By Mikita Mikado
Your first sales hire should be your CEO (it might end up being yourself), to sell to investors, your initial team, your first clients, and so on. But CEOs and founders have many other responsibilities and (hopefully) soon, you will need to scale your sales strategy. It’s important to hire effectively in the moment but also plan for the future when it comes to sales teams for an early stage startup. Let’s dig in to some quick, actionable tips!
Hire Two People at Once
Jason Lemkin of SaaStr suggests hiring 2 people at once whenever you’re hiring for sales, which I completely agree with. He makes an excellent argument for this, which I’ll summarize for you below:
- Learning from comparison: “If your first rep does poorly, you’ll have no idea why.” Even more interesting: “If your first rep does well…you’ll still have no idea why.”
- Acknowledging that you’re not a sales expert: “It wasn’t until we finally had a second great rep, that I could learn…I could guess before, squint at data. But I didn’t know until I had 2 good ones. Look, if you’ve been a VP of Sales yourself for 10 years, ignore this. But most of you haven’t built or led an inside sales team before. So you’re gonna need to learn.”
- Don’t try to save money: Given the two points above, consider it in an investment in the overall sales strategy of your company. The two will compete, so you won’t have to worry about either of them slacking, and they’ll also be able to collaborate and share best practices.
So if you do this, what are the possible outcomes? Since you’ll have two, the performance results should be comparative. Unless the results are Bad + Very Bad (hopefully this is quite obvious and in this case, there was some issue with hiring so you’ll have to start all over), you should end up with some version of the following:
One rep is significantly or slightly underperforming compared to the other. At this point, you can either let the underperforming rep go or make the better performing rep a manager, who’ll train the worse performing one and/or hire better ones.
Experienced Hires vs. Entry-Level
It is important to know what revenue engine your company is going to establish and stick to. Once you know this and how much you’re willing to invest upfront, it’ll be clearer who you need to hire to start.
If you have the capital and you’re clear on your revenue engine, hire a VP of sales who can help you to build and scale a sales team.
If you don’t have millions of dollars in the bank and can’t afford to hire a VP of sales, you have to act as a VP of sales and figure out repeatable processes for your sales organization. Hire two sales reps (remember, having two is crucial!) the moment you discover a repeatable process for them to follow that is super simple and measureable. For example, you can hire two outbound Sales Development Reps (SDRs) to pitch prospective customers and set up appointments for you. You’ll be talking to customers and closing the deals, but your sales reps will be taking care of a very time-intensive and important task. You’ll be able to measure their performance on the number of appointments set. And those first two outbound SDRs won’t cost a lot to hire and you should be able to find some good ones quickly (unlike a VP of sales).
How to Grow: Hiring Account Executives
You will definitely want to split your sales team’s responsibilities based on these three stages: lead generation, qualification, and closing. The people doing the first two (Sales Development Representatives, as mentioned above) are normally a lot less experienced than the guys closing the deals (Account Executives).
I’d suggest hiring SDRs first and polishing their process over 2-4 months. Once an SDR team produces sales qualified appointments and you personally have no time to handle them all, hire an AE. AEs will be a lot more productive if they already have a pipeline of interested parties to pitch to.
Account Executives are a lot harder to hire, so only start this process when you know you’re ready and they’ll actually be able to be a value add to your business. They’re difficult to hire because AEs that are used to closing $1M deals are very different from the ones that close $1K deals. Those are two entirely different jobs, and many early-stage founders hire the wrong type for their specific business.
$1M vs. $1K: Don’t hire an enterprise AE if you’re closing thousand-dollar deals. They’re not going to be be making the kind of money they’re used to so they will get bored and quit. You’ll spend more money than you need to. Hire someone who’ve been closing similar deals in terms of size and complexity (and if possible, industry or vertical).
Type of sales experience: Software vs. Advertising. Outside of industry or what company they used to work at, think more abstractly about the approach they have used in the past and what skills they’ve built. Many software AEs have to create value and solve problems for customers. Advertising AEs (there are a lot of these in Silicon Valley) are a little different. They’re selling an upside, an opportunity (ad space). Those are two fundamentally different approaches to selling and it is best if your first hires don’t have to learn a new approach on the job.
In understanding these concepts, your company will be able to establish a sales team and scale up accordingly.
Mikita Mikado is a software engineer, entrepreneur and co-founder and CEO of PandaDoc, makers of all-in-one software that enables easier, faster delivery of high-quality, personalized documents. @pandadoc.
