The biggest challenge that every founder of an early stage company faces – is going from product development to sales, most importantly repeatable sales. Of course, there are products that magnetize the market so hard that the company is overwhelmed with inbound queries since day one. However, that’s a rare case. It comes with the wrong assumption that SaaS products are so easy to use and can be tried before making a purchase that they sell itself. Almost always, even with great viral growth, a new product release comes to a very disappointing start and it is up to company founders to sell it.
Rethink the word Sales
The word Sales if often negatively associated with stubbornly forcing someone to buy a product they may or may not need. This is the exact same reason why SaaS founders, tend to hire their first sales associates. They think that customers won’t resist their charisma.
Since it is a very complex discussion and involves a deep industry knowledge and a precise understanding of all technical nuances of the product, generally, the only people that are truly competent are the founders. This attitude towards sales is crucial in startups early days.
If you are a founder or a visionary and cannot sell your product then no one can. And if they do it will be most likely due to a wrong reason and will create bumps in the future.
What are the responsibilities of the first sales reps?
Most of the founders (let’s assume they are responsible for sale), including me, are terrible at price negotiating and get easily lost in finding their way through the procurement process, even if they have the right access, still should be able to sell the product.
Each founders weakness listed above leads to one thing – hiring a sales rep. An ideal rep should be an experienced veteran who will identify and execute strategies to get you in front of the right person in the organization. They will study the company structure, look for strategic initiatives that fit with your product and will find the budget details. They will even conduct the price negotiations. The only thing they won’t do is “sell”, that’s the duty of the founders.
You shouldn’t blame your first reps for beying not technical enought. They don’t need to be. Instead they should be able to:
- Qualify prospects (Find out whether it is a real opportunity or not)
- Mapping a company structure (Identifying the decision makers)
- Connect founders in case if reinforcement is needed
- Pricing negotiation
What’s the difference between a mature and a freshman rep?
A mature sales rep can leverage his/her existing connections. But you should keep in mind that the last thing you want at this stage is selling your product to the customer who does not value it. Not only will they cancel the subscription at some point, but this can also give you an expensive faux marketing signal.
After you hired your first sales reps with the qualities mentioned above, we recommend hiring sales engineers. This allows taking the load of the technical founders. Of course, if your product isn’t technical at all a 1:1 ration (rep to engineer) isn’t necessary. As your sales team growth, a sales engineer ratio can be reduced.
So what exactly is a sales engineer busy with? Since account representatives are the ones that bring unique knowledge about procurement and negotiations (that technical founders know very little about), sales engineers are the ones who formally “close” the sales. Sales engineers rarely write code but have a much technical knowledge about the usage of the product they sell than the engineers who actualy write the code for that product. SEs also have a great understanding of the market they work in and are aware of their competitors strong and weak points.
After you have a sales rep and engineer onboard, start searching for a product marketer. Why? You might ask. It’s simple – a marketer will arm the sales team with material that helps sell. I’m not talking about a “traditional” sales pitch deck, that explains why it’s your product they should buy and why now. Founders should construct a sales deck and continuously polish and perfect it. The problem with sales decks is that they don’t help in scaling up the process. Product marketing ensures necessary and repeatable positioning. The sooner you connect the product marketer to a sales team the more context for positioning they will have. They will also assure that everyone on your sales team sells the same thing to the correct people.
Isn’t that too many people that don’t actually sell? If it is your early stage sales, keep the overall sales team configuration tight until you reach the repeatable sales.
What about a VP of sales?
It seems that it is a common practice for startups to urgently hire senior sales execs who spend most of their time configuring the CRM and carry out processes for predicted scale without the company closing even a single deal. Most of the time these senior hires leave. It is a severe slowdown for a company not only because of financial and time losses but because of an absence of sales culture. They will start selling things they don’t have and will push the developers hard to build that mythical feature to get a sale closed.
A typical answer for when to bring in the VP of sales is when 3/4 of your sales reps are making 3x more sales than planned. It is hard to achieve if you can’t provide a sufficient amount of incoming leads to compensate for the lost deals.
Experienced VPs of sales should be brought in when your sales team is closing deals by themselves have some sort of a repeatable sales model or at least have similar sales cases. They are really valuable at bringing your sales to the next level – expending geography, administering pipeline etc..
Sales start with the founders. If they can’t convince a customer to make a purchase, it’s very unlikely any sales rep will.
Same thing goes to building a basic sales team to move your product. If you can’t do it is doubtfull that any reseller of integrator will. However, those are the right channels to move to after you figured out the direct sales.