Who Should I Hire First?
Many technical founders struggle to build out their initial sales team. Some of the questions they wrestle with during this initial growth stage were introduced in our last post, Why Don’t I Have 100 Customers Already. They include:
- When should I start hiring salespeople?
- What does a “good” salesperson look like?
- How do I pay them?
- How much should they sell, i.e., what quota do I give them?
- Should they be located in our HQ office or somewhere else?
- How long does it take to determine if they’re doing a good job and how do I determine this?
- Should I bring on a VP of Sales first so they can answer all these questions for me?
Stage I: Customer Proof
The initial phase of a start-up is defined by product development – execute on the product vision with a small development team and get the product to a state where your first beta customers can try it. The initial beta customers are probably “friends of the firm” – companies or people who know and trust you from past relationships. Once you have exhausted this initial list of beta customers, then you need to find your next 10-20 PAYING customers. Who is going to do that?
The “right” salesperson is not who you think.
I’ll just hire some sales people and they will find customers. Wrong.
First, you’ve probably not run sales before and don’t know what a “good” salesperson looks like. Start-up CEO’s typically hire the experienced salesperson with pre-existing relationships who says they can walk you into multiple accounts. This is, surprisingly, the exact opposite of the right person for you at this Customer Proof stage in your lifecycle.
For simplicity, we will categorize salespeople into two groups: Pioneers and Executors.
Pioneers thrive in less structured environments, both in terms of processes and sales support resources. They are energized by large territories and unrestrained flexibility. Pioneers enjoy the ability to leverage their creativity to identify market opportunities and the initial use cases for the emerging technology. Pioneers are able to close the first customers when there is little or no repeatability in your sales process.
Equate a Pioneer to a chef who enjoys testing ingredients and quantities in order to create the best tasting recipe. Pioneers are hunters. They know how to find, qualify and close new customers, even when you can’t give them a successful recipe.
Executors thrive in environments where the recipe has been created and the goal is to successfully produce and sell the recipe in volume. Executors want to be rewarded for their ability to sell technology in volume to the market and they need to be taught a working recipe. Executors focus on a smaller set of customers in a defined territory where they have pre-existing relationships they can leverage in a sales cycle. Executors may have started as Pioneers in their career, but they typically don’t successfully revert to that model once they have become Executors for an extended period.
Except in rare circumstances, start-ups in the Customer Proof stage will be most successful hiring Pioneers. You need “hunters” to find new customers across a very broad target market. Do NOT think the best answer is to hire Executors who have pre-existing relationships. If you do this, you are assuming you know (meaning you have proof, not just hope) who your target buyer is AND the Executor sales person actually has the pre-existing relationship he claims with this target buyer. The chance that you get both of these right in an early stage start-up is close to zero.
In this Customer Proof stage, you will require one pre-sales engineer for every sales rep. This person needs to run any proof of concepts with the prospect and is responsible for securing the “technical” win. The salesperson and pre-sales engineer are a team that works together to close your initial customers.
Profile of Your Successful Salesperson
What does a Pioneer salesperson look like? He/she is a hunter – period. This means they will find their own opportunities and not wait for marketing to deliver leads. They will make 50+ calls/day to prospects they have already targeted through LinkedIn, annual reports, company size, industry, etc. They probably started their career in inside sales where they did lead development and learned how to make many calls and qualify prospects very quickly.
At some point in the previous 3-5 years, they “graduated” from inside sales to enterprise sales and are managing the entire sales cycle from prospecting to qualification to close to renewal. HOWEVER, they are still Pioneers and have not made the jump to Executors who focus on smaller territories (5-25 accounts) only. In short, they want to be Pioneers and they live to hunt.
Should I bring on a VP of Sales right away? Probably Not.
You can give a sales manager a VP title, but you are really hiring a “player/coach” as the first sales leader. Optimally, the sale leader should have a background where they’ve shown success as a Pioneer and as an Executor. They are most likely a first-line sales manager in their current role.
Most importantly, they should be interested in getting directly involved in the initial client interactions in order to gain valuable feedback to be used to tune the GTM strategy, the target accounts, the messaging and the sales hiring plans. They need to create your sales strategy and process while helping close the first 10-20 customers. You will probably not attract, nor be able to afford, the superstar VP of Sales at this stage in your growth cycle. As your revenues scale into the next stage, you will determine if the VP of Sales should continue to run all of sales or a portion/region of the sales organization.
Here’s what you need to consider when hiring your first sales team.
These are just some of the questions that need to be addressed during the Customer Proof stage. AccelG2M helps companies identify and answer issues in all phases of the company lifecycle.
Follow the blog for more of our proven tactics on how to build successful go-to-market strategies. In upcoming posts we’ll address sales, partner/channels and marketing during all 3 stages of growth. Next up, sales in Stage 2: how to properly grow your sales team for Sales Repeatability.
Herb Cunitz & Mitch Ferguson