Internal Organization of Software Startups During the Scale-Up Process
摘要
A significant proportion of startups that reach a valuation of one billion dollars and attain unicorn status are either software startups or incorporate a software component in their offerings and have raised venture capital to finance the business. In contrast, among the startups established and financed by venture capitalists, only a small percentage successfully scale and achieve the positive exit required by the venture capital model. To address the challenges software startups face during the scaling process, this chapter examines how successful software startups organize their human resources across key firm functions during the scale-up process. We identified three venture capital-financed software startup unicorns that (1) have successfully gone public through an initial public offering (IPO) in the US with an over $1 billion valuation as evidence of their scaling and (2) provide detailed statistics on employee numbers and resource allocation among key firm functions in the years of scaling up to their IPOs. We categorize the internal activities of these firms into four functions commonly used in financial reporting: research and development (R&D), marketing and sales (M&S), general and administrative (G&A), and cost of revenue (COR). Our findings offer insights into how firms organize their human resources internally during the successful scaling process specific to software startups. We demonstrate that in this context, revenue can grow into hundreds of millions, and the number of employees, for example, in the R&D and M&S functions, can increase to several hundred within just a few years. Notably, the growth of the M&S function resourcing appears to play a crucial role in revenue growth during the scale-up phase.