Zero to Sixty (Salespeople) in Enterprise SaaS: Part 1 of 4

A Methodology for Building and Scaling a Sales Team Sustainably

Building a sales organization at any early stage startup is hard, especially when nobody on your founding team has spent time as a sales leader. Hiring salespeople is hard, and hiring good salespeople is really hard. Despite this, I’ve seen very few frameworks for how to think about building as scaling a sales team from scratch.  

As the market has shifted from a “growth at all costs” mindset towards  “sustainable growth”, this methodology feels more relevant than ever. Many startups that were pushed towards growth at all costs are now feeling the pain of having focused on maximizing short-term results at the expense of their long-term goals and sustainability. I hope this can be a guide for technical founders, operators, or anyone looking to build a sales team on how to approach this complex problem in a manner that’s optimized for the long-term health of the sales organization. This series will include not just recommendations but also the logic behind those recommendations, so that you can determine if my approach (which has worked for startups I advise) will also be the right approach for you. 

I’ll be releasing this methodology in 4 posts (see below) over the next few weeks.

Overview of Articles:

1. Founder-Led Sales (When to make your first hire)

   1. Whether to hire Sellers or a Sales Leader first

2. First Hires

   1. First 2-4 Sellers

   2. First Sales Leader

3. Establishing the Second Line of Management 

   1. Promote the Director, or Hire an external VP?

   2. Filling out your front line (Directors and teams)

4. Segmentation

   1. Creating Segmentation

   2. Scaling Segmentation

Preface: 

Sales organizations are far too varied for any one approach to always be correct. In particular, the question of when each of these shifts should happen and how long an organization should stay in any one of these stages does not have a single answer - so I’m not going to touch that topic (yet). Instead, I’ll try to give a few signals and clues to look out for as you navigate the transitions. I’ll also attempt to explain the thought process behind each recommendation and the counterarguments.

In short graphical format:

Founder-Led Sales (When to make your first hire):

Do: 

• Run sales yourself as long as you can. 

Don’t: 

• Hire only one seller (start with at least 2)

Run sales as a founder as long as you can. In a perfect world, you’d stick to founder-led sales right up until you start losing deals from lack of bandwidth, but this isn’t a perfect world and in the chaos of an early-stage startup, getting that timing right is tricky. You’ll likely hire your first salesperson a little too early (paying for expensive sellers before you had to) or a little too late (and losing a few deals because of it) and that’s OK. 

While the perfect timing will vary from company to company, I recommend finding a sales-specific advisor to work deals with you as the founder. This advisor can help you with some sales fundamentals and avoid basic mistakes early on. 

You may be able to close deals just fine without an advisor, but it’s important to consider the opportunity cost. For very little cost you can drastically speed up sales cycles (freeing you as a founder to focus on other priorities or other deals). Time is your most valuable resource and this approach can cost-effectively help you minimize mistakes. 

That advisor should help you bring on your first two sales hires. Hire two, don’t be tempted to start with just one. I know sellers are expensive on paper but the ability to A/B test their approaches against each other will prove critical in the early days. Plus, 40% of sales hires are mis-hires which can easily lead to $500k in lost revenue per mis-hire (credit to Chris Orlob on the math). Having an advisor on board until you’re ready to hire a sales leader to help with the interview process will cut down on this.

There are a few scenarios in which you may want to intentionally hire sellers earlier than this. The most common is to capitalize on first mover advantage:

1. If market share is a large part of your competitive moat, hiring sellers earlier will be expensive, but potentially worth the cost to build early market share.

2. If refining your Ideal Customer Profile (ICP) early is a big enough concern that you’re willing to throw money at the problem, early sellers will get you more data on your ICP far faster than you would be able to collect it on your own.

Whether to hire Sellers or a Sales Leader first:

Before we discuss how to hire your first sellers or your first sales leaders, we need to take a short detour to discuss which role you should hire first. Many founders are tempted to start with a sales leader (especially if they don’t have much sales knowledge) but I recommend the opposite, here is my logic.

Hiring someone who is both a good sales leader and the right fit for your company’s sales motion and culture before you have account executives who are performing is extremely difficult. If it works out, it’s usually luck. There are a few reasons for this:

1. Without data, sales leaders can only do half their job. They will help your sellers with their fundamentals and help you manage the emotional rollercoaster that will come with any founder slowly letting go of the revenue engine. But they won’t be able to develop systems for at least 6 months. Without data, it’s also much harder to identify if a sales leader is the right fit for your sales motion.

   1. Founder-led sales data is unlikely to translate to your first few sellers. A good sales leader will need data from full-time sales hires to start making the decisions you need from them. 

2. Many founders who hire a sales leader before they hire sellers are doing it because they aren’t confident in their own ability to (or want to delegate) hire good sellers. This can be a valid concern but there are other much more cost-effective and sustainable ways to make your first few hires good ones.

   1. Work with a sales advisor who can help with the sales interviewing process

   2. Engage a professional sales interviewing firm (Quotasignal or an alternative) to help qualify candidates for sales skills, then all you have to do is look for cultural fit. 

3. At the early stages, the best sales leaders will be more attracted to a company that has demonstrable commercial traction outside of founder-led sales. If you have two account executives crushing it and providing the data to back up your capacity to scale the team, you’ll have a long list of interested top-tier sales leaders wanting to join. 

   1. If you’re looking for someone to take a chance on you, your idea, and the founder-led sales you’ve had so far (without evidence that a sales team can replicate your personal results), expect to be taking a big chance of your own on that potential sales leader. 

   2. Hiring a sales leader and expecting them to sell first before leading a team will have a similar effect. These roles have very different skillsets, performance in one doesn’t guarantee performance in the other. On top of this, they will have to ramp twice (once as a seller and then again as a sales leader). Things change quickly in a small company. If you hire them with a promise to promote them in 6 months, things may change to a point where you can’t promote them. In that case, you’ll lose a good seller/leader. If you don’t think they’re ready to lead a sales team, don’t hire them as anything but a seller.  

4. Hiring a sales leader and asking them to carry an individual quota in addition to their team quota is dangerous because it creates misaligned incentives. Usually this results in the sales leader doing well at the expense of their team.

Does it ever make sense to hire a sales leader before any sellers?

• The only time I’ve seen this making sense is when the company *should* have made their first sales hires months ago, but didn’t. Now you want the sales org to be >6 sellers within the next 6 months. It can be difficult, but I still recommend taking this slow. The potential damage done by the wrong leader (and the turmoil created by reassigning or replacing them) usually outweighs the benefits of rushing growth.

That’s it for part one!

I’d love to hear your thoughts and feedback as well as additional topics you’d find helpful. If this really resonated with you (or you’re at an early stage company and want to talk about advising) and you’d like to dig deeper on any of this, reach out and let’s find a time to chat.