Ask the Expert: What are my career options at a slow-growing software-as-a-service company?
Hello, GeekWire readers. I’m excited to announce that we’re launching a new business advice column, featuring different experts from the Pacific Northwest tech community, answering questions about an array of topics. It’s inspired by common questions from tech workers and entrepreneurs.
We’ll be taking reader submissions, so email us at [email protected] with your questions, and we’ll do our best to get them answered.
Our expert this week is Nikesh Parekh, a longtime Seattle tech executive and entrepreneur who is a general manager at Microsoft leading teams building enterprise applications for the Microsoft Copilot and Power Platform. He co-founded enterprise software startup Suplari, which Microsoft acquired in 2021. — Taylor Soper, GeekWire editor.
Q: I’m the vice president of engineering at a private software-as-a-service company growing at 10% per year. What should I do? What career advice do you have?
NIKESH PAREKH: Before I think about any new career opportunity, I want to understand the value of the stock in my current company and the likelihood of an IPO or acquisition of the company.
But valuing private technology companies is really complicated.
The stock market, acquirers and private investors value the fastest growing SaaS companies at more than 10 times their current revenue. But slow-growing companies can be worth only 2-to-4 times their current revenue.
I generally use the Bessemer Cloud Index to get a rough sense of valuation. If your company has raised significant venture capital, the value of your stock could also be dramatically reduced.
Have a conversation with your manager, the CFO, or the CEO of your company about the value of your stock as you make a decision to leave your current company and seek a new role.
Step two, determine your priorities. Are you optimizing for your growing skills, your title, or compensation depending on your risk tolerance?
If your goal is to become CTO, consider staying at your current company and taking on greater responsibilities like security, risk, product/program management, strategic planning, budgeting or IT. Broadening your skills will position for additional career advancements at your company or positioning yourself as CTO as at another company.
Consider exploring positions with fast-growing generative AI startups. We are in the midst of a major platform shift with genAI, similar to the web back in the late 90s. Building genAI products requires new skillsets and new processes, very different from SaaS. More genAI experience will position you well for in-demand genAI and data science roles at both Big Tech, pure play genAI companies, and other SaaS companies that need to evolve to an AI-first strategy.
It’s unclear which startup will ultimately be successful, but early employees, no matter what the position, at emerging market leaders like Facebook, Uber or now OpenAI made significantly more money from their equity than senior executives at slower growing companies.
You should always be opportunistic if you can find the right role. Unfortunately, the tech industry, especially Big Tech, is going through a period of compression. An analysis of LinkedIn shows that tech jobs across the board have reduced 25-to-30% in 2024.
Be opportunistic to be ready and available for the right job. In the meantime, continue to build your network, management skills and genAI skills.