You built a product, found product market fit ($250k-1M ARR), even maybe raised Series A, and you need to move from founder led sales to founder assisted by team led sales. This transition point is one that challenges most founders. I’ve seen it at least a dozen times. It’s hard to do, and the clock is on. How fast you get from 0 to $1M ARR is a vanity metric; the clock is truly ticking once you find product market fit and you start hiring the GTM team. While there is no 1:1 applicable framework to your business, there are common thought elements that successful startups implement. I’m sharing here what I learned yesterday at an event hosted by Next47 in Palo Alto and adding some color from my experience as a first check investor.
How to think like a recruiter - Don’t settle for average in the early days
The best founders are exceptional at recruiting great talent. This blogpost won’t make you exceptional, but it can offer suggestions for improvement. Excellence comes from doing. The VP of People from Oliv shared the main elements you should think about before going in front of a candidate to make sure your pitch lands:
Personalize the pitch: Highlight career growth, culture, and short—and long-term opportunities. Engage candidates with personalized gestures and additional value.
Understand Motivations: Focus on the candidate’s goals and drivers, make sure you truly understand the why behind them. Highlight the mission, culture, and benefits through multiple platforms.
Anticipate Objectives: Preemptively address potential concerns. This is as good of a practice when you pitch an investor and when you pitch talent. Be consistent, ensure messaging is aligned across all touchpoints.
Remember, the goal is for the candidate to say "yes" to the offer and join the organization. Even if you don’t have expert help, you could reverse engineer the process: What are the steps that lead up to this decision? And invest in all stages, not just sourcing (allocate time and budget to the recruiting process).
Take candidates on a "decision tour" and introduce them to the opportunity. Encourage engagement to understand their needs. The goal is to move them forward in the process. At the same time be wary of candidates who want to get “back into early stage startups”, but they diligence your startup like a late stage company, dragging out the recruiting process and taking precious time from you and your team. Create momentum in decision-making. But realize that the more critical the decision, the more time and effort is required.
Once you find the best talent, do roll out the red carpet. Machine Learning and Data Science talent is right now walking on the red carpets of all the hottest startups. These startups put themselves in those candidate’s shoes to provide them with the best experience. One great reading on this topic is from Tod Sacerdoti (the founder of BrightRoll, sold to Yahoo for $640M), focus on edge cases.
And here are the three things you should avoid doing:
Rushing to fill positions: Avoid short-term thinking; align hires with long-term goals. When you reject a candidate, tie it to what they told you (motivation, why reasons) and communicate it to be in their best interest.
Failing To Provide Follow-ups: Keep candidates engaged with consistent communication; nurture as much as engage.
Ignoring Candidate Motivations: Dig into the why behind a candidate's decision-making process.
How to build the sales function - avoid sales people where the data does not back up the story
Having a clearly defined product market fit will attract the best sales talent. Before you hire amazing talent in sales you have to set the groundwork:
Concentrated Focus: Define a strong product market fit out of the gate. It is very difficult to hire and scale a sales team without this.
Repeatable Sales Motion: Create a repeatable sales motion. Who do you sell to, why do they buy it, and does it apply to more than just one specific vertical.
Hire Incredible Talent: The first 5-8 hires will make or break your sales org. They set the tone, they create the culture, they build best practices for future scale.
You did all the work and now you’re ready to hire sales talent, but how do you look for them? Especially if you are an engineer, this is very out of your comfort zone and thus hard. Here what you should look for:
Track record of success: Tenure is critical at previous companies. You don’t want job hoppers, a bunch of one or two year positions one after the other. You want proven ability to have landed somewhere, growing and getting promoted.
Base yourself in data (not your gut): Look at attainment, presidents clubs, W2s. All over prolonged periods of time no short stints). The best reps put their attainment on the display. Avoid (like the plague) those who just have a summary on LinkedIn and no hard numbers.
Hire reps that know how to hunt: Be skeptical of reps from large name brand tech companies. Hire people who don’t need an SDR or other help to find their deals, they make their own dealflow.
Take the best talent possible: Do not overthink the current role of the rep if they are an all star. Sales people will be great at storytelling but if the data does not back the story, they are a no go. As long as those two align, you might not have a 100% fit, they might need to learn specific things about your business, but you have a shot at greatness.
Here what great sales talent looks like - early days at Verkada
Other things to consider when you set up the sales function, besides hiring the best sales talent available to you:
Have a strong comp plan. Let them make a lot of money. Your CFO should be aligned with you on this one, you want sales people to be set up to make a lot of money
Don't mess with the comp plan. You can raise quotas over time. One way to get a bad reputation in the sales community is to mess with the comp.
Invest in sales operations early
When it comes to marketing, you have options, too; they vary from - you know what you need - on the left to - you have no idea - on the right. The caveat is on the right, you won’t get a doer, you’ll get someone who will ask you a lot of questions. Too many companies depend on fractional or outsourced leaders when it comes to G&A and marketing for way too long. One great reading here is from Matt Turck, on hiring a VP of Finance earlier than when you might think you need one.
If you have lessons to share or if you’re a founder transitioning from founder-led sales to team-led sales and you have questions, shoot me a note/comment. I'm happy to share what I learned with my portfolio companies.
