I’ve recently spoken with several business leaders who are at the CRITICAL crossroads of needing to hire their first (or first few) salespeople to enter the next phase of growth.
In some cases, the growth so far has all been inbound - generated by marketing or referrals from their network of early adopters. In others, the sales efforts have been led by the founders, and for some, there’s increased competition and choices for customers now, making it important to step up the sales activity. In venture funded companies, there’s the additional pressure of demonstrating growth to raise the next round.
Think too hard and long and not take timely action, and you’ve wasted precious time and incur an opportunity cost. Make a mistake, and that’s costly in many ways too.
There isn’t ONE right approach to this, and it takes the right analysis, but here are 4 key steps to consider:
1) Clarity on the role
Everyone wants that “unicorn” who will bring in existing relationships and also open doors to larger accounts through their hustle, who can help with sales enablement and also meet high sales activity results, who can do the sales admin/ops work well and also lead the team as it grows, who is a team player and also singularly responsible for their revenue targets. Good luck!
While it’s important at growing companies for people to wear multiple hats, think hard about the main hat you want the salesperson to wear – what role MUST they play to help the company grow?
2) Onboarding
Data shows that the level of connection an employee feels in their first 30 days is directly proportional to how long they stay and feel engaged. For some reason, startups don’t always feel this applies to salespeople, which is untrue.
What’s the onboarding plan for this first salesperson?
3) Training
The better and quicker you are at helping the salesperson build the following two competencies, the more success they AND you will see:
Learning about your product or service, internal systems (CRM, ordering, payments etc.), competitor landscape, and how the “sausage is made”
Being able to lead high quality sales conversations/meetings so that IF the results aren’t what you wanted, you at least know it’s likely the product-market fit rather than the salesperson
When training is relevant, customized, and set up as a process and not an event, you will see significantly better results.
4) Compensation
A couple of big challenges to determining the right comp plan in these situations is:
The challenge of knowing how realistic the targets are when there isn’t real history.
We mentioned above the idea that at small companies, people are required to wear many hats. That’s fine for someone on full salary, but hard to motivate someone to wear hats that don’t correspond to bigger commissions and bonuses.
One tactic is to hire two salespeople instead of one. You’ll create a little (hopefully healthy) competition. And you’ll get a much better validation of the product-market fit and your overall strategy. If you hire one person who fails, is it them or you?
This “first sales hire” problem is a REAL one that doesn’t have an easy answer (even outsourcing is to be done with extreme care). What’s clear is that it takes a lot of thought that goes beyond just the hiring step.
These can be addressed and analyzed internally, but as they say, “you can’t read the label from inside the jar”, and objective advice in this area is usually worth the investment given how BIG a decision this is for your business.