Answering How Do You Get to 10 Million in Sales, 100 Million in Sales?

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Last Updated On: 2025-09-01 04:31:52 -0400

I’ve been paying a lot of attention lately to the This Week in Startups podcast and whenever one of their portfolio companies is interviewed, they alway ask this question:

How do you get to 10 million in sales? How do you get to 100 million in sales?

The first time I heard this, I paused the podcast and I wondered if this was a strategy question and then, after listening to enough episodes, I realized it was just a math question to see if you understand the fundamentals of your business, ARR (annual recurring revenue) and your TAM (total addressable market).

Given that I tend to build SAAS concepts, I’m looking at this in terms of subscriptions instead of, say, a transactional market. For a transactional market, replace the math below with division of your take from each transaction into $10,000,000 or $100,000,000 to get to the number of transactions you need.

To listen to an example of this on the podcast, I recommend Molly Wood’s interview with Chatter founder Pete Oxenham who does a great job on this. Scroll to time index 31:30 for his answer to this question.

Getting to $10,000,000 in ARR

Let’s stay that you have a startup with a $10 / month SAAS fee. That’s $120 per year. So if you want to get to $10,000,000 in ARR then you need to sell $10,000,000 / $120 customers.

Since I’m a software engineer and not a fancy spreadsheet guy, if we roll out a console style calculator (yes this is math nerdery that is only surpassed if I wrote it as a select statement):

❯ irb
cannot load such file -- awesome_print
 :001 > 10_000_000 / 120
 => 83333
 :002 > (10_000_000.to_f / 120).round
 => 83333
 :003 > (10_000_000.to_f / 120).round(2)
 => 83333.33
 :004 >

So, whether we do it as integers or as floating point, you have to have 83,000 annual subscriptions to get to a $10,000,000 business.

NOTE: You could also do this using SQL as:

SELECT 10000000 / 120;
83333

Getting to $100,000,000

And then you could just multiply by 10 to get to a $100,000,000 business or 830,000 subscriptions.

But You Don’t Have to Straight Line Extrapolate

Let’s say that your revenue composition is more nuanced where you have 60% at $10 / month and 40% at $15 per month (say a pro sale). That makes your monthly per subscriber number:

(10 * 12 * 0.6) + (15 * 12 * 0.4)
 => 144.0
10_000_000 / 144
  => 69444

This nicely illustrates the power of an enhanced offering – it dramatically reduces the numbers you have to sell. Now instead of selling 830,000 subscriptions to get to a $100,000,000 business, you need to sell 694,000 subscriptions.

The Idea of TAM

TAM or Total Addressable Market is simply your overall market size. The reason this is important is that if the number of subscriptions you need to sell exceeds the TAM then you might not be able to make a $10,000,000 or $100,000,000 business; or you might need to change your pricing, etc.

How Do You Calculate Your TAM?

This is a classic market research question and the answer, at least some of the time, is Google.

Let’s say that you had a product for deer hunting. A quick Google for “how many deer hunters are in the US” gives:

Heading into fall 2020, there are about 11.4 million deer hunters in the United States. More specifically, there are about 9.4 million people who hunt deer with both gun and bow, and an additional 2 million who hunt deer only with bow (that includes all archery). If you are a casual reader, do not misread these numbers. I’m going to get geeky here, so keep reading for more specific numbers. Again, there are 11.4 million deer hunters in the U.S. This includes 4.63 million bowhunters. We are just talking deer here; this doesn’t include elk, bears, moose, sheep, turkeys, ducks, geese, other small game, etc.

Now this is from deeranddeerhunting.com which might be biased so you’d need to triangulate this number with additional research to see if it matches up (an example might be looking at amount of deer hunting gear sold and projecting up from that on the assumption that a particular type of deer hunting gear is bought each year and can be a proxy for the hunter).

Note: I don’t hunt deer personally; The contractor who fixed my well yesterday was a deer hunter though and he and I got to talking.

The Final Step

The final step in answering this question is to relate the number of subscriptions to the TAM in terms of a percentage to see if it is viable.