During my sales office hours, I often talk with B2B startup founders who are beginning to see success. They've developed their product to a point where the few customers they have keep using it regularly. Their retention rates are okay and they have early signs of revenue growth.
It’s time to ask the question: should I hire salespeople?
Here are the four stages of sales hiring for B2B startups.
Stage #1: Founder-driven sales (founders only)
The first person to sell your product should be you—the founder—and your co-founders. Even if you hate sales and suck at it. Even if you don’t have any sales experience and know-how. Do customer development yourself, and be as close to your prospects as you can.
Begin with the low-hanging fruit and tap into your network of:
- Friends and acquaintances
- Past employers
- And always ask for introductions left and right.
At this point, the objective is not closing deals. Instead, focus on early stage sales exploration:
- Gain insights into your market
- Understand and listen to your customers better
- What objections do they have?
- How do they describe their problems?
- What are their pain points?
- How do they respond to your solution?
- Figure out which metrics truly matter for your sales outreach and your business
- Test different strategies, methods, and tactics to make sales and drive business
- Get started with cold emails
- Learn sales hacking 101
- Write a sales phone script
This phase is all about getting your hands dirty in the startup hustle and figuring out what works in the real world. It's all about lean sales and validating your idea with the power of the hustle. The experience you gain will help you later evaluate salespeople. Watch this video to learn the basics of founder-driven sales:
Stage #2: Founder-led sales team (2–3 sales reps)
Once you have some success (made some sales, generated some revenue), the question you will ask yourself is: “How do I grow this? How can I take this to the next level?”
This is challenging, because you still need to focus on developing your product further as well. Balancing these two responsibilities isn’t easy.
Now is the time to hire your first sales reps. It's about bringing others on board and having them replicate the results you achieved in stage #1.
Don’t hire expensive sales veterans here. You want them young and hungry. And hire two or three salespeople at the same time. It’s about adding firepower to your sales efforts.
Why hire two sales reps at a time? Four simple reasons:
- Friendly competition
- Less dependence on individual performance
- More data for future sales recruiting
- More firepower
With two or three sales reps, you will be able to do a lot more, try out more things. It will energize all your sales efforts and add friendly competition.
Now you have a sales team—you’re responsible and accountable for them. Sales thrives in this kind of competitive environment and team spirit. And staying afloat in an ocean of rejection will be a lot easier with a supportive team too.
When you tell your sales reps to try a new sales approach, it might work for one but not for the other. In that case, you know that the sales approach is working, and the problem is with someone's ability to execute.
If you have only one sales rep, you don’t really have anything to measure against. Two or three sales reps are still far from perfect for validating data, but it is a lot better than just one.
At this stage, you still need to be deeply involved. You’re managing and leading this team. You’re still pitching, doing outbound and inbound, working with your sales reps, listening to feedback.
You can’t outsource this. There are still too many critical decisions to be made. You need all these one-on-one experiences with customers, different sales channels, and lead generation methods. It’s not enough to monitor numbers. You need to be living them.
Goals you should accomplish before transitioning into the next stage:
- Try and test cold-email templates
- Use an effective sales lead management system
- Be experienced at negotiating deals and know how to handle discount inquiries
- Use drip marketing emails to convert leads better
- Have the ability to see early levels of predictability in your sales funnel
What about commissions/compensation?
Don't worry about setting up commission structures yet. It's too early. Hire these first 2–3 salespeople and work with them to get the sales process to predictability. Once you're there, then you can develop a commission structure with your sales team.
Read Aaron Ross's excellent book Predictable Revenue for some examples of how to develop your compensation structure with your sales team.
How to interview applicants?
There are many ways to go about hiring. Supreme hustler Jason Katzer shared this on our old ElasticSales blog:
Elastic hires the best hustlers to join our sales team to generate growth for the hottest startups across the U.S. and abroad. Hustlers develop and scale sales campaigns for our clients, bring in new business for our company, as well as market and sell Close.io, our sales communication platform.
We believe in transparency, so below is what hiring managers never tell candidates, an inside view on what I look for as I’m hiring our next Hustler.
1. Anybody can apply to a job on Craigslist. Express interest and make them follow up with you.
When I am screening resumes, I send interesting candidates a simple email with my Skype, telling them that I want to chat. Those who are smart enough to call me (since my work number is online and in my email) will get an immediate phone screen. Otherwise, after enough follow up I will get back to them.
2. Screen resumes for interesting topics.
Resumes don't really tell you much. I feel too many companies discriminate based on resumes. So I do the opposite. I take a quick scan for something I want to talk to the person about. Did they work at a company I hate? That’s a plus! Boring hobby? Let's chat about it. A terrible resume, the kinds that make me cringe will fail, but it makes screening much more fun.
3. There is a reason I don't take job interviews, so I don't give them either.
I don't care if someone is good at interviewing. On my first phone screen I want to know:
- Can you sell yourself?
- Can you sell me our company?
- What can you teach me that I don't already know?
- Do I want to hire the people you know?
- If I interrupt your thinking, how do you react?
4. "If you were to start a company, instead of getting a job right now, what would you do?"
I love this question. It started as an accident, but that ambiguous ending is there for a reason. Tell me what the startup does, or what you are going to do in that startup. Or both! Just tell me something with some real passion. If you have passion I'll deconstruct your idea to get a sense of how you think. If I don't like your idea or thought process, even better, because the candidate can then explain why they want to pursue that idea!
5. If they seem like a no. Tell them so they have a chance to prove you wrong.
If someone doesn't have the skills or passion to move on to the next step, I tell them. This saves me from sending them some sad rejection email later and gives them the opportunity to prove me wrong. The most important skill for a Hustler is to manage objections. Sometimes I even tell good candidates, “No, and here’s why,” giving them a chance to pitch after hearing an objection.
6. In a flat org, you have to work with the people you hire.
Many hiring strategies focus on hiring the best. Here’s the selfish reason why. Any problem this person can't handle is going to become a problem that I may have to handle, so I have to end our encounter genuinely wanting to work with a candidate.
7. The boring test.
Google had a great hiring test in its early days. Larry (fact check) didn't want to hire anyone boring. He said that when Google got huge he never wanted to have a delayed flight and have someone come up to him at the airport and say "Hey I work for you." Followed by a boring conversation. It was his worst nightmare, so I stole it!
Stage #3: Junior sales leader (3–15 sales reps)
At this point, your sales exploration has matured: results are a lot more predictable. You’ve established an effective sales funnel. You’re generating consistent growth. It’s not about exploration anymore—it’s about time you start focusing on sales execution.
Let's bring in some experienced sales leadership: a sales manager or sales director.
What should this sales manager accomplish for your company?
- Fine-tune the rough sales approaches you’ve developed
- Expand on the things you’ve learned
- Grow and manage your sales team
- Set up quotas, train, and coach your reps
You want to look for someone who has experience overseeing the growth of a tiny sales team of three people to 10, 20 or 30 people because that’s the next transition you’re going to make. And it’s one you don’t want to be in charge of as a founder yourself.
These people should have started out as junior sales reps in a previous company, and then grown into a managerial or leadership role there, and have already managed a team that's a bit larger than yours, at a company that already is where you want to be in one or two years.
Good sales managers will improve existing structures and optimize processes. They usually do not excel at building something from scratch and figuring things out. But they will propel your business forward if they can build on something that’s already there.
Stage #4: Senior sales leader (25+ sales reps)
Once you’re beyond that barrier of around 15 salespeople and you want to go really big, the next breakthrough will happen at 25+ sales reps.
You'll need a senior sales leader, a VP of Sales who can manage a few sales managers/directors.
Someone with a proven track-record of scaling things big, who is a VP of Sales at a company that already is where you want to be in three years from now. Jason Lemkin shared some great advice on how to hire a VP Sales.
A VP of Sales will work on sales strategy, scaling and expanding your sales channels and partnerships, and moving your customer base upstream as well as improving your unit economics. The VP will:
- Build an organizational structure for the sales team
- Develop hiring and training plans
- Reorganize your commission structure
- Groom sales talent to sales management positions
- Open new offices
- Add new channels like field sales to your inside sales team
- Close larger deals
To bring such a person on board, you'll need to throw a lot of money and some equity at them—that's why this is such a crucial hire, and one that you shouldn't make light-heartedly. They will guide your sales team on a journey that can either make or break your startup.
It’s hard—but it’s worth it
Startup sales is tough. Nothing about it is easy. If you focus on the right things and hire the right people at the right time, you're going to be able to see your startup go from sales exploration to sales execution and ultimately sales scale. Download your free sales hiring checklist and get started!