I recently shared a post on building a deal desk function which is a topic I’m often asked about when talking to sales leaders within the growth stage of their startups. While those folks interested in building a deal desk typically have a growing or maturing sales organization, earlier stage founders or sales leaders often have a fair amount of questions first around how to build and scale their sales team.
In this post, I address five key questions that all founders and sales leaders should ask themselves as they build their sales organization, moving away from scrambling to get those first clients to refining the sales pitch, developing a dedicated sales team, and considering a first BDR hire.
Covered in this post:
- When should founders make their first sales hire?
- What are the right profiles for the 1st, 5th, and 10th sales hires?
- When should you hire a sales manager?
- When do you need sales enablement?
- When should you hire BDRs?
1. When should founders make their first sales hire?
Whether they’re a founding CEO who loves to sell, a founding CTO who would rather not, or somewhere in-between, founders need to first sell their product or solution themselves before hiring salespeople. Selling to your first customers is how you begin refining your value proposition and make fast and impactful product iterations. Listening to your customers at this stage is what will determine your company’s early success or failure.
I tend to believe that if you can pay a salesperson market salary (you get what you pay for) and can justify that salary with a few founder-led sales deals at an ACV in at least the thousands, you’re ready to make your first sales hire.
Your first sales hire will play a crucial role in laying the groundwork for your sales organization. Keep in mind that this person will be the first impression many of your first customers have of your company. Therefore, you want this person to be a sharp, skilled, and competent salesperson.
Well, guess what; sharp, skilled, and competent salespeople are careful with choosing startups to work for. Anyone worth their salt in sales is not going to take a job at a startup that hasn’t figured out if customers will buy their product yet. It is not the job of the first sales hire to figure this out. Once the founders have proven they have something customers will pay for, it is the job of the first sales hire to then help refine how the value is communicated. More on this in the next section.
2. What are the right profiles for the 1st, 5th, and 10th sales hires?
The right profile for your 1st sales hire
Your first sales rep will need to operate with limited processes and enablement materials, help the founding team continue to refine the pitch, and make a good impression as the first point of contact with many of the potential customers in your market.
To operate with limited structure and guidelines, your first sales hire will need to be extremely independent, creative, and an excellent problem-solver.
To help the founding team continue to refine the value proposition and acquire new clients, this person will need to be inquisitive and empathetic. These traits will allow this person to ask the right questions and make the assessments needed to understand where the gaps and frictions lie amongst the solution and the market, to then report this information back to the founders.
A good impression is subjective, so be subjective about this part. Ask yourself: “Would I buy from this person?”
You should know your potential customers pretty well by the time you’re thinking about the profile of your first sales rep, so also ask yourself: “Would customers buy our solution from this person?”
People are taking a bet on you at this stage. You don’t have the track record with your product to PROVE it works. As the customer, would I take a bet on this person’s product? Would I trust their company?
Whatever your gut reaction to these questions is should be a strong indicator here.
The right profile for your 5th sales hire
This is where it starts to get more dependent on the startup, itself. In general, though, startups adding a fifth sales rep to their team have probably begun to identify the makings of a repeatable sales process, and will therefore want a salesperson who can execute on that.
But a company at this stage is still undoubtedly going through a lot of changes—new hires, new management, new processes, new offerings, and new pricing. So while these hires will need to be able to run with the process that’s been developed so far, they will also need to have some of those traits of the earlier hires as well that will allow them to adapt to the changes and continue to develop the overall sales process and organization.
The fifth sales hire will need to combine the traits of a trailblazer and a follower. Cooperative enough to pick up the system in place, but independent and creative enough to contribute to its continued development.
The right profile for your 10th sales hire
When the time comes to hire a tenth sales rep, companies should have developed a repeatable sales process, onboarding program, enablement materials, and the makings of a robust sales organization.
People joining such an organization should have a track record of picking up an established process and cooperating within an organization to execute on it in a sustained manner. Every team is different, but some of the traits that helped the early sales reps excel will be less applicable in this position and may even be a detriment to their performance within the team. You may want to think about moving these hires into roles where they are blazing a path for your next product, a new geo or territory, or a new vertical.
3. When should you hire a sales manager?
There are several different schools of thought here. Some say to make your first sales hire have a hybrid seller/manager profile so that they can sell first and manage the new reps as you grow your team. Others would argue to hire a sales manager once you have sales reps that need managing. Personally, I subscribe to the latter approach.
The reality is that someone will always need to be managing your sales team. The managing, itself, will evolve as the team evolves. The first sales hire will need a certain but limited degree of managing, often by the founder. And while the second and third sales reps should still have those characteristics of independence and critical thinking that were vital to the success of the first rep, these new hires will need to be trained, coached, and managed as well.
Find someone who can do this. Whether it’s your most senior sales rep, a VP of Sales, or a Head of Sales. The sooner you can hire those VP-type profiles at your company—the people who have been here and done this before—the more sophisticated and scalable your teams will be, allowing you to avoid some of the typical growing pains of a hyper-growth company and expediting your company’s traction.
4. When do you need sales enablement?
Sales enablement is the process of empowering your salespeople, through various means, to effectively sell your solution with the right message, pitch, and pricing. The means of doing this might be providing information that establishes the salesperson’s competence with the solution and the space it operates in, content such as case studies or product demos that showcase the solution’s efficacy, or tools that empower your team members to be more organized or productive in some way, and therefore more efficient at selling.
The development of your sales enablement materials and processes will mirror that of your sales organization, itself. Before making your first sales hire, you may need some basic materials that enable you to effectively communicate your solution to both customers and early investors; a pitch deck, for example. As your organization grows and becomes more sophisticated, so too will your sales enablement.
But the answer to, “When do you need sales enablement?” is early and always.
5. When should you hire BDRs?
Business Development Representatives, BDRs, are one in the same as Sales Development Representatives, SDRs. The two titles are used interchangeably in business and in conversation. BDRs and SDRs are both more broadly referred to as qualifying reps. Qualifying reps assess inbound and outbound leads to determine whether they are suitable prospects. You may need to hire a qualifying rep as early as the day you hire your second or third sales rep.
To begin assessing if you need a qualifying rep, start with these questions:
- Have you defined what characteristics make for a suitable customer?
- Are you receiving inbound leads?
- Are the inbound leads you’re receiving suitable customers?
- Can you provide guidance on how to identify and develop outbound leads?
In short, in order for it to make sense to hire BDRs or qualifying reps, you need to understand what good leads look like and how to get them.
Qualifying reps work in tandem with closing reps. Closing reps—or Account Executives or Sales Reps—take leads and prospects and turn them into paying customers. Deciding what combination and ratio of qualifying reps to closing reps is right for your company requires a thoughtful analysis of your company’s finances, unit economics, closing cycle, hiring budget, and a number of other items that experienced sales leaders can easily walk you through.
I recommend seeking advice from one or, better yet, a handful of experienced sales leaders as you progress through all of these stages to ensure that you’re capturing as much share of the market your competing in as possible.
Founder and investor, Jack Altman wrote in a post, “that startups are only as great as the people they comprise.” In the post, Altman comments on the statistical improbability of building a successful startup and stresses that, to have any chance at all, startups need to build their teams with the utmost intention and care.
Sales is a vital function that requires a great deal of this strategic attention from the leaders of a startup. Every company will evolve its sales organization uniquely depending on its growth trajectory and any combination of other factors, but there are some basic stages that most teams will need to progress through in order to meet its company’s revenue targets. While the questions and topics addressed in this post are by no means all-encompassing, these topics will provide some helpful direction in understanding what processes need to be addressed and completed at the various stages in a startup’s lifecycle.