What should be the ratio of sales to Engineering? As high as possible. 10:1 is plausible. For every $1 of effort in making the product, there should be $10 in selling it. Includes founders time, software purchase, external resources. This is true for SaaS and Consumer companies.

A lot of focus in Tech startups is on getting the product right, hence expanding the product or engineering team is the most intuitive thing to do. Yet, a lot of startups that are successful have a not-so-beautiful product, with not many fancy features. Naukri.com, JustDial, Indiamart, Makemytrip and many such have been a sales first company. Their competitors might have “better” products to showcase, but they still won.

Selling is important to make the product. Selling gives the constant feedback loop to your product that engineering can utilise.

Imagine a software product as a research project. Once you have cracked the right work flow, it is easy for anyone to copy it. So even if you find something small, run with it and sell it. Would you want to keep funding a research project forever?

Another way to figure this out is to look at your Key metric; does it change with 1 more engineer or 1 more marketing/sales person.

*I use marketing and sales interchangeably because a lot of low ticket size DIY SaaS companies only have marketing teams.

What is your E:MS ratio?

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