A Founder’s Guide to the First Sales Hire
Congratulations, founders, you’re ready to make your first sales hire! It’s an exciting time, you are now ready to embark on the next stage of growth. As early stage investors, we meet a lot of founders who are ready to make their first sales hire, but are unsure how to approach the process. It’s a surprisingly complicated decision and we thought we’d share some thoughts on the topic.
What does the business need right now?
Before even meeting with sales candidates, we think it’s incredibly important that founders assess the state of their business and answer three critical questions:
· What is our current sales growth trajectory?
· What is our ideal customer profile (ICP)?
· What are my personal strengths and weaknesses as an operator?
Answering these questions will help define the type of salesperson your company needs. Your sales traction, revenue growth, and ideal customer profile will dictate the types of salespeople best suited for the role. Your own personal background will refine the search, as you look to complement your own skill set. Taken together, these questions will help you zero in on the optimal ‘salesperson persona’ to take your business to the next level.
A ‘salesperson persona’ is an aggregate view of a candidate and comprised of many factors: their years of experience, the types of products they’ve sold, the types of customers they’ve sold to, their expertise in sales management and past roles in sales operations. In the following sections, we’ll help unpack each of these factors and add a few more basic skills that you should expect from a candidate.
We hope this piece will challenge you to thoughtfully consider the various salesperson profiles and skills, and help you find the right one for your business.
These skills are table stakes
Life at an early-stage startup means wearing many hats. In most sales organizations, there’s a lot of behind the scenes sales enablement work that needs to be done to support an efficient and effective sales process. The seller may get credit for the close, but getting that contract signed requires a series of collaborative efforts and coordination between sales, marketing, customer success and product.
With this in mind, it’s essential that you find a candidate who’s both willing and able to execute these core functions:
● Be able to build a narrative & pitch — At larger companies, product marketing teams design the pitches, anecdotes, and rebuttals used by their sales team. Young companies typically don’t have those extensive resources and your candidate will need to shoulder that responsibility. We’d recommend setting up one of your interviews to be a mock pitch where the candidate has to design the sales pitch for your solution and handle objections on the fly.
● Create compelling content — Again, without a marketing team to create beautiful presentations, this responsibility should fall at least partially on your first sales hire. Make sure you’re comfortable with the candidate’s ability to build a sales deck that will visually represent the product and its value. Look for someone with high attention to detail.
● Be comfortable with calling cold leads — In mature companies this responsibility either falls to the marketing team, a junior salesperson, or a sales development rep. In an interview, find out your candidate’s attitude towards this less glamorous role and his/her plans to generate new leads. Would they make cold calls, do an email drip campaign or knock on doors?
● Build & refine a sales process — Your first salesperson will likely have to help refine your sales process design for bringing your product to market. You don’t want your first sales hire to simply take the sales process from their previous company and apply it to your business, just because it worked for them before. For homework, have candidates express what their sales process would look like for your solution. In the interview, have them justify their reasoning for that particular design.
● Interpret product feedback — This is so critical to the success of the company, yet it’s often overlooked when it comes to sales talent. Empathy is critical for a salesperson to be successful. This is especially true when closing your earliest customers who will help inform your product roadmap. Make sure your candidate has the ability to listen, absorb and clearly articulate customer feedback. After facing rejection in the field, a less sophisticated salesperson will report the need to lower prices, while a top seller will deliver constructive feedback to a product manager and help determine how to better articulate the value proposition.
● Have Domain Expertise — This is typically top of mind for founders and while not essential, it can be highly accretive to a sales process. Salespeople with relevant domain expertise have empathy and understanding of their customer’s needs. They often know the native workflows, processes and jargon, as well as other nuanced aspects of the customer’s day-to-day responsibilities that could only be known by someone who was in that seat before. This is not to suggest hiring for a rolodex, which has been shown statistically does not work.
How many years of experience?
For startups that are pre-revenue, or in beta/PoC, it’s uncommon to hire a head of sales. The very first sales at a startup are typically done by founders, which is the lowest cost option, at a time when every dollar matters. Founders often make the best salespeople, too! There’s an old maxim that asks, “Should a salesperson really be able to hit a higher quota than the founder herself?” That’s certainly not universally true, but a thought provoking idea.
It’s not unheard of for a startup with no real revenue, but a minimum viable product (MVP), to hire a salesperson. There’s some logic for a startup in this position to hire someone with 1–5 years of experience, to test the market and get feedback, particularly if the founder(s) must shift focus to other aspects of the business. But the reality is that startups with zero revenue may have a hard time attracting strong, tenured sales talent.
First sales hires are most common when a business has paying customers and some revenue traction already. This is where your options open up a bit and the decision tree becomes more complex. One avenue is to hire a junior salesperson, someone with 2–5 years of experience. With this option, a founder can continue to execute demos and close deals, but allow the junior sales hire to handle outreach and lead generation. This would allow the founder to increase sales capacity, delegate some of the more mundane parts of selling, and still maintain control of the sales organization.
For startups with sales traction, another option is to hire a first salesperson with 5–7+ years of experience. Sales success can sometimes be attributed to the sheer passion and hustle of the founder, but the sales process itself may not be fully built out. There are also times when it may make sense for a founder to focus elsewhere in the business, like on product or engineering. In these situations, a more experienced salesperson will prepare the business to scale, with a sales process that is repeatable and produces consistently predictable results.
In hyper growth scenarios, where the revenue base is north of $2MM-$3MM in ARR and projected sales growth is 300%+, the options for sales hires are greatest. In these situations, there’s a tendency to believe that ‘the product is selling itself’ and any salesperson will do. But you may want to consider hiring an executive with significant experience building high growth sales organizations, with 10–15+ years of experience. Many executives at this level aren’t open to the risk of joining a very early stage startup unless there’s near meteoric revenue growth. It’s worth noting that when you set your sights on the high end of the experience range, the talent pool thins out, especially when you’re also trying to match other criteria, like product and sale type. But the advantages of hiring a senior sales executive are significant. In addition to providing clear leadership, they can create seamless communication and coordination across the executive team. This person can also serve as a steady hand and play a stabilizing role, eliminating extraneous risks and maximizing the opportunity.
Product and customer types
There is a very wide range of products and solutions out there, and each requires different skills and methodologies to effectively sell them. We recommend founders consider the intricate details of their product and customer before interviewing candidates.
Consider who your buyer is. While products and services are usually designed for an end-user, in an enterprise sale, the user may not be the actual buyer. Depending on the nature of your solution and go-to-market strategy, you may be selling to a C-level executive, an entry-level employee, or someone in between.
The type of sale is important, too. In many low ACV sales processes, i.e. below $20K annual contract value, you’re likely selling directly to the end-user. The sale is transactional and short in duration, which requires salespeople to close high volumes. To be successful, salespeople must be disciplined in their activity volume and immune to constant rejection. In contrast, with high ACV enterprise sales, in the six to seven digit range, you’re often selling to a senior or c-suite executive who’s making a buying decision for the entire company. This is a longer duration sales cycle that requires serious project management and solution selling skills.
A good example of how much sales can differ is the contrast between selling an enterprise SaaS solution and an advertising sale. Advertising is usually sold on a quarterly basis through the account executive’s relationships with ad buyers, whereas in SaaS sales you’re typically using a consultative or prescriptive sales approach to sign new 1–5 year contracts. Your sales hire should be well suited for your type of sale.
Sales experience ≠ Sales management experience
Anyone who has spent time in a sales organization knows there’s a near universal overuse of analogies between sales and sports, but some with good reason. One that I have found to be somewhat clichéd, but of value, is the high-level categorization of sales roles: ‘player,’ ‘player coach,’ and ‘coach.’ ‘Players’ are individual contributors, meaning they close business against a quota and don’t have any responsibility for others in the organization. ‘Player coaches’ are responsible for closing against a quota, but also manage one or a team of salespeople. A ‘coach’ is analogous to a sales manager that doesn’t necessarily sell against a personal quota, but manages a team of quota-carrying salespeople.
While these analogies may seem less relevant for a first sales hire, it may not be long before you need an entire sales team. Thinking ahead will pay off.
Your current hiring decision should reflect how much of the sales process you want to delegate now, and over time. Your past work history will likely play a big factor here. For example, if you were previously a senior sales executive, you likely have unparalleled domain expertise and may want to own the sales process for as long as possible. Conversely, you may have a less relevant background and look forward to assigning the sales function to your new hire, as well as leaning on him/her in the future to recruit and manage new sales hires.
As is the case with any role, having sharp selling skills doesn’t necessarily qualify one to be an equally strong manager. It takes a significant amount of time and effort to become an effective manager, so if it’s something you’ll be asking of this first sales hire, you should make sure they have that specific type of experience on their resume.
No matter how structured and prescriptive your hiring process, it’s very possible that you will find a candidate with incredible charisma, someone who instinctively feels right for the role. In some cases, this candidate will have less experience, but will show tremendous intelligence and tenacity. These are the types of people who will buy into your value system, grow with your company and often become major contributors. Sometimes, you have to take a chance on someone like this.
Cultural fit is incredibly important. All new hires should buy into your values and mission statement. Your core values define how your employees should treat customers and each other. At my old startup, we used to say that team cohesion is how the whole becomes more valuable than the sum of its parts. Your first salesperson will represent your values while interacting with customers, and that messaging should positively reflect your company’s mission. Your brand is a reflection of your reputation.
Sales hires must also feel comfortable with the pace of work, the level of resources available, and the amount of hustle required. This alignment is important for fostering a positive culture and can be crucial to the success of the company. When things go sideways, as they inevitably will at some point, you’ll need to know the people surrounding you are as committed to the mission at hand as you are.
At my last company, we were in the process of raising our Series A round of financing with limited runway, and our lead investor walked away from the deal days before closing. This left us with barely enough money to make rent, and we had to go back out to the market to start courting potential lead investors again, a process that can take months. In that moment of crisis, our team of twenty decided that we would forgo our salaries until we secured a lead investor, so that we could keep the lights and servers on. Next time you’re meeting with a candidate, ask yourself, will this person put company and team first?
Hiring your first salesperson can be a lengthy process, but getting the right candidate will have a material, positive impact on the company’s growth trajectory. The goal of this post is to provide a framework for founders to evaluate candidates and help address some of the less obvious nuances of hiring a first salesperson. If you have thoughts or feedback, please shoot me a note: craigb at recvc dot com. We also added a few additional resources below that I’ve learned from over the years.
The Enterprise Sales Learning Curve by Mark Leslie and Charles A. Holloway
The Sales Acceleration Formula by Mark Roberge
Predictable Revenue by Aaron Ross
For Entrepreneurs (the whole site) by David Skok