Scaling — what breaks at each stage

Sales — founder-led sales caps somewhere between $1-2M ARR depending on ACV. Around then, you either hire the first AE or growth flatlines.

Support — the founder can't be the only escalation path. Customer hits 50-150; one person needs to own support full-time.

Engineering velocity — the codebase has accumulated enough debt that every new feature breaks two old ones. Some refactor or rewrite usually shows up around now.

Cash discipline — bigger revenue ≠ bigger cash buffer. Receivables, payment terms, and tax obligations all get more complex; a bookkeeper + fractional CFO becomes worth the spend.

Team coordination — at 5-10 people you can't run on Slack threads alone. Weekly cadence becomes load-bearing.

What to NOT spend on yet: large marketing teams, multiple ICPs, expensive office. Many companies that died at $3M ARR over-spent at $1M ARR.

Management layer — usually around 25-50 employees you go from "everyone reports to founder" to "founder + functional leads." This is the management debt founders often delay; cost of delay is exit of best people.

Process — the just-in-time process that worked at 10 people produces re-work and inconsistency at 30. Time to write the few SOPs you've been resisting.

The second ICP question — you've now won your initial segment. Do you double down (deepen) or expand to a second segment (widen)? Different go-to-market.

Compensation philosophy — informal comp at 5 people becomes unfair at 30. Bands, leveling, equity refresh policy all need to exist.

Founder time — founder time on operating shrinks (or should). If you're still doing every demo at $5M, the company isn't scaling — you are bottlenecking it.

Hiring profile changes — generalist operators (great pre-PMF) underperform vs functional specialists (great at this stage). Several early hires reach the limits of their role; some self-promote out, some need different roles.

Two failure modes:

Cash debt — growing 100% YoY but burning >50% of net new revenue. Looks fine in the metrics deck; runway is silently shrinking. The fix: monthly cash review focused on net burn, not revenue. Sustainable growth = burn rate that decreases as % of revenue over 12 months.

Scaling too fast — common at $5M-$10M ARR. Hire 30 people in 6 months; payroll triples; sales doesn't keep up; layoffs follow. The pattern: a Series A enables a hiring spree before the operating model can absorb it. Be skeptical of "we're hiring for growth that hasn't happened yet."

Signs you're scaling too fast:

• New hires don't have a clear definition of done by week 4
• Founder doesn't know what 30%+ of the team is working on this week
• Spend grew >2x in 6 months; revenue grew <1.5x

Slow down — don't lay off after over-hiring; don't over-hire in the first place.