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Updated August 22, 2022Youโre 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.
As Iโve 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 youโre hiring to support. Generally speakingโgiven 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 closingโthe first thing youโll 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 donโt have enough time for sufficient down-funnel follow-up and closing conversations), itโs time to add more account executives. Later, when you have enough customers approaching renewals, itโs time to add account management functionality.
Depending on the role(s) that youโre 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.
Weโll start with the most general components, then move to the specifics of hiring for certain key roles.
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, Iโve 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 repโfungible, coin-operated, cannon-fodder infantry to march into the field. Weโll 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 donโt 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-engineerโhiring the lowest common denominator at a 30th-percentile market cost in order to keep their cost of sales low. But itโs no good for twenty-first-century software sales. The opportunity cost youโre eating using this approach is terrible.
What I look for in potential sales staff, and what I have coached others to hire for, is high intellectual acumen, a high โfigure shit outโ quotient (practical, resourceful street smarts), and a high โgrinderโ 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 marketโthe business models and economics of prospects, the existing solution ecosystem, the competitive landscape, and so on. Itโs also representative of a potential hireโs 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 donโt and canโt understand the business processes and economics of their clients; without that foundation, they canโt 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 aboveโbecause you can have the smartest, hardest-shipping engineering and product organization in the world, but if the folks who take that to market canโt do those efforts justice, youโre in serious trouble.
And while intellectual acumen in your sales staff is required, itโs not sufficient by itself. That intellectual horsepower needs to be leveraged by practicality and resourcefulness. For starters, analysis paralysisโthat hair-twirling noodling you get from intelligence absent practicalityโis 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 isnโt particularly fun. Making 80 phone calls a day isnโt pleasant. Getting shot down on the phone isnโt 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 whatโs 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 itโs 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. Iโve boiled it down for myself to a sort of cheat sheet of the leading indicators of these characteristics.
The best way to get smart sales staff is through referral by people whose judgment you trust. Thatโs why proactive referral recruiting can be so helpful (and weโll get to that in a few pages): you understand the judgment of the referrer, and they have inside information on the person theyโre referring. But you donโt 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 elseโs 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.
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.
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.
Sales reps will not be perfect when they start selling your product. And there is little worse than reps who think they know what theyโre doing, actually donโt, and wonโt 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.
While being a persuasive and smart salesperson is required in the early stage, thereโs 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.
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), itโs 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 thatโs 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 donโt 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 likeโฆ
Sales inevitably includes some unpleasant slogs. Look for staff who are used to that sort of thingโto 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).
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 wellโlike founding a business or participation in service organizations.
There are doubtless many other characteristics to look forโand presence of these traits doesnโt take the place of proper screening and interviewing. But if you look for candidates who embody these characteristics, youโll have a great head start on a strong interviewing funnel.
When hiring for market development staff, those raw characteristics are probably sufficient. Youโre likely hiring folks who are straight out of college, and who wonโt 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, Iโm of two minds about this. On the one hand, Iโm a huge fan of creating an upwelling effect by bringing on market development staff who are fresh out of college, training them over a 6โ12-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 systemโGregg Popovichโstyleโand that they donโt 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 donโt 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.
Iโm going to start with the warnings, because I feel that Iโve seen (and made) way too many mistakes of faulty analogy when looking for professional experience that matches what I need.
Thinking about industry wrong can be a problem. Just because someone sold human resources software, doesnโt mean they can sell all HR/recruiting software.
โexampleโWhen Iโm hiring for TalentBinโwhich sells software into the recruiting part of organizations, and is a fairly transactional sale (perhaps purchased on a budgetary cycle, but just as often purchased off cycle)โit would be a mistake to look for sales staff that have experience selling, say, performance management systems like SuccessFactors, Halogen, and so on, just because they also sell into HR. The sales cycle, tempo, and even value propositions (one is about human capital acquisition and proactivity, the other is about compliance) are substantially different.
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 youโre 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.
Another thing to be wary of is the notion that โsales is sales is sales.โ 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 youโre giving someone credit for sales experience, you need to make sure itโs 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-sellโevery 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.
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 wonโt have the cat-herding experience, and will have muscle memory of high-volume, rapid-fire engagement to work against.
Itโs 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 dealsโwhere a pipeline has a much smaller set of larger opportunities, requiring less disparate activityโwill have a lot of baked-in muscle memory to unwind to have success in your solutionโs deal cycle.
This isnโt to say that either of these tempos is better than the other. Itโs just that they need to be in alignment with the tempo of your solutionโs sales cycleโsomething that you should have a pretty good handle on, since youโve been doing it yourself. So be mindful of this.
Similarly, be wary of pulling staff out of the standard industry bellwethersโthe monoliths of your space that youโre looking to steal share from. The challenge with these sales reps is that theyโve 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, โNo one ever got fired for buying IBM,โ then the corollary is, โAn IBM sales rep probably wonโt crush it selling a no-name, startup solution.โ
So if youโre a new payroll industry entrant, former ADP people may not be a great idea. Or if youโre a new recruiting solution, be wary of senior sales executives out of a CareerBuilder, Monster, or even LinkedInโanyone 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 ccโing 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.
โcautionโThere 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 weโve covered some areas where youโd 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.
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 youโre 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 isnโt sales staff who are still at Taleo or Kenexa, or selling applicant tracking solutions for Oracle, SuccessFactors/SAP, and so forth.
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 spaceโthey live it. Or if you sell recruiting software, recruiters who experience the exact business pains youโre 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 youโre 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 managementโjust like sales.
Once you have identified candidates with the professional characteristics youโre looking for, one benefit of looking at staff with prior experience is that you can ask them for artifacts of the sort of achievement youโre 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 goalsโand 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, Iโve 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 candidateโs organization, are hard to spoof. A truly clever approach Iโve heard of but not used is asking for a screenshot of CRM revenue leaderboards and the candidateโs place in them. This, of course, not only shows you the candidateโs 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 itโs a top-line outcome; it doesnโt show me the key metrics, like calls, demos, win rates, and so on Iโd 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 collateralโfor instance, the candidateโs resume and LinkedIn profile.
โWhat about relationships?โ you might ask. Isnโt 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 canโt 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.
When youโre getting started, it can be helpful to consider how other successful SaaS sales organizations approach their hiring profiles.
โexampleโTalentBin: At TalentBin we targeted new grads out of high-quality universities, like Stanford, Cal, other UC schools, and so on, with a history of achievement in both taking initiative and building things. We also looked for indicators of success in team endeavors and athletic excellence (particularly in those unpleasant grinder sports). Alternatively, we targeted existing market development staff from LinkedInโan industry bellwether in the recruiting marketโwith the promise that those market development reps (SDRs) would have a faster path toward becoming account executives at a fast-growing organization like TalentBin, compared to a slower-moving, larger organization like LinkedIn. We also hired former technical recruiters who had high subject-matter expertise but also the high-activity execution characteristics needed to sell software. We specifically did not pull account executives out of LinkedIn, or legacy sales organizations like Monster or CareerBuilder; these more senior staff were typically inured to selling existing solutions that the market is well aware of (job postings, resume search, and LinkedIn Recruiter) and thus were less suited to presenting a new, innovative product that substantially departed from legacy solutions. They were also typically more focused on maintaining and renewing existing contracts than on acquiring new customers, and relying on an established brand for making contact with customers rather than being a tip of the spear and penetrating and proliferating within accounts.
โexampleโMeraki: A highly successful hardware sales company, Meraki adopted the strategy of pulling high-impact sales staff out of IT value-added reseller (VAR) shops. In those small IT consulting shops, which are largely undifferentiated from each other, sales professionals need to hustle hard in order to beat others out for business. Moreover, because they are dealing with organizations that typically are without IT leadership (CIO, VP of IT), reps are serving in a very consultative role. IT resellers constantly see new technologies come across their shelves, so the ability to understand customer pain and then identify new technologies to solve those problems was paramount for these folks. Lastly, there is a high level of inside-sales execution on the part of these VARs, in order to keep their efficiencies high and cost of sales low in a low-margin business. All of these characteristics aligned with Merakiโs needs and drove sales excellence in the organization.