ghein- I think a comparison of margin/profitability metrics would be interesting as well. If you find any data on that, please post.
This analysis is geared less at understanding profitability/valuation metrics and more at operational and modeling decisions around growth, like headcount needed to support revenues in high growth companies.
Yeah, absolutely- it's even more likely that outsourcing happens more in one industry than another, so the average numbers are skewed as a result. I would love to see data on that- will post more if I find any.
Hey bcbrown- I took the averages from the raw data: you can find them already scraped at https://github.com/jlaurito/inc5000 (inc5000data_cleaned.csv has only these industries).
You are right- the range is wider than I mentioned, and the true minimum is lower (the numbers in the post are industry-by-industry averages).
I used log-log graphs because they reduce the visual impact of outliers. You can play with the graphs yourself at http://blog.joshlaurito.com/inc5000.html if you want to see alternatives.
There are definitely biases in the sample: these are only fast-growing, 3yr+ old companies that want publicity badly enough to open their books to Inc.
If you are working in a company in a company with a similar profile or compete with any of the companies here, I think the data is useful for deciding how quickly to hire and benchmarking against any competitors that might be in the sample. Also, if you're writing a business/evaluating a business plan this might be useful data. For the rest of us, it's just fun to play with!
Agreed. I limited the sample to Advertising, Media, and Software only for just that reason: they have similar (though not identical) expense structures.
Well, I agree in theory, but I only chose industries where the major expense is people. So if revenue/employee is lower, either pay/employee is lower or margins are.
I suppose a third possibility is that software compensation may have a larger equity component, which would allow software employees to take similar overall comp at lower revenue/employee levels.
That's a fair point zamfi. Though I think that the ability to take that approach is due largely to the supportive funding environment. Ben Horowitz's post today speaks to that point as well: http://bhorowitz.com/2013/10/08/cash-flow-and-destiny/
cool post- my experience with conversion rates in startups is that tracking the changing nature of your audience is really important: early adopters are really fundamentally different from people who want others to test the water. you can kind of see a separation in the vintage chart.