High-Impact Sales Hiring

You’re reading an excerpt of Founding Sales: The Early-Stage Go-To-Market Handbook, a book by Pete Kazanjy. The most in-depth, tactical handbook ever written for early-stage B2B sales, it distills early sales first principles and teaches the skills required, from being a founder selling to being an early salesperson and a sales leader. Purchase the book to support the author and the ad-free Holloway reading experience. You get instant digital access, commentary and future updates, and a high-quality PDF download.

Now that you know that your initial go-to-market strategy is working, based on the metrics we covered in prior sections, it’s time to scale by adding more people.

For good and for bad, the way that traditional SaaS sales organizations scale is by incrementally adding humans to execute the sales work—calls, emails, demos, negotiation, closing—that leads to revenue.

On the one hand, this can be challenging, because humans are complicated; it’s difficult to make judgments about an unfamiliar person when hiring and, later on, when managing. On the other hand, if you get the right folks in-house—professionals who are hungry, intelligent, self-directed, and results oriented—it can be magical, and not just for individual execution of calls, demos, and so forth. There’s a rich-get-richer flywheel mechanism to sales hiring: high-quality folks produce high-quality work, leading to high-quality business outcomes, leading to a more engaging, rewarding work environment, leading to more high-quality employees and recruits. And the cycle reverberates throughout the company. Let’s make sure this scenario applies to you.

​important​It’s hard to overstate the importance of high-quality hiring in early-stage sales organizations that have hit the point of scaling. When you’re taking a new solution to market, your biggest cost is opportunity cost. In a greenfield market, it’s generally a land grab. Every week you don’t have that next market development rep calling against qualified accounts is a week your competitors have an advantage. And every week you don’t have that new account executive doing demos and closing business is a week that your competitors are doing their darnedest to lock those customers in for good. Not to mention, if your startup is not yet profitable, it’s a race against time before you run out of money; you need to quickly demonstrate sufficiently attractive metrics to raise funding.

Conversely, bad sales hiring can be the death knell of an early-stage sales organization. The cost of a bad market development rep isn’t the three months of salary before you fire him. It’s the dozens of demos that a good hire, sitting in his seat, could have been setting, 20–30% of which would have turned into deals. And the cost of a bad account executive isn’t her salary for two quarters while she’s supposedly ramping up but rather the fact that customers she should have been closing have now been signed by your competitor. Now their customer success org is getting those customers set up, locked in, and succeeding, so you’re never going to get a shot at them again.

Sales hiring is, quite simply, mission critical, and it’s something you’re going to have to get good at. I have zero doubt whatsoever that the ability to attract, hire, and onboard successful, high-quality sales staff can be a monster competitive advantage that startups have against ossified incumbents riddled with legacy sales staff with bad habits, poor technology usage, and massive layers of managerial overhead. So this isn’t just a task to get done. It’s an opportunity to pull further ahead. Again, SaaS sales organizations scale by adding more high-quality humans, so a core competency is going to be getting those folks onboard in a repeatable, sustainable fashion. It’s not really something you can have someone else figure out for you. You need to get your arms around it.

In this chapter, we’ll cover what you need to know to start growing your sales org, from hiring by specialty and specifying your hiring profile to identifying hiring sources for that profile, through screening and interviewing, all the way to closing candidates and understanding the basics of compensation plans.

Scaling by Specialization

As I’ve noted previously, a hallmark of a modern sales organization is specialization, which ultimately fosters greater expertise and efficiency in executing each step of the sales process.

As you start to hire, then, you should be thinking about what part of your sales process you’re hiring to support. Generally speaking—given that a founder or product manager starts out doing both the market development activities of calling accounts and setting appointments with decision-makers, alongside account executive activities like sales presentation, demo, negotiation, and closing—the first thing you’ll need is market development help to load your calendar with appointments. Then, once your lead-generation function is sufficiently ramped that your individual calendar is overloaded (when you don’t have enough time for sufficient down-funnel follow-up and closing conversations), it’s time to add more account executives. Later, when you have enough customers approaching renewals, it’s time to add account management functionality.

Depending on the role(s) that you’re hiring for, your approach may change at the margins, typically with more involved hiring processes for more senior roles. But the kernel will be largely the same.

We’ll start with the most general components, then move to the specifics of hiring for certain key roles.

Determining Your Hiring Profile

To start, you should converge on your hiring profile. A hiring profile, not to be confused with a job description, is the set of characteristics that define your ideal hire, including both raw and professional characteristics. I started, grew, and refined the TalentBin sales organization and later extended that to a sales organization of 1K+ people at Monster, all while working with other early- and mid-stage sales organizations to help build or refine their sales orgs. Along the way, I’ve come to deeply believe that your sales staffing should be of the same quality as your engineering staffing. And thus your hiring methodology should reflect this.

This flies in the face of decades of sales-hiring theory, which has in large part treated a sales rep as a sales re as a sales rep—fungible, coin-operated, cannon-fodder infantry to march into the field. We’ll talk about this more in High-Impact Sales Onboarding and Training as well, but the approach of hiring large numbers of sales staff that seem to meet a moderate bar, then firing them if they don’t work out, is especially pernicious in an early-stage organization selling a high-innovation product. It may work for organizations that are trying to value-engineer—hiring the lowest common denominator at a 30th-percentile market cost in order to keep their cost of sales low. But it’s no good for twenty-first-century software sales. The opportunity cost you’re eating using this approach is terrible.

Raw Characteristics

What I look for in potential sales staff, and what I have coached others to hire for, is high intellectual acumen, a high “figure shit out” quotient (practical, resourceful street smarts), and a high “grinder” quotient (willingness to do the grunt work).

Smart solutions require smart sales staff. Having the brains to quickly understand things is a prerequisite for understanding the dynamics of the market—the business models and economics of prospects, the existing solution ecosystem, the competitive landscape, and so on. It’s also representative of a potential hire’s ability to internalize new features and their customer-facing benefits as your engineering team ships them. If you are in the business of bringing a new, innovative solution to market, one that changes and improves constantly, the importance of staff that can quickly ingest, comprehend, retain, and express the value of that solution cannot be overstated.

The alternative is sales staff who don’t and can’t understand the business processes and economics of their clients; without that foundation, they can’t position the positive impact of your solution, will not be facile with the market landscape, and will have difficulty expressing the value of new engineering efforts. You can probably see why I compared sales and engineering hiring above—because you can have the smartest, hardest-shipping engineering and product organization in the world, but if the folks who take that to market can’t do those efforts justice, you’re in serious trouble.

And while intellectual acumen in your sales staff is required, it’s not sufficient by itself. That intellectual horsepower needs to be leveraged by practicality and resourcefulness. For starters, analysis paralysis—that hair-twirling noodling you get from intelligence absent practicality—is anathema to the high-activity execution that is required for enterprise sales success. Spending five minutes thinking about the perfect way to respond to that email is not helpful when there are 30 more you need to send by the end of the day. Moreover, nothing in sales takes an elegant, deterministic route from point A to point B. Every deal has twists and turns, so an ability to figure it out and do whatever it takes to get the ball across the goal line is paramount. The tooling will never be perfect. The decision-makers will never fall into line the way you want. It is the role of the sales professional to figure out how to succeed in spite of that. So look for people who can just figure it out.

Lastly, in enterprise sales, activity is king. And a lot of that activity isn’t particularly fun. Making 80 phone calls a day isn’t pleasant. Getting shot down on the phone isn’t either. Doing five demos back-to-back is actually physically taxing effort. Sitting down and ripping through dozens of emails as you clear a pipeline is boring. And all of these activities are certainly less fun than checking out what’s happening on Facebook, Twitter, or Instagram, or chatting with colleagues or mindlessly responding to colleague-facing email. But those unpleasant tasks are all important for sales success. The staff who will be able to thrive in this sort of environment have that high grinder quotient, or the ability to work through large amounts of not terribly pleasant work because they know that it’s important for their success.

You want to select for sales staff that can comprehend the space in which they operate and where your solution fits in, constantly update that mental model as both the space and your solution evolve, and resourcefully execute at a high tempo. I’ve boiled it down for myself to a sort of cheat sheet of the leading indicators of these characteristics.

Smarts

The best way to get smart sales staff is through referral by people whose judgment you trust. That’s why proactive referral recruiting can be so helpful (and we’ll get to that in a few pages): you understand the judgment of the referrer, and they have inside information on the person they’re referring. But you don’t always have that insight.

Failing that, college can be a helpful indicator. Top and second-tier colleges, like first- and second-tier private schools, UC schools, other top state schools (for example, University of Washington, University of Oregon, and so on) allow you to draft off of someone else’s authentication. In order to be admitted to these schools, graduates had not only solid acumen scores (SATs, ACTs) but also a pattern of academic achievement to meet GPA requirements. Both are good leading indicators.

By no means is alma mater a sufficient indicator for an automatic hire decision, nor is the absence of a top school an automatic disqualifier. This should be considered as just one term in a scoring algorithm. Beyond just school, look for a historical pattern of achievement academically, professionally, and with respect to extracurriculars. All of these will be good leading indicators.

Resourcefulness

Look for patterns of having figured things out in the past too. What does that look like? It could be a history of starting businesses, clever hacks or creative shortcuts of some sort or another, or meaningful hobbies with a progression of excellence. Sports participation is often a great indicator of resourcefulness as well. Candidates paying their way through college is another great example, as are decisions to move great distances to do something new.

Competitiveness

Competition is an intrinsic part of sales, and there is no better way to look for a competitive streak than prior sports activity. This is especially true of multi-sport athletes who have engaged in competitive athletics from an early age, through high school or, better yet, college. High-end musical or academic competition is also a good indicator.

Coachability

Sales reps will not be perfect when they start selling your product. And there is little worse than reps who think they know what they’re doing, actually don’t, and won’t take coaching to improve, preferring to throw leads in the dumpster. Usually the only solution is letting them go and eating the associated opportunity cost. But this scenario can usually be avoided, and learning curves can be compressed, by hiring sales reps who have experience taking coaching. Competitive athletics, or anything that involves taking coaching in pursuit of the correct way of doing things, are a great leading indicator here.

Likeability, Charisma, and Leadership

While being a persuasive and smart salesperson is required in the early stage, there’s nothing like pure likability, charisma, and leadership ability to give reps a tailwind. Look for leadership positions within teams, clubs, and service organizations, and prior experience winning elections as leading indicators of likeability and charisma.

Detail Orientation

The stereotype of the charismatic, slick sales rep exists for a reason. Sales is about people and persuasion. However, more and more (especially in inside sales), it’s also about methodical execution of multistage processes, precision follow-up, juggling 100-opp pipelines, and CRM excellence. So hiring a big-picture person who can pitch like greased lightning but fails to follow through on down-funnel opportunities amounts to setting tens of thousands of dollars on fire. And that’s not going to work.

How do you sniff this out ahead of time? Throughout the screening and interview process, look for errors in details, like typos and grammatical errors in the written screen and resume. I like to ask in the written screen how candidates organize their lives: Do they use a calendar or to-do list to make sure things don’t fall by the wayside? What does their Gmail inbox look like? Do they archive emails for which there is no next action after they read them? What do they think about messiness and how clean do they keep their desk/room/house? If you think their desk is a disaster, just wait to see what their pipeline will look like…

Persistence

Sales inevitably includes some unpleasant slogs. Look for staff who are used to that sort of thing—to enduring unpleasant, necessary precursors in order to achieve desirable outcomes. Certain types of sports demonstrate this in spades: crew, swimming, cycling, long-distance running, track. Seeing something on a resume like achieving the Eagle Scout rank suggests persistence too, as does a self-started business (provided the candidate stuck with it).

Positivity

Related to persistence is positivity. Even an amazing win rate of 35% means you lose 65% of your deals. And most of an SDR’s outreach will result in people saying, “Not now.” So remaining positive in the face of these micro-failures is key. Moreover, in early-stage startups, there are all manner of setbacks, whether related to fundraising, competition, or larger market currents. Lastly, not all prospects are peaches; being able to grin and eat it in the face of a prospect with an axe to grind will be required. This trait is more observable in the context of interpersonal interaction, so throughout your screening and interviewing process, pay attention to the tenor of candidates’ references to failures or difficult experiences

Teamwork

While individual contributorship and individual responsibility are paramount in sales, in modern organizations with SDR to AE to AM handoffs, teamwork is also important. Sales reps need to rapidly learn go-to-market best practices and share them with their management and colleagues, while feeding market feedback back to the product organization. Prior team sports experience, of course, is the best way to find this, but team environments can show up in other activities as well—like founding a business or participation in service organizations.

There are doubtless many other characteristics to look for—and presence of these traits doesn’t take the place of proper screening and interviewing. But if you look for candidates who embody these characteristics, you’ll have a great head start on a strong interviewing funnel.

Professional Characteristics

When hiring for market development staff, those raw characteristics are probably sufficient. You’re likely hiring folks who are straight out of college, and who won’t have a lot of professional characteristics of note. But as you start to hire more senior staff, you may want to consider prior experience.

Personally, I’m of two minds about this. On the one hand, I’m a huge fan of creating an upwelling effect by bringing on market development staff who are fresh out of college, training them over a 6–12-month period as they become familiar with the market and solutions, and then moving them into closing roles. It ensures that they are inculcated in your culture and system—Gregg Popovich–style—and that they don’t bring any bad habits or preconceived notions to bear.

On the flip side, sometimes you need to scale, or hire those first account executives, and you don’t have time to wait for your bench to grow. In those situations, you can use prior organizational membership as a great heuristic for the characteristics you need on your team.

I’m going to start with the warnings, because I feel that I’ve seen (and made) way too many mistakes of faulty analogy when looking for professional experience that matches what I need.

Industry Focus

Thinking about industry wrong can be a problem. Just because someone sold human resources software, doesn’t mean they can sell all HR/recruiting software.

Instead, when it comes to industry focus, look for those who have sold to the same decision-makers that your org sells to, at a similar price point and budgetary tempo. If you’re selling recruiting software, then people who have previously sold recruiting agency services could make sense. Both sell to the recruiting organization (not HR, which is responsible for time cards and payroll), and both sell something that can be purchased outside of a budgetary or RFP cycle. So be mindful that industry is a more nuanced thing than SaaS or analytics or HR.

Role Execution Focus

Another thing to be wary of is the notion that “sales is sales is sales.” This is not the case. Your organization will likely be focused, to start, on new customer acquisition, the most difficult of the sales exercises. In mature organizations, there is typically more abstraction between roles: account executives do new business acquisition, and account managers focus on renewals and upsells and cross-sells. So if you’re giving someone credit for sales experience, you need to make sure it’s the sales experience you want.

This is also true when considering staff out of organizations where this abstraction does not exist. These are typically legacy sales organizations, like Oracle, or younger, more loosely architected sales organizations like ClearSlide, where reps are responsible for lead generation, appointment setting, demoing and negotiation, and closing, followed by onboarding and later upsell and cross-sell—every stage of the sales cycle. Because the focus of these reps is so heavily split, they may have only a fraction of the necessary experience compared to someone who has been focused exclusively on new business acquisition. Be sure to consider this.

Sales Cycle Tempo Experience Mismatch

Ignoring sales cycle tempo can be problematic too. If your solution is one that requires a long sales cycle, herding many decision-makers and influencers to an eventual conclusion, then hiring folks who are used to one-call closes or, at most, 15-day sales cycles can be a problem. They won’t have the cat-herding experience, and will have muscle memory of high-volume, rapid-fire engagement to work against.

It’s the same on the inverse. If your solution has a more transactional, quick hit sales cycle, with a lower average contract value, hire for the activity required for that: lots of interaction with disparate clients, high volumes of demos on a weekly basis, and management of a pipeline of many smaller deals. Someone who has years of experience shepherding more complicated, slower-moving deals—where a pipeline has a much smaller set of larger opportunities, requiring less disparate activity—will have a lot of baked-in muscle memory to unwind to have success in your solution’s deal cycle.

This isn’t to say that either of these tempos is better than the other. It’s just that they need to be in alignment with the tempo of your solution’s sales cycle—something that you should have a pretty good handle on, since you’ve been doing it yourself. So be mindful of this.

Industry Bellwethers

Similarly, be wary of pulling staff out of the standard industry bellwethers—the monoliths of your space that you’re looking to steal share from. The challenge with these sales reps is that they’ve been selling behind established brands, working with established marketing organizations that drive lead generation, and handling existing contracts that are on renewal cruise control. All of these benefits will be nonexistent in your organization. So if the old saying is, “No one ever got fired for buying IBM,” then the corollary is, “An IBM sales rep probably won’t crush it selling a no-name, startup solution.”

So if you’re a new payroll industry entrant, former ADP people may not be a great idea. Or if you’re a new recruiting solution, be wary of senior sales executives out of a CareerBuilder, Monster, or even LinkedIn—anyone who has become baked into the budget and will expect clients to take their meetings and the renewal to show up on time with a bow on it.

Moreover, the older the sales organization, and the longer the rep in question has been there, the more likely it is they have adopted ineffective legacy behaviors from that organization. Most older sales organizations have poor sales technology adoption practices. They have legacy CRM systems that are hard to use, and thus reps and managers grow complicit in avoiding them. Sadly, this leads to a culture of CRM disuse, which in turns leads to a culture of low transparency and low accountability, which leads to low execution and excuse making.

In lieu of technical adoption, there will likely be less efficient process workarounds to paper over the gap, like time-consuming weekly meetings and line-level managers who spend their time on sales calls alongside their staff. Unfortunately, this consumes time that leaders should instead use on higher-value activities: consuming information from sales leadership, product marketing, and product management and distributing it to their team, or monitoring CRM metrics to spot issues as they show up in the data. Poor technical adoption also tends to foster bad email behavior, like cc’ing management on every action, because there is no trust in the CRM. That quickly leads to overflowing email inboxes that crowd out actually valuable information, like new product releases, marketing collateral, and so on. All of these expectations and behaviors can be very hard to unwind, so be aware of that when considering staff out of organizations that meet these criteria.

​caution​There is a caveat when it comes to more junior staff. Many of these industry bellwethers have the infrastructure to support solid sales training programs and to instrument good sales behaviors, like high calling and emailing activity. So looking there for junior sales staff, like market development reps who are ready to move on to a closing role could make sense. And laggy promotion timelines in these larger orgs can end up leaving staff who are ready for the next step languishing six months or longer beyond when they became capable for that step. Just be cautious that the potential hire hits your other requirements, as many of these larger organizations have a lower bar for other important criteria.

Now that we’ve covered some areas where you’d be wise to use extra caution, there are a couple of places that are often great sources of the professional characteristics startup leaders are after.

Mid-Stage Startups

One place to look is the set of organizations in your space that have hit escape velocity and whose sales staff may be looking to jump onto the next rocket ship. They just finished selling a new, paradigm-shifting solution into an existing market, and thus would be more likely to have success doing so again. So if you’re one of the newest set of applicant tracking systems going after the recruiting market, like Greenhouse or Lever, this could be sales staff out of Jobvite, iCIMS, and so on. It probably isn’t sales staff who are still at Taleo or Kenexa, or selling applicant tracking solutions for Oracle, SuccessFactors/SAP, and so forth.

Customers

Another place to consider for potential sales staff is the customer base that you sell into. If you sell IT infrastructure, the in-house IT administrators who implement and administer your solutions are deeply intimate with the problem space—they live it. Or if you sell recruiting software, recruiters who experience the exact business pains you’re looking to solve can be great fits.

Again, though, familiarity with the space is not sufficient by itself. An IT administrator who is introverted, and unable to conduct high-activity outreach and engagement, is never going to work out. But paired with the other characteristics you’re looking for, this kind of subject-matter expertise can be gold. Former recruiters are great salespeople for recruiting solutions because they not only know the pain points, but they are used to a recruiting workflow that revolves around high-activity outreach, persuasion, and pipeline management—just like sales.

Achievement Characteristics

Once you have identified candidates with the professional characteristics you’re looking for, one benefit of looking at staff with prior experience is that you can ask them for artifacts of the sort of achievement you’re after: quota attainment, activity metrics, and such. One thing to note, though, is that salespeople are used to selling, and spinning anecdotes and data to support their goals—and they will sell you on hiring them. So while their resume or LinkedIn profile may speak to quarters of outside achievement with regards to quota, I’ve seen enough embellished titles and stats from existing and prior staff to know that those self-reported metrics should be viewed with a gimlet eye.

Instead, ask for actual proof. Screenshots of activity graphs and leaderboards, directly from the CRM of a candidate’s organization, are hard to spoof. A truly clever approach I’ve heard of but not used is asking for a screenshot of CRM revenue leaderboards and the candidate’s place in them. This, of course, not only shows you the candidate’s ranking, but also the other top performers in that org, in case you want to recruit them next. Asking for W2s is also a popular approach, but my issue with this is that it’s a top-line outcome; it doesn’t show me the key metrics, like calls, demos, win rates, and so on I’d rather have the underlying data. But generally speaking, something is better than nothing, and something that comes from a third-party source is certainly better than something that is essentially marketing collateral—for instance, the candidate’s resume and LinkedIn profile.

Relationships or “Hiring a Rolodex”

“What about relationships?” you might ask. Isn’t there value to sales staff coming out of organizations where they have worked with hundreds of clients and have their direct-dial phone numbers and email addresses? The notion of hiring a sales professional for his or her Rolodex is a dying one. It may even be dead already. This concept is a vestige of the time when there were no easily accessible alternatives for identifying and engaging with relevant budget holders. This is no longer the case. The sources vary by vertical, but with LinkedIn, Jigsaw/Data.com, and Hoovers/D&B, identifying decision makers requires only rudimentary searching by your lead-generation function.

While relationships with existing clients can be helpful, this value proposition should by no means excuse the absence of other requirements. There is no reason for you to hire someone who fails your other criteria in order to access their Rolodex. A 23-year-old market development rep armed with 500 accounts to call can get you the same thing (while building your bench), so you can give that account executive seat to someone who meets the requirements that are going to drive success. There may be exceptions for industries where the decision-makers can’t be found via other means, but this is generally going to be less and less the case over time, as the world moves toward more information transparency for prospecting.

Articulating and Documenting Your Hiring Profile

When you’re getting started, it can be helpful to consider how other successful SaaS sales organizations approach their hiring profiles.

As you work on your hiring profile, spend some time considering examples in your space. Once you’ve converged on what you’re looking for, document it in a manner that can be easily shared with potential candidates. At the most basic, this could be part of a job post, or a post to your application tracking system’s career site. But you must have this profile, and role characteristics, documented in a way that can be easily shared and consumed, regardless of whether or not you have it up on a job board.

This can be as basic as a Google Doc that has its sharing setting set so that anyone with the link can view it.

Hiring Sources

Now that we’ve discussed the profile that you’d like to see on your sales team, we can talk about where to go to find it—or how to get it to come find you.

It’s important to realize that not all sources of hire will require the same approach or be appropriate at every stage of your growth. Some sources make more sense earlier on, but become less relevant as you grow. And some sources make it easy to home in on higher quality from the get go, while others will require more screening. These are the various sources to consider early on.

Staffing Agencies

When you’re hiring your very first real sales staffer, agencies can be a great source of hire. Staffing agencies are set up to provide you with ready-to-go, qualified candidates who are seeking new roles, and for this, they typically take a fee of 20–30% of that candidate’s first-year salary. While 25% of a ~$60K base salary for an account executive is substantially more costly than a job-board posting or even a staff-referral fee, there are a variety of benefits to this approach.

Firstly, you want to target a sales-specific staffing agency, like The Lions in San Francisco, Betts Recruiting, or Rainmakers. Staffing agencies, like talent agencies, have first crack at all the best talent, because they have crafty recruiters in-house who are both proactively seeking it out and also filtering and vetting that talent. And because salespeople have short average tenures at organizations, they typically stay in close touch with recruiters who have placed them before—meaning that those recruiters have a hot list of great candidates they can engage. So not only do these recruiting agencies have ready-to-go candidates, those candidates are typically pre-vetted and screened known good hires.

Now, this isn’t always the case. Remember that these recruiters work with all manner of sales staff, from candidates who sell ~$1K advertising packages to small businesses at Yelp to enterprise reps who sell ~$1M deals to Fortune 500 clients. So it’s very important that you proactively characterize the profile that you’re seeking (which we conveniently defined above) to the recruiters that you’re working with—and continue to emphasize that profile as you get resumes. If you see candidates that do not fit your profile, it’s very important to drop the boom on those recruiters quickly and correct that. If you don’t, you could end up in big trouble.

​caution​Because these recruiters are paid based on placement, they have a big incentive to work quickly to get a butt in a seat, and to place a candidate that they have in-hand. This is good, because they work with urgency; it can also be bad, because they want to place that candidate quickly, before he takes another role or decides he doesn’t want to move roles after all. So if you are seeing candidates that don’t match the profile that you’re looking for, and you don’t push back, these staffing agency recruiters will smell a pushover. As a result, they’ll not only shove other, less-qualified candidates toward you, but now they’ll actively push their lower-quality candidates your way too, reserving higher-quality candidates for clients they know are pickier. So be stern in maintaining your filter.

Relatedly, make sure you screen well. We’ll talk about screening—written screens and phone screens—below. Don’t skimp on that with candidates coming out of staffing agencies.

Warnings aside, there are great benefits of working with staffing agencies to fill your earliest roles. As noted, they are quick and can help reduce your sourcing workload so you can focus on other things. Eventually, referral recruiting will likely be your highest-volume and highest-quality source of hire. But when you’re first starting out, you don’t have an existing staff of folks to refer candidates. Nor do you have a network, personally, to draw from. Candidates provided via staffing agencies can help you with exactly that—so when you’re looking at these candidates early on, you should consider that network value in your thinking.

If the candidate is coming out of a SaaS sales organization that’s currently peaking, he can help be your future funnel of talent out of that organization into yours and give you inside knowledge as to who was good and who was not. Staffing agencies can also be helpful with respect to compensation details. On the one hand, they have an incentive to enlarge any compensation offer to a candidate they place, since they are looking at a 25% piece of whatever incremental money is paid. On the other hand, they have extremely accurate state-of-the-market compensation information for the candidates they are placing, knowing both candidates’ current salaries and the offers made to those they’ve placed.

There are a number of other things to be mindful of when working with staffing agencies. One is to not skimp when it comes to negotiating fees. While it may be tempting to try to get that agency down to 20% or 17.5% of first-year compensation for their fee, what you’re actually doing is setting up an incentive for them to only show you candidates that they don’t think they can place with other clients paying full freight. And given the opportunity cost of an unfilled, or poorly filled, sales position, this sort of savings can end up being extremely costly. However, what you can sometimes negotiate is a biannual or quarterly payment plan on your hires, which will help lessen the impact on your cash flow.

Another trick is to not work with too many agencies concurrently. Again, these recruiters are motivated, so if you have three or four agencies sending you resumes, you’ll quickly be overwhelmed. I find that one or two is usually enough. It can be helpful to let them both know that you’re working with another agency, as well. It adds some additional motivation.

I learned a trick for constraining resume overload from the CEO of Pure Storage: one in, one out. Tell the agency recruiters that you’re working with that you will only take one resume at a time and that they cannot send you another one before you have given the thumbs up or down. This creates a helpful incentive wherein the recruiter has to be mindful of sending you the best fits for the job, and the highest-quality staff first, lest you get turned off by bad resumes and don’t respond. This cuts down on the incentive to test you with a lower-quality candidate to see if you might take them off their hands. If you have a good working relationship with your agency account manager, have done a rigorous intake meeting, and have a well-specified and documented candidate profile, a lot of these tricks will be less necessary. But proper incentive alignment can make sure that things don’t go sideways.

Later in your scaling process, when you have a base of staff from which to draw referrals, and potentially in-house recruiting staff to do proactive sourcing, you will likely not need agency help as much. But at the very beginning, it can be extremely helpful and worth the cost.

Referral Recruiting

When you’re making your first hires, referral recruiting can be challenging. As mentioned above, you don’t have any staff to refer candidates to you, and you yourself likely do not have a network of sales professionals to pull from. However, once you have established those precursors, referral recruiting is simply the lowest-cost, highest-quality source of hire that you can leverage.

First things first: Make sure that your staff has access to recruiting marketing materials, like the job postings in question. It doesn’t have to be polished, but it needs to be available as a hyperlink that can be emailed/texted/tweeted/shared on Facebook. Here’s an an example, and here’s another one. Additionally, you’ll want your staff to be intimate with the hiring profile that you’re looking for. Just as you communicated that clearly to staffing agency recruiters, you now need to communicate it to your own staff—who should be fairly familiar with the type of person you hire—as your agents in sniffing out talent.

Second, you’ll want to have a referral-recruiting bonus in place. Depending on the seniority of the role, you can do something between ~$2.5K and ~$5K. The goal of a referral-recruiting bonus isn’t to keep referral recruiting top of mind for your staff; you generally won’t be able to get your folks to constantly think about recruiting, because they have their jobs to do. That will have to be your job. However, the referral bonus is there so that when someone does fall into the lap of one of your team members, they’ll work hard to get that candidate across the line.

Lastly, and requiring the most amount of labor, is the recurring activity of both reminding your staff about your hiring needs and engaging in proactive referral-recruiting activity. The best way to keep recruiting top of mind for your staff is to bake it into recurring team meetings. When you’re in team or all-hands meetings, note the open roles that the organization is trying to fill and the successes you’ve had to date. When it comes to proactive referral recruiting, though, it’s going to take some more elbow grease. I wrote an article in First Round Review about proactive referral recruiting; the long and short of it is that sitting down with your staff—walking through their LinkedIn and Facebook connections, flagging those who fit your hiring profile—is a great way to create a lead list of potential candidates and fill your hiring funnel.

When you have successes via referral recruiting, spread them around. Make sure that everyone knows that this approach works, that the best hires come from this source, and that you too can get a nice referral bonus check for helping out!

Even though your quality of candidate will likely be the highest coming from referrals, in that your staff will implement a good filter, it’s still important to maintain the level of screening discussed below. And at the same time, you’ll want to provide a feedback loop to the staff who refer people. If a candidate ends up not being a fit, it’s important to express why, so that your staff can get better at referring good fits. Feedback also ensures that your staff knows that you are executing on their referrals—even if it didn’t end up in a hire this time.

Job Boards

Job boards get a lot of flack. The primary ding against them is that because the candidates on job boards are looking, they must not be any good; if they were, they’d be promoted and happy in their existing organizations. There is some truth to this; there will be candidates that come through postings who are lower quality or less apt to fit your profile. But that doesn’t mean that all candidates that come through postings will be a poor fit. It just means your signal-to-noise ratio may be noisier than it is with referral recruiting or direct sourcing. However, sales professionals are active networkers, career-minded and riser-oriented. They are typically on the lookout for good options, so even the best staff can have an eye open for their next opportunities. Couple this with the fact that the candidates on job boards are active candidates—they are actively seeking new roles—and job boards can be a high-velocity source of candidate flow for your sales hiring.

The one thing that you will have to be particularly mindful of is screening. There is no filter on candidates who apply from your job board posting, so you’ll have to have a screening mindset from the very beginning to ensure that you don’t chew up unnecessary time running poorly qualified candidates through a time-consuming interview process. Even as you write your job ad—using the hiring profile you’ve documented—you should be clear about what your required and nice-to-have options are. You can even make it clear what your screening and functional interviewing (mock pitches, and so on) process is, both to excite those who are eager to tackle a challenge (the folks you’re looking for) and to proactively turn away those who are turned off by that sort of legwork.

Depending on what the candidate flow looks like from a job board, you may have to tune your postings. If you aren’t getting enough candidates, you may need to dial back the commentary on screening rigor; if you are getting a large number of unqualified candidates, you may have to dial it up to dissuade those folks from applying and crufting up your candidate flow. Generally speaking, if you’re getting a dozen or so good-quality resumes per week from a posting, that’s a good rate of candidate flow.

Direct Sourcing

Direct sourcing is the process by which you use candidate databases—like resume databases, professional social networks like LinkedIn, or talent search engines like TalentBin—to search out and proactively qualify potential candidates, and then reach out to those that look like they could match your profile.

On the one hand, direct sourcing is great because you can find exactly those candidates that have the characteristics that you’re looking for, and not waste time on potentially unqualified inbound applications that don’t match your profile. On the other hand, it takes a substantial amount of work, and the potential candidates that you’re sourcing may not be looking for a role (known in recruiting parlance as passive candidates). Not only do you have to search out relevant candidates in the talent pools you’re sourcing from (say, LinkedIn), you have to build a lead list and reach out to those potential candidates. Sound like sales? Good catch. It is.

As such, be mindful of the labor requirements for this sort of exercise. At the earliest stages of your hiring ramp, when you don’t have a recruiter on hand to assist you, you may be better off sticking to staffing agencies, referral recruiting, and job postings. Read more on stage-appropriate recruiter usage in this article I wrote for First Round Review.

However, if you do decide that you want to allocate a few dozen hours to a passive-candidate sourcing campaign, these are some things to think about. Unlike software engineering, design, or product professionals, who don’t spend much time proactively on LinkedIn, salespeople are on LinkedIn constantly. They use LinkedIn for prospecting and learning about their prospects; they spend almost as much time there as they do in their CRM and email. For that reason, they tend to have extremely up-to-date, and well-embellished, LinkedIn profiles, often with direct contact information.

This is a boon to you, as a direct sourcer, because you can use the criteria we established above—company membership, role execution focus/title, and so on—as search criteria, so that only those who match those criteria are returned in search results. Effectively, you can screen via search query. You will likely have to pay for one of LinkedIn’s premium products, but you won’t need the top of the line, LinkedIn Recruiter. And if you tune your search queries correctly, you’ll cut your searches down substantially so that you get under any results limits that a cheaper version of LinkedIn imposes.

Contacting these candidates shouldn’t be hard. While LinkedIn provides InMail access for a fee—and sales professionals will see their inbound LinkedIn messages because they’re strong LinkedIn users—InMails are generally a contact vector of last resort. Email and phone is preferable. Again, because salespeople know that prospects are often looking at their profiles, they will merchandise their work email and phone; because salespeople are typically open to new opportunities (everything’s for sale for a price, right?), they’ll often post their personal email and cell phone too. Make use of that in your outreach. It will make you more efficient and raise your contact rates.

While you are able to hone your searches and qualification criteria more minutely in this fashion, these folks are often not actively looking for a role and may have less motivation to jump through screening hoops. This does not mean that you should not screen them. Instead, this may require a “sell, screen, sell” approach. You will have to start the conversation in a selling mode, getting the candidate excited about the role and the opportunity, until they say, “Yes, I would like to go through an interview process.” At that point, you should run them through the same screening and interview process you’d use with any candidate.

​caution​There are a lot of really bad salespeople at industry bellwethers who would jump at the opportunity to work at an exciting startup—but who turn out to be absolutely terrible and just haven’t yet been flushed out of their organization. I can’t tell you how many LinkedIn AEs failed our basic written screen at TalentBin—typos, grammatical errors, the works. Do you want that person to be your first line of offense with clients? Don’t be the place to which they jump before being pushed.

Screening, Interviewing, and Closing a New Hire

While sourcing for the top of your hiring funnel can stock your pipeline with higher-probability candidates, your screening, interviewing, and closing process is what will maximize your conversion of these potential hires.

I find that a lot of organizations don’t know what they’re looking to achieve in the screening and interviewing part of the hiring funnel. I boil it down as this: the screening and interviewing process exists to authenticate that would-be candidates have the characteristics required for success in your sales org. Authentication is the key. While experience at a prestigious organization, a degree from a compelling school, or a shiny-looking resume may be potential leading indicators of success at your organization, the goal of the screening and interviewing process is to prove it, and once proved, to close the candidate on working at your organization. All the steps in your screening and interviewing process should support that goal.

Screening

Hiring, while of extreme importance, can be a large time suck of inefficiency if you aren’t mindful. This is why I am a big proponent of the use of asynchronous screening approaches earlier in the hiring process—it puts the time cost onto the candidate, while at the same time creating rich “interviewing artifacts” that are better reflections of a candidate’s abilities than a resume or personal statement that has been polished to perfection. This can be all the more important when working with staffing agencies whose incentives are to shove someone, anyone, in a seat. Having a strong screening mechanism in place that doesn’t consume all of your time, and gives you a high-signal outcome on which to base judgment, is all the more important when working with recruiting agencies.

Artifact-Based Pre-Screens

For that reason, I’m a particular fan of implementing screens involving the production of some lightweight work artifact as the first step in my hiring process. One of my favorites is a written screen. It’s not an essay test, but rather a series of a dozen or so open-ended questions that the individual can respond to. I generally give instructions to spend no more than an hour on it, and I keep the questions in the template lighthearted (but pithy enough to allow for the demonstration of critical-thinking acumen). Some of my go-to questions include:

• Tell me about something you’ve built that you’re proud of.

• What do you think about Google Glass?

• What sort of team sports did you play in high school/college? What was your favorite?

• On a scale of 1–10, how messy is your room? Be honest.

• Tell me what you like about sales/recruiting, in your own words.

• Document for me a deal (either sales or recruiting) that went terribly. Be totally honest.

Here’s a set of examples that we used at TalentBin.

What am I looking for in the written screen? Well, modern salespeople spend most of their time communicating value and persuading people to do things in written, spoken, and visual formats—so the ability to clearly communicate is extremely important. An inability to do that with cursory subjects will reveal an inability to do so with your solution. If you can’t explain—with a beginning, middle, and end—something you’ve built that you’re proud of, your favorite bar and why, or how a deal went sideways, you’re going to struggle to do so with our product. While high activity is important for sales, executing those activities with attention to detail is required. Those who can’t demonstrate thoroughness and attention to detail in a task where it is specifically called for will fail to do so in day-to-day work activities.

This is similar to how recruiters look for typos and grammatical errors in resumes—except that those are the most highly polished pieces of hiring collateral that candidates present. It’s much better to use a tool that is specifically designed to catch a lack of attention to detail or thoroughness, in a time-constrained approach. If the candidate can’t be bothered to tell the difference between there, their, and they’re in what has been identified as a test, what will her emails to prospects look like? And what will her pipeline cleanliness look like?

Another artifact-based screen that I like is a mini homework assignment involving account research and voicemail pitching. At the end of the written screen, I tell candidates to leave me a 30-second voice mail, pitching TalentBin as if I were the head of recruiting at Airbnb. Firstly, I like the fact that it’s a composite homework assignment. It requires going to TalentBin’s website and consuming its value propositions, which tests initiative, comprehension, and retention. It also requires qualifying Airbnb as an account and allows for varying levels of execution on the part of the candidate.

A cursory level of execution would be abstractly pitching TalentBin. A better level of execution would be doing account research on Airbnb and their hiring requirements in order to tailor the pitch in question. And I don’t provide my cell phone number—but it’s in the signature of every email I send. And easily available from some cursory Google searching. Email responses asking for my cell phone number receive a raised eyebrow.

I’ve seen other approaches too, like providing some written GMAT questions to be executed ahead of an interview. These could have benefits, too, by providing more rigor, but I’m partial to a guerrilla-style screening test. Its less-than-rigorous outward appearance invites the candidate to act in a way that comes naturally to them, which is what I want to surface. If their natural way of being in the world is to be rigorous, with high attention to detail and execution, I want to see that. If that’s not their natural way of being in the world, then I definitely want to see that too.

Note that these approaches are quite different from video interviewing, where standard interview questions are presented to someone so they can verbally respond to them while being recorded by the webcam of their computer. I’m actually not a fan of this approach, because it’s just a time-shifted, place-shifted version of traditional interviews (or phone screens); those are typically more narrative-based, and less about authentication of the ability to do the work required for a role. And ability is a much more important thing to authenticate earlier in the hiring process.

Like video interviews, though, written screens are asynchronous in nature. I don’t have to be on the phone at the same time as the candidate, and can consume them later, when I have available time for it. Written screens also allow me to take an off-ramp as soon as it’s clear that the candidate won’t make the cut. If the first couple questions make it clear to me that this is someone who doesn’t have the requisite written communication skills or attention to detail to succeed in our sales organization, I can stop and tell the candidate that, while I appreciated their effort, it’s not going to make sense to proceed at this time.

Contrast this to the traditional approach of setting up a 15–30-minute phone screen that requires synchronizing calendars and synchronous communication (which is valuable, but for more nuanced judgments). And, let’s be honest, it’s more difficult to extricate oneself from a phone screen that has gone sideways after five or ten minutes; it’s just human nature to play it out. Written screens help avoid this time suck.

Be forewarned that senior staff will likely be more attuned to a traditional hiring workflow: typically an initial phone screen and, if they pass that, a series of on-site interviews. While you may be tempted to skip written screens of more senior staff based on their pedigree, don’t you dare do it. As I’ve noted, senior experience at a legacy organization can actually be an indicator of all kinds of bad behaviors. If a would-be senior rep is insulted by being subjected to the same screening approach as others, how do you think he’s going to be when it comes to coaching by you, or others? Or new process adoption? Or a transparent sales org? He should be excited that the organization has a rigorous process for identifying great staff and stocks its sales team with high-quality folks that are a joy to work with. And he should welcome the opportunity to show off how great he is.

Lastly, your approach to written screens doesn’t have to be complicated. Our organization (both Sales and Customer Success) uses a templated Google Doc that gets copied and shared with the candidate in question. We give them editorial rights and instruct them to execute it at their convenience and email us when they’re done.

The time savings and insights that are surfaced through the use of written screens in sales hiring can’t be overstated.

Phone Screen

While written screens can be great for efficiently qualifying/disqualifying sales candidates, phone screening can be used to authenticate more nuanced parts of the profile that you’re looking for.

While it’s not the same level of clarity that you’ll get in a mock pitch—more on that later—or in-person interview, a 30-minute phone screen can be helpful for understanding if this person really has the characteristics that were highlighted in their profile (resume, LinkedIn profile, and so on) and demonstrated in their written screen. I like to use this opportunity to authenticate the intellectual acumen part of the profile that I look for.

Specifically, with respect to sales staff, I like to talk about funnel optimization and leverage by asking the candidate to take me through a lead-generation and sales funnel that they’re familiar with. This could be in their existing role, or it could be as simple as a business they worked at in high school, like an ice cream store, lemonade stand, or even a personal-training business (one of my key sales hires was previously a personal trainer!). In the context of this conversation, I ask several key questions:

• What were the inputs to the sales funnel in question?

• What were the characteristics of the prospects, and how could we find more of them, scalably?

• What were the competitive characteristics of the market?

• What would lead to higher conversion of the sales funnel?

And so on and so forth. I try to do this in a rapid fashion to see how the candidate does in a fast-paced environment, how well they do at explaining their answers, and if they are able to apply a problem-solving, scalability-focused mindset to their example.

Once we converge on the constraints in the situation in question, then we get into how to solve that problem. (This speaks to their figure shit out quotient.)

• How would the candidate solve the issue of insufficient customers for the ice cream store, or whatever sales funnel they discussed in their example?

• Could that funnel be made more efficient, for instance by serving more of those scoops of ice cream in a given time interval?

• How could the candidate ensure that customers were happy with the value being provided?

• How do we know that they like the ice cream and will tell others about it?

• How can we do a better job of allowing sales reps to do more demos in a given period?

As I like to say, “If you were the king/queen of the world, how would you solve this?” And that’s an important question, particularly in startup sales hiring. If the candidate is coming out of an organization with a fixed set of processes, they may have a bit of tunnel vision. This is their opportunity to break out of that, and show me that they can break out of it. Because figuring shit out is going to be required in an early-stage sales go-to-market.

I try to execute all of this in less than 20 minutes. (You’ll note that the phone screen I’m describing is longer than the traditional phone screen. That’s because I’ve already confirmed with my written screen that these candidates are worth more time, so I can invest more of my time at this stage to extract better information for my hiring decision.) If it’s a successful exercise, I like to devote the last 10 minutes to questions they have about the organization—this would be the beginning of selling the job. The candidate made it through the initial hiring funnel and profile/resume screening, through written screening, and now through a verbal screen. It’s looking like this thing could have legs, so let’s start engaging with that and getting them excited about the organization, since we’re already on the phone!

You can even throw behavioral components into this, as well. I occasionally like to purposefully miss inbound phone screen calls (I always have candidates call me to test punctuality), so I can see what candidates’ voicemail sounds like, how long they wait to call me back, and if they email me immediately. All of this speaks to proactivity and persistence, which are behavioral characteristics that we value highly.

​important​Unlike the written screen, which leaves an artifact—phone screens don’t naturally leave you with something to review later. It’s critical to either record the screen (for instance, using a presentation software like Zoom or call recording software like Chorus) or take good notes afterward. If you’re going to spend 20–30 minutes on the phone, the least you can do is jot down five minutes’ worth of bulleted notes structured as green flags (things you were encouraged by), yellow flags (things you weren’t excited about), and red flags (things you thought were actually concerning). This way you’ll have data to come back to when engaging with candidates further down the process or when comparing different candidates and making a choice between them.

Mock Presentation Screening

As you can tell, this part of the process is focused on finding opportunities to authenticate a candidate’s ability to succeed in our sales organization. When it comes to market development staff, these screens are typically sufficient to progress candidates to in-person interviews.

But when it comes to staff who are moving from customer-facing presenting and closing roles in other organizations to closing roles in your organization, an incremental presentation screen is definitely called for.

While some sales leaders half-bake this with approaches like, “Sell me this pen” in an in-person interview, I find that sort of approach silly. I’m dealing with sales professionals, so I’m going to have them sell me their existing solution. I can learn about whatever solutions they’re currently selling, their competitors, and so forth with 15–30 minutes of web research, so acting as a mock-prospect is fine; I either ask the candidate to tell me what prospect I am, or I concoct a profile of a prospect I am going to inhabit (like Airbnb in the voicemail example above). I instruct candidates to treat me as a prospect that has agreed to a demo and run the process from soup to nuts the way they would with a prospect; this means sending me a calendar invite (complete with whatever online screen-sharing or presentation software they want to use), executing a full-blown 30–60-minute presentation and demo, and following up with a proposal.

Because this is essentially a mock funnel pass, it’s incumbent on you to pay attention to all parts of the sales and presentation process, looking for both excellence and soft spots.

• Is the calendar invite clear, and does it include all pertinent coordinates for the online meeting?

• Do candidates send you an email ahead of time confirming the meeting? Do they send a reminder?

• How do they conduct the call?

• What pre-call preparation did they do to ensure that they know pertinent details about my mock business (which they likely assigned me)?

• Do they start with discovery questions?

• Do they then proceed to the problem and solution statements in a way that is tailored to what we discuss in the discovery questions?

• Are they consultative in their approach?

• Do they engage in presentation comprehension check-ins, making sure I’m paying attention?

• Are they facile with ROI and business-driver calculations pertinent to my business?

• Do they build agreement through the presentation?

• How do they react when I feign confusion on an important topic?

• How do they handle my objections?

• How do they react to aggressive, verging on combative, questions?

• How do they handle my questions about the competition?

• And, importantly, do they ask for the sale?

Aside from judging how well they execute the pitch from discovery through next steps, this is also a prime opportunity to judge coachability in a rep. If you stop them partway through the pitch, provide them some pointers, and then request to start that section again, you can get a sense of how they take feedback and incorporate it, or don’t. As discussed above, coachability is a key trait in sales staff, and the mock pitch is a great place to authenticate it’s presence or absence.

I’ve done this dozens of times, with folks from Groupon, LinkedIn, Indeed, website hosting businesses, and payroll software businesses. And while I haven’t been the perfect prospect every time, that’s almost a feature of the process. Candidates should know what the key characteristics of a prospect would be and guide me as necessary, which is a good thing to do with a sale, regardless.

Based on the outcomes of this process—after comparing all my green and red flags against the hiring profile I am looking at—candidates will either progress to on-site interviews or end the process there.

Interviewing

Once you’ve progressed through all of your screens, you’re ready for in-person, team-wide interviews. Have you noticed that we’ve been through a ton of screens—resume/profile, written, phone, and mock pitch—before progressing to in-person interviews? That’s on purpose. First, your sales reps will likely be doing most of their work via phone and other telepresence (WebEx/screen share, email, PowerPoint); if a candidate can’t get the point across in those formats in a screening process, moving into face-to-face interactions won’t solve the problem.

Secondly, face-to-face team interviews are extremely time-intensive—not just for you, but for your team. A four- or five-person team doing multiple interviews across an on-site day will double or triple all the time you’ve spent on screening the candidate up to this point. Instead, guard your team’s time against wild goose chases by doing the heavy lifting yourself via a screening process. Keep your reps setting appointments and doing demos instead of interviewing candidates you should have kicked out of your funnel way ahead of time. A candidate shouldn’t be coming on site unless you’re already pretty damn sure that they’re a hire. Otherwise, you’re wasting your team’s time.

That said, there is definitely value to the on-site interviewing process. First, there is the chance that you may have missed something that kicks a candidate out—not likely, but possible. Second, and more important, is the opportunity to get your team’s perspective and build consensus among the team about the validity of the hire. If you are running an organization that is highly mission-driven, passionate, and bought-in, they’re going to want to feel a candidate out themselves. Of course, you should remind your team of the rigorous screening process that candidate has already passed, and that you feel that they meet the bar of the team. But folks will still want to road test the potential hire.

Team Interviews

You should have specific goals for every staff member assisting in the interview process. In our rep hiring process at TalentBin, we have one of our reps who’s particularly expert in recruiting conduct the interview on recruiting understanding and acumen. We have our sales ops lead interview on tooling adoption and technology understanding. And we have one of our most socially attuned reps interview on culture fit. At this point, the only reason a candidate is spending any time with the team is that I believe they’re probably a hire, so I spend my time running the interview process. In my allocated interview segment, I ratchet up the selling part of hiring, answering questions and articulating very directly the organization’s and the sales team’s culture—what’s OK and what’s not OK.

It isn’t enough for each part of your hiring team to know what they’re interviewing for, though. They should have a set of questions and interactions scripted so that they are applying them to each candidate in the same way. Either sit with them to set up these tools or set them up yourself; even a simple Google Doc that can be copied for each new candidate is fine. Moreover, interviewers should have a unified method for recording the outcomes of their interviews. Again, I like the green-flag, yellow-flag, red-flag approach, followed by a summation (strong hire, hire, unsure, pass, strong pass), with rationale bulleted under each category.

​important​When scheduling interviews, I make sure to allocate time specifically for sufficient note-taking after the interview is concluded. Again, if you’re going to take 30 or 45 minutes to interview someone, take five minutes to record the outcome of that effort.

At this point, I’m typically looking for red flags. If someone sniffs out an issue that somehow didn’t arise previously, it’s good to dig into it. However, barring that, and assuming that the interview team gives the green light, we like to do one last pass with the rest of the sales team in a group cultural interview by having the team take the candidate in question out for a beer or two.

Social “Beer” Interview

A beer interview (could be a coffee interview, if you prefer, but let’s be honest—this is sales) serves a few purposes. First, it allows the broader team—outside just the interview team—to interact with the candidate, looking for cultural fit and potential red flags. But it does so in a way that is far more time-efficient than giving each person a 30-minute session. It also allows the staff to share their experience with the candidate, further establishing the norms of the sales organization in the eyes of the candidate (who, if they don’t like it, can self-select out). And it allows the candidate to ask more candid questions in the context of a social atmosphere. This usually helps cement a feeling of transparency, so the candidate can believe what I, and others in the organization, have been telling her. Lastly—and these are partially closing tactics—I get to leverage our high-quality staff, who are great to be around, as a fringe benefit of being in our organization and start building a sense of camaraderie. That can help in the offering process if there are compensation sticking points or it’s a competitive offer situation.

As with all parts of the interview process, outcomes should be documented. In this case, I require all participants (and who doesn’t want a beer or two on the boss’s dime and the chance to meet the new potential teammate?) to give me their feedback in the standard green/yellow/red flag and summary format. Again, I’m mainly looking for red flags from the staff here.

Based on the outcomes of the event, we’ll either offboard the candidate or move toward offering them a role.

Deciding Between Multiple Candidates

Ideally you want to be running a parallel process with multiple candidates to fill the roles that you have open, and biasing toward filling your pipeline to ensure full classes of staff to onboard.

As a result, especially if you do a good job of filtration at the top of the funnel, you may end up with more candidates making it through the bottom of the hiring funnel than headcount allotted. So how do you choose? Well, the good news with sales in an early-stage environment is that it’s all largely greenfield. On balance, it’s far worse to have accounts going uncalled than extra salespeople who may initially consume salary, but then quickly become value-positive. If you’ve done a good job of filtration (and later do a good job of onboarding) and you have sufficient customer lead generation, even your silver medalists in the hiring process should be revenue-positive in short order.

So if you have extra folks who make it through the funnel, and they meet your bar, hire them. More rainmakers are a good thing. They might even buy you some shiny new engineers.

Reference Checking

Once you’ve decided that you want to move forward and have compensation largely agreed (this could come before that step, too, but often candidates want to know what their offered compensation is before they will entertain an offer), you’ll want to do some reference checking.

There are two types of reference checks: a provided reference from the candidate, and back-channel references that you dig up yourself from their network. Both can be helpful, but need to be approached differently. In the first case, the candidate is going to provide the references, so you know they’re going to be good! The challenge here can be getting signal out of those references. All references are going to be loathe to provide anything in writing, but you can usually get folks to hop on the phone for a chat.

My favorite approach is typically asking something along the lines of “On a scale of 1–10, how highly would you recommend the candidate?” At this point, they’re going to drop an 8, 9, or 10 on you. (If lower, wow, you need to find out why.) I let them chat a little bit about all the great things the candidate did, and so forth, and then go for the good information by asking: “What would ____ need to do to become a 10?” This is where you can often get improvement areas surfaced that otherwise would never be talked about. This isn’t saying that these will be kick-out questions, but it’s good information to have.

A back-channel reference entails finding a reference that is jointly known by you or someone on your team and the candidate, who can provide information that either validates or potentially discounts what you’ve learned in the interviewing process. The best way to do this is to look for shared LinkedIn and Facebook connections between you and the candidate, or people on your team and the candidate, and then look for folks who are closer to you and your team than to the candidate—they aren’t in his back pocket, per se. This can sometimes be a crapshoot, and there may not be any, but if you can find one or more, it can help provide more signal to validate your existing decision. These types of references can be extremely helpful, as they may surface potential knockouts that the candidate-provided references have been pre-vetted to hide.

Other approaches where you have more than a few references can involve trying to divine patterns through multiple conversations. If you ask four people, “What are the top three characteristics of the candidate?” you’ll start seeing patterns emerge. And if none of those characteristics include those that the candidate has positioned to you as being key reasons to hire him, that’s a potential flag. Further, if the candidate has cited any particularly large projects or wins, and those don’t show up without prompting, that might be a yellow flag.

Again, the goal here isn’t malevolent or to trick the candidate, but simply to validate our decision to move forward and make sure we have all available information to support that.

Post-Interview Steps

The purpose of screens and interviews is to authenticate that a candidate has the characteristics and skills to do the job, and will fit within the culture of your organization. Once you’ve done that, step on the gas, fast. The sort of high-quality staff you’re recruiting will not be on the market for long, and much like a sales deal, there is a tempo and momentum to hiring. If you let that excitement start to cool off, it will make things much harder for you. You will lose that candidate to another opportunity, and none of the work that you did to authenticate them will be recoverable. Dilly-dallying sets the hard work you’ve done on fire. And it will create questions in the mind of your team—if you can’t close a candidate, should they still be working here? So stop agonizing, Hamlet, and get this show on the road.

If you’re not sure, on the other hand, then pass. “If there’s doubt, there is no doubt” is a helpful way to think about it. Move on to the rest of your pipeline, where you can find someone that you’re truly excited about. This is why recruiting, like sales, tends to be a volume game; if it’s a bad deal, close it and move on.

The hire doesn’t represent just the hire and their salary expense. You will be investing substantial time and energy onboarding him. He will be looked at by his colleagues as a reflection of what is deemed valid in your sales culture. You will be filling his pipeline with valid opps and giving him bluebird deals. If you’re not sure that the candidate in front of you is worth that investment, then pull the ripcord. Trust your process and know that you will find those who are worth the investment.

Compensation

When making an offer, compensation will be a key part of your discussion. Firstly, you need to know what you’re paying. You can’t make this crucial decision based on whatever a candidate asks for or has earned previously.

The better way to think about this is that there is a market for the sort of labor that you need, with an associated market rate. At the same time, there’s a certain value that you’re going to be able to get out of your hires—this will go to quota and commissions. If the mechanics of your market and solution tell you that your average deal size is ~$10K, and that a sales rep can close five of them a month, netting you ~$50K in bookings (at a 20–25% cost of sales), you can’t be paying that staffer more than ~$10K a month in base and commission. So talking to sales staff who are targeting a ~$100K base and ~$200K on-target earnings (netting to ~$16K a month) is simply a non-starter.

This can be hard early on, when you’re not sure of the natural rate of sales for a typical rep. That’s why I like to look at analogous roles at analogous companies—for TalentBin, that was looking at LinkedIn’s SDR and AE teams—for guidance. It’s generally pretty easy to surface compensation specifics at these benchmark organizations, either by asking agency recruiters or by using tools like Glassdoor or PayScale.

Variable Compensation

When it comes to variable compensation, or commission, nearly all sales roles follow the concept of variable compensation derived from bookings, appointments set, or some other key performance indicator. Typically you’ll see a 50% base/50% commission split for new-business acquisition account executives, with more of a 60/40 or 70/30 for market development (appointment setting) or account management farming existing accounts).

Related to this is the concept of quota, and how much revenue your sales staff will need to earn, or appointments they’ll need to set, in order to attain that variable compensation. Quotas are funny things. On the one hand, nothing focuses the mind on taking care of business like knowing that you will be paid for these activities over here, and not for those over there. The notion that sending one more email or making one more call can lead to an extra ~$500 in your bank account does a remarkably good job of motivating those incremental calls and emails.

On the other hand, quotas are somewhat vestigial, leftover from a time when sales activity was not sufficiently instrumentable (via CRM, and sales instrumentation) to help sales management see if sales staff were doing the requisite activities, and doing them well. In pre-CRM sales organizations (or present-day sales orgs with abysmal CRM execution), it was hard to see how many calls, emails, appointments, and so forth were being done by a rep. So the backstop was a macroeconomic carrot/stick combo in the form of a quota: if the rep didn’t do the work needed to generate sales, their missed quotas would demonstrate that, eventually (over a series of quarters) leading to dismissal.

If you run your organization like a modern sales org, that particular function of the quota has largely gone away; instead, you have activity charts and graphs, win ratios, and so forth, which are far better tools for instrumenting and verifying activity. Moreover, this sort of activity instrumentation presents that underachievement information much faster than the three quarters of quota under-attainment historically needed to realize that a rep wasn’t doing his job and should be fired. With all that said, incentivizing and focusing incremental activity is still an important part of variable compensation, so it’s worth implementing quotas.

Setting quotas works better when you have a sense of what the natural rate of sales will be, but looking at existing market examples will be helpful. And if you have been selling yourself, and have a sense of what is achievable, you’ll be able to set goals that are attainable. That last part is key: unrealistic goals will lead to unhappy sales staff who will be looking for new jobs, leaving you without an engine for your revenue growth. In fact, if your would-be hires are smart (and they better be, if you’ve been following along!), they’re going to want to know what proportion of their would-be colleagues are hitting their numbers. It’s all well and good to tell a potential hire a narrative of how she’s going to make ~$200K a year if she hits certain goals. But if she digs in and no one is attaining those goals, you’re going to lose that hire (and likely your existing staff). It’s a bit of a balancing act, which may require retooling as you go.

Let’s look at how the numbers play out for two key sales roles.

SDRs

Compensation for appointment-setting roles depends on what you’re selling. High-end, high-ticket software that is more complicated and hard to set appointments for will be compensated at a higher rate. But a LinkedIn/TalentBin/Box.net/Salesforce SDR in the San Francisco Bay Area will be making a ~$45K–~$55K base with on-target earnings (OTE) of ~$65K–~$75K. For something higher-ticket like Workday, it may be something more like ~$50K, with a ~$75K OTE. The ~$15K–~$20K of variability is based on the number of appointments that are set and subsequently held. Your mileage may vary based on region.

Some people determine variable compensation by counting verified qualified opportunities; if the account executive has the meeting and says that the account isn’t qualified, it doesn’t count. I don’t like this approach because sometimes the aspects of the account that made it unqualified aren’t discoverable from external information (like employee counts, job openings, and so forth), or even on an initial discovery call, and you shouldn’t be punishing SDRs for something outside their control. But it works for some organizations.

The number of appointments that are required to attain the total on-target earnings will vary, again, by how hard it is to set those appointments. If you’re setting appointments with CIOs of Fortune 500 companies for ~$1M average-deal-size opportunities, then one or two a week is probably a good number! For something higher volume and more transactional, it could be 10–15 a week. You’re going to have to experiment. The important thing is that you want your goals to be attainable with the correct amount of quality work.

If an SDR makes 100 calls a day and sends 100 emails, and they are quality and not BS, whatever number of appointments that turns into should be a good target (and you’ll note that quota is the carrot and stick that backstops your activity tracking). You also don’t want to cap attainment here. If you’re paying ~$50 per appointment set and held (this would target 8 appointments set and held per week for ~$20K variable compensation), do not cap the upside. If someone can set 16 appointments for you per week, by all means, go for it!

If you set your quota too low, allowing this upside will allow them to reveal what maybe the true goal should be, so you can later adjust it. Also, don’t require the attainment of the goal in order to achieve an all-or-nothing payout. If you don’t have a lot of data supporting that someone can attain five meetings set and held a week, and that person hits four, and doesn’t get their payout, that’s going to be a demoralized rep.

All or nothing variable compensation attainment is something that far, far more mature organizations can dabble in, like payouts only occurring when a rep attains 85% of attainment in a quartet, though usually this is an account management capacity—like what AEs do—versus lead gen or new business acquisition.

AEs

AE compensation can be a little more complicated. But generally speaking, for account staff who are acquiring new business (hunting as compared to the farming of account managers who are focused on maintaining, renewing, and proliferating existing business), you’ll be seeing a 50/50 split between base and variable.

As with SDRs, this will typically vary based on the average deal size you’re talking about. Higher deal sizes will mean more expensive AEs. Again, to benchmark off a San Francisco SaaS AE—out of LinkedIn, for example—you’d be looking at something like ~$50K–~$60K base, with an OTE of ~$100K–~$120K. Again, for a higher-ticket item like Workday, that could be a ~$100K base, with a ~$200K OTE. Usually you should be able to benchmark against other organizations selling similarly priced software as yours. (And if you’re pulling people out of a related company, their approach to compensation will certainly influence yours.)

Quota and commission can also be challenging with AEs. Once you know what a natural rate of execution is, and thus what a reasonable goal is, it can be straightforward to set quota. Usually you don’t want your entire cost of sales to be more than 20% of your revenue. So if you’re shooting for a ~$100K OTE, with ~$50K variable, that AE will have to bring in ~$500K of bookings a year to keep that cost of sales under 20%. That would mean that a commission rate of 10% would be fine in this situation, and you’d expect ~$42K of bookings a month, or else the rep would be let go. However, it’s important that those numbers are clearly attainable, and job candidates will want to know that they’re attainable. Conveniently, since you’ll be such a CRM-excellent sales founder, you’ll know what your win rates are and how many opps a typical rep gets a month from SDRs, and you can show that either you or others on your team are hitting their goal, making their commissions, and paying their bills.

When setting this number, you want it to be attainable to start, so look at how much you were able to sell in a given interval of time, what your win rate was on new demos, and such, and then figure out what you think that someone whose full time job is just doing demos and closing deals should be able to do. Understand that this is a work in progress, and you can characterize this to reps what the math-based rationale is behind the numbers, and note that if they go above goal, they get paid on that. Like SDRs busting through their appointment goal, AEs who have a ~$40K number, but are doing ~$60K a month is a great problem to have. It pumps them up, gets them excited to recruit others (who will be excited about an environment where they can make great money), and later on, you can choose to raise the goal to be inline with this natural rate of selling, once you have more data from more staff.

If you can, you’ll want to pay commissions on cash in the door, not bookings that then get collected over time. If your reps can sell a ~$10K deal for a year, and have that cash paid up front, that’s great for your cash position. So if you make it clear that you pay commission when the cash comes in the door, that will create an extra bit of focus for those AEs to sell those types of deals, and not let customers negotiate for quarterly payments.

There’s another approach popularized by Jason Lemkin, founder of EchoSign, who likes to hedge against potential low performers and bad hires by pushing the risk onto the rep. He suggests allowing reps to make a very strong upside when they execute well, provided they have covered their own costs.

The broad strokes look like this: Offer a competitive base, say ~$4K per month, or whatever the best alternative is at a comparable company. The only wrinkle here is that reps don’t start making commission until they cover their own cost. They have to bring in ~$5K (or whatever 125% of base is, to cover benefits) before they receive any commission. Then, once they cover that, pay 2x the commission. So, instead of paying 10% of a deal, push the entire 20% cost of sales to the rep. And there’s one accelerator: pay 25% for cash up front.

This creates a large incentive for reps to do up-front deals, because cash is king when you’re a startup—it’s money you don’t need to take from a VC. Importantly, though, you only pay that commission upon receipt of cash, not signing of the contract. You don’t want to be cutting a ~$10K check to a rep for a ~$50K deal that is paid quarterly. He gets his 20% of each paid installment. And if the account becomes a bad debt, that’s on him.

Since a lot of this is a work in progress at this stage, you want to keep things flexible. And typically you want to be understanding and generous with your reps. Early on, you may have to get pulled into closing calls to be the heavy. Just because you’re helping out doesn’t mean the rep should get paid less on the deal. Or if a company goes out of business and doesn’t pay the second part of their biannual billed contract, just pay the commission. As long as you have money to support it, don’t put acts of god onto the reps’ shoulders.

​important​However you structure your compensation, be sure to have a unified plan that is based on market comps and the economics of your business, not gut feel. Typically I prefer to discuss compensation with staff after concluding the interview process that authenticates them as someone we would actually want to hire. If it shows up earlier than that via candidate proactivity, I like to articulate that we pay competitive market compensation for the well-defined roles we hire for, but that we’ll dig into specifics after it’s clear that it’s a fit on both sides, from both a competency and cultural-fit standpoint.

Equity

Part of the attraction of working at early-stage companies is the opportunity for equity upside in the event of an exit. This is typically a meaningful portion of the compensation of engineering and other non-sales staff. With sales, it can be more mixed. Generally speaking, sales is compensated with cash commensurate to the amount of revenue that is acquired. That said, there is value to instilling an ownership mindset in your staff.

Again, you can use market comps for this, but equity for sales staff will generally be substantially lower than for engineering or product staff. Depending on the stage of the organization, a few basis points of ownership, vested over four years, is fair. For management, charged with building an organization, this can be more generous. But the goal of sales is that the compensation you pull from your role is tied to the revenue-attainment value you bring to the organization. Eat what you kill.

Making Offers and Closing Candidates

In terms of offering and closing candidates, I find a two-step process helpful, a verbal offer via phone followed by a formal offer letter once I know the hire is interested in progressing. With the verbal piece, when you’ve concluded whether this is someone you want to bring onboard, email to let the candidate know you’d like to get on the phone to discuss outcomes. When you’re on the phone, let him know the result, whether you’ve chosen to proceed or not.

If you’re electing not to proceed, just say that the team conversed and concluded that it wasn’t a fit. Unfortunately in this litigious world, you don’t want to get deeper than that, for fear that it might come back to bite you. So even if the candidate tries to dig in for more information, politely let him know that you appreciated his time, but that the conclusion when weighing input from all stakeholders was that it wasn’t going to be a fit.

If you are proceeding, the approach I recommend is to let the candidate know that people were positive on him and that you’d like to proceed with an offer, if he’s going to accept it. This would be the point at which you would discuss compensation, and I like to proactively state what we pay, and the rationale associated with it. Some like to see if they can get a deal and ask candidates what they are looking for first, but I find that this starts a conversation that isn’t principles-based and grounded in the economics of the business. Also, if you are scaling many market development reps or account executive roles, consistency in compensation will prevent the cultural discord that can come from having varying compensation for folks executing the same role. Besides, your variable compensation helps ensure that everyone is compensated fairly for outcomes.

If you’ve done a good job on the interview process up to this point, and your team left the candidate fired up to work with a bunch of great folks, he will hop right on it. In that case, you can proceed to discussing start dates, and then send over an offer letter. Other times, the candidate may want to mull over the offer before agreeing, or may come back with a counteroffer. That’s fine as well, but I generally prefer to get verbal agreement before sending over an offer letter for digital signature. I would prefer that the offer letter not be used as leverage against a current employer to drive a counteroffer, or a competing offer from another suitor organization. I simply say, “I only want to send over an offer letter if you’re going to sign it, so will you accept this offer when I present it?”

When it comes to negotiation, I generally prefer not to do it. If the compensation being offered is principles-based, and backed by strong market comp and business economics rationale, then I prefer to state why an offer is fair. There is a large supply of qualified sales professionals in the market, and the potential issues that substantial compensation variation introduces aren’t worth making an exception. With that said, if there is back and forth, you can make sure to sell other parts of the role as well—personal development, the opportunity for career progression, and if needed, you can put a role and salary review on the books six months out from start. All of these are levers that can help you close a candidate, even as you want to hold the line with sales compensation plans that are consistent and principled.

After Closing

Once you’ve got a signed offer in hand, move as quickly as possible to generate and maintain momentum. Try not to leave too much time between when the offer is signed and the start date. After so much time investment, you don’t want second thoughts to creep in. Furthermore, try to target starting classes of staff together. More on this in High-Impact Sales Onboarding and Training, but having three, four, five SDRs or AEs starting together offers all kinds of benefits.

Use whatever time you have, though, to set your inbound hires up for a successful start: That means less-fun things (lining up materials for onboarding and assigning trackable pre-work) and more-fun things, like including inbound hires in team happy hours. They’re not really on the team until they’re at their desks and doing their jobs, the same way a deal isn’t done till the contract is signed and the cash is in your bank account. Treat inbound hires with the same level of urgency.

Sales hiring is the engine of your organization’s revenue success. Treat it seriously and methodically, aiming for high-quality staff who are well matched to the needs of your go-to-market strategy, and you will be well on your way. Treat it haphazardly, and you are sabotaging any chances you have at success.

Further Reading on Sales Hiring

• Hiring, Onboarding, and Ramping Salespeople (Cory Bray and Hilmon Sorey)

• The Sales Acceleration Formula (Mark Roberge)

• Leading Sales Development (Alea Homison and Jeremey Donovan)

• The Sales Development Playbook (Trish Bertuzzi)