In an initial scenario for startup founders who have overcome a Serie AThey have been involved in their project for about two years, created an initial product and gained their first client portfolio. The ARR (Annual Recurring Revenue, annual recurring sales) are from 200,000 to 500,000 dollars. The first customers were captured by the founders and the initial market was validated in the process. Recently they have also incorporated a first BDR (Business Development Representative, Business Development Representative) to generate more potential clients.
Now the founders want to hire their first sales professional and have a lot of questions. Hire a leader and build from the top down, or start with an individual rep? What type of profile and how much experience should you have? Will hiring a few reps right away help you grow faster?
Founders often come from successful cloud companies and have seen what an efficient sales machine looks like in the growth stage. But that's very different from a company just starting its sales machine, so the first discussion that often comes up when doing an early-stage consultancy is about early-stage versus late-stage sales.
Founders need someone who understands the big picture, understands the business domain, loves technology, and most importantly, asks a lot of questions.
Attention with the stage
Selling an early-stage product in a nascent market to an unclear customer group is like being thrown into a jungle with nothing but a knife. Where is the north? Where is the water, food and shelter? Who is friend or foe?
Founders often proudly share the profile of an outstanding sales candidate who is an outperformer and more than met the quota for three years in a row on a billion dollar cloud unicorn. They are certainly impressive, but they are probably not the right person.
A special type of sales professional is needed to be successful at this stage: a holistic vision, understands and loves technology, a very intelligent person, self-initiated, curious and who dialogues and consults with potential clients with the ability to learn and adaptation. These professionals must also be comfortable with a lack of clarity, resources, and self-direction at an early stage. This person must also be creative enough to imagine how technology can create value in new and different ways.
This professional is both a sales engineer and a representative. Often there is a need to identify and target new value propositions for new types of customers.
Internal communication plays a critical role, and it's important to stay in sync with the team, share newly discovered requirements, and help shape the product and transform the marketing message. It is key to ensure that the early stage sales team excels at this stage and enjoys the process.
On the contrary, the situation is very different in the most advanced companies and, therefore, so are the profile and skills required. The sales movement is clear and well defined, the challenge to be solved with the client, the value proposition, the target market segments and the ICP (Ideal Customer Profile), the qualifications, the behavior of the buyer , competition, differentiation and price: all these elements are understood and known.
The required sales profile is more transaction-oriented, and this person is excellent at executing and closing a repeatable sales process based on company procedures and documents and a mature list of sales assets (use cases, manuals, customer list, etc.)
A general or a soldier?
Another big question is whether to hire a sales lead and let them build their team, or start with one or more collaborating sales account executives, with the founders continuing to lead sales as a function.
This sounds like one of those "depends",… and it is. Various factors such as the nature of the market, the problem, the solution, the ACV (Average Contract Value, the total value of forward contracts accepted) and the volume of business will affect what is decided on this point. It mainly depends on the experience of the founders, if one of the founders has professional sales experience, he has created and managed sales teams in the company before.
Non-sales founders can be very talented natural salespeople: they know the content of the business, have energy and conviction, are highly credible, and attract early adopters. But when they build a small team, they often struggle to replicate their own success and become frustrated; they may see a problem in the reps they hire, not in their own ability to build a sales process and organization.
There is another factor to consider: There must be a transition from the founder-led sale to a sales-led process after the idea is raised. Serie A and before the goals for a Serie B of success. It is not yet about scaling the company; it's about demonstrating that a trained professional sales team can successfully attract and close customers, and meet established quota goals. That's what investors are looking for Serie B.
Having a founder at the helm of the sales function, even a gifted one, can affect delivering that proof of growth. It takes extra discipline to trust the newly hired sales team and let them really lead and own the process. An outsourced VP of Sales with the right skills in the early stages is really what helps meet growth goals.
How many, when?
From this point on, the conversation usually turns to team size. Founders are usually optimistic and want to grow fast, so right now they plan to hire three, four, five or six reps in quick succession. Is that correct?
Some aspects must be taken into account. First, it's generally a good idea to hire in pairs. A single salesperson can feel lonely and friendly competition between reps is good. Training efforts are more efficient and will learn from each other. The risk is also distributed more in case of leaving functions, change or directly leaving one of them.
With at least two sales reps, it's easier to compare and discern if it's a product/market issue or a sales team profile. If one performs brilliantly and the other is poor, the problem is more likely to be the choice of profile. If both fail, it's probably a product/market issue.
