Hiring your first salesperson is a momentous point in any startup’s life. It’s also a decision filled with big decisions. In my role at Acceleprise, I get asked this question a lot by early stage founders.
Hire too quickly? You’re plowing money into an employee who’s destined to fail.
Hire too slow? You’ve wasted time while your competitors are scaling quickly.
Timing is Everything
When your company is early, generally the first handful of customers should be closed by you, the founder.
You are the chief salesperson.
It’s your responsibility to know what’s working and what isn’t. These initial meetings will help you confirm the intended and unintended benefits of your product. You need to get your messaging right and have a clear understanding of what your customers are willing to pay for.
On a similar note: include your engineering and product people in some of the sales calls if possible.
They’ll take away their own lessons on both messaging and the product. They need to be involved in the learning experience.
The Time for Rocket Fuel
There will come a point when you’ve found the very beginnings of product-market fit and a repeatable sales process. Because this timing is unique for each company, it’s difficult to predict. A good indicator is you have more qualified inbound leads than you can handle as the founder and/or you have a reasonable sense of your conversions along the sales funnel.
One very simplistic way to look at it: do a gut check on whether your future salesperson can be profitable for you.
Specifically, if your sales engine is to be scaleable, your sales rep should probably be able to book at least 3X more in ARR than their total all-in compensation.
- Your product is priced at $10,000 ARR
- Your sales hire costs you $120,000
- Your sales rep must close 3 deals per month on average!
Is this realistic based on your experience in the sales process?
Set them up for success
Great salespeople become mediocre quickly when they don’t have qualified leads.
It’s your job to set sales up for success. And the best way to do that is to create an inbound leads machine.
You need to generate new (and qualified) leads in an automated and scalable way.
There are some good suggestions here: marketing stack for a lazy SaaS company? You can also use Nova to enchance and improve conversion on your outbound emails with personalization at scale (full disclosure, they are an Acceleprise portfolio company).
Once you’ve figured out a process and can keep your sales reps busy with new prospects, it’s time to hire.
Lastly, if you are selling into large companies and have long sales cycles, having a new hire start from scratch can be frustrating for them. You want to set them up for early wins. Hand over a couple of prospects that are further along in the process, so they can get some closes under their belt relatively quickly. It will build their confidence and get them excited early.
Your Perfect First Sales Hire
You don’t necessarily need someone with the perfect rolodex or someone who’s run sales at a hugely successful tech company right out of the gate.
Below are some things you should look for though.
- Have they owned or assisted in closing deals with a similar ARR to your product
- Have they performed more than one role within sales, including SDR, outbound sales, inside sales, and account executive
- Do they come from a strong organization with training and a metrics-driven process
- Is there a good cultural fit
- They took the time to sign up for and play around with your product, if they were not already a user. They must be genuinely interested in what you’re doing.
Two things worth noting. First, you’ll likely require a fullstack-ish sales rep like I described. Everyone will likely be wearing a lot of hats for some time still.
Second, make sure your salesperson is interested in what they’re selling
They will be on the frontline, representing you, your company, and your vision for the future. This is a critical hire!
Good luck finding the right person (at the right time).
Next up, your team needs to fulfill the simple task of creating a sales organization. No sweat, right?
Michael Cardamone, Managing Director