Scaling Startup Sales: Mistakes when hiring first sales rep

[terrystrickl]

With my third company just crossing its 1 million annual recurring revenue mark I wanted to share my experiences with scaling sales. I've seen so many startups and sales reps fail with hiring the first sales rep. So here's my experiences:

I. Close the first 20-40 customers yourself

Startups change and evolve hugely with their first customers. Founders learn about and sharpen their business on how to go to market and approach prospects.

Here's some important learnings founders must make:

1. Competitors & options: What prospects see your competitors and what other options they see instead of buying your product/service

2. Messaging: Which stories and benefits resonate and which don't

3. Pain points: Which pain points your prospects have and which ones are strong enough to really buy

4. Pricing: What services customers are prepared to pay (more) for

5. Market & segments: What the ideal customer profile(s) look like

6. Sales process: Which steps work, which don't and how to nit it together to a repeatable process

7. Materials & collateral: Which cold email templates provoce a reaction and which slides make your prospect talk about their pains

II. Give sales reps a starting point

Good sales reps that fearlessly call, open doors, learn pains and position your product/service as a solution are usually the ones that repeat something somewhat proven. You can't just give tell them to run off and close stuff. Sales reps can iterate and provide valuable feedback but the nucleus has to be provided by you, the founder(s).

III. Never hire your first sales rep - always hire two!

I've seen it countless times at other startups: The first sales rep fails. And you never know why. It usually comes down to a mix of these reasons:

1. Any combination of not knowing enough about going to market (see above)

2. Skills of the first sales rep: Maybe not as good as advertised

3. Personality / motivation of the first sales rep: Maybe not into sales enough

4. Style of the first sales rep: Maybe he/she doesn't fit or resonate well with your prospects (extreme example: super old-school guy selling female hygene products)

5. Commitment to your products/services: Sales reps work a lot better when they really believe in the stuff they sell

It gets worse the less you know about sales and the longer your sales cycles are. In many cases I've been asked to analyse what's going wrong because the founders don't even know why sales isn't performing.

If you hire two sales reps, you get several key benefits:

1. One sales rep will be better than the other: find out why, how and where!

2. Every sales rep will have strengths: One might be better at prospecting or setting meetings, the other better at reaching the decision maker or moving the sale to the close. Learn that, transfer best practices from one to the other

3. Friendly (!) competition: Good sales reps usually get their kick and confirmation from winning. Beating competition, winning against the odds, turning a challenge into a win… With two sales reps you get an additional motivator: how many quarters can I outperform my peer - without sabotaging and while still helping.

Hope this gets a discussion going. What are your experiences with hiring your first sales reps?

What have you learned, how do you onboard them?

For anybody who wants to watch this instead of reading, here's a video of this on Youtube.

 

[nonku]

@terrystrickl As a sales trainer and lead in revenue digital media, I love this list. Especially point #1!!

I would add that you need to be prepared for a long runway from ‘hire to selling and profitable’. 8 months for a new product with existing relationships for a rep to be profitable on time spent, and up to 18 months to develop a new client list with new products. I have seen many folks let go of great reps that are pacing well against the above time expectation that are let go because founders want it faster.