Lesson 2: Get Your First (Two) Sales Hires Right
When early-stage startup founders are looking to push the gas pedal on their revenue growth, it can often be time to invest in your first salesperson. But where to start? What type of salesperson should you hire? What is their background and skill set? Unfortunately, the answer isn’t a simple one, and with limited seed or A round capital, it’s imperative that you get this first hire right.
I’ve been lucky enough to be a first sales hire myself, hire multiple teams at a billion-dollar technology business, and watch life come full-circle as I made the first sales hires at PatientPop.
You need a plan for greatly increasing the likelihood that your first sales hires are a success and create a blueprint for future hiring plans.
Make Sure the Timing is Right
I can’t emphasize enough how important it is for you to have sold the product as the founder. You need to validate that customers are willing to buy this product from you, and you’ll learn incredible lessons along the way. Outside of having sold the product, a good measuring stick on timing is that you should strive to have a minimum of ten customers and a customer LTV of $5,000. Once you have those two things, you should consider bringing on a salesperson to help you grow.
Look at your available cash and decide whether or not you can afford to hire two salespeople to begin. I’m a big fan of attempting to eliminate false negatives or positives. Two hires won’t give you 100% confidence, but it will give you a better chance for success should you have the correct product-market fit. If you have enough capital to make this investment, I urge you to do it.
Back in 2015, at my current company, PatientPop, we were faced with two impressive sales reps and looking to make our coveted first hire. One of the sales reps looked the part: a big, strong, charismatic guy with previous experience in healthcare technology sales. The other salesman interviewing for the role also had healthcare technology experience, but was a bit more timid, subdued and mild-mannered.
On a hunch, we hired both. Four years later, the latter is a Director in my organization, leading a $15M revenue team. The charismatic one? He lasted a month or so, and I learned so much about what not to do when hiring your first rep from this experience.
Before You Start Recruiting
Before you start your recruiting efforts, you should create a list of notes and assumptions based on what you learned during your time as a founder-seller. I’ve compiled a list of soft skills and sales competencies below that typically translate to success, but you might find that your product or service requires something unique. In order to figure that out, you must go out and sell to your customer.
Once you have, you can start to create a “salesperson persona” for your candidates based on what you learned. A persona should be a combination of soft skills, sales competencies and previous experience.
The number of years the candidate has sold, the sales cycle length, call points, average contract value, etc. Once you’ve created your salesperson persona, it’s time to look at the additional criteria necessary to improve odds of success in the role. Below is a list of soft skills and sales competencies that have worked for me when hiring startup sales reps in the past.
The Non-Negotiable Soft Skills
The first thing I look at when interviewing a potential first sales hire is their soft skills. Why? Because there is a difference between a primadonna top performer who won’t get his or her hands dirty and a hard-working, coachable, creative, positive top-performer. They can both generate revenue for your business, but as your first sales hire, it’s imperative that you hire the latter. Early on there is too much cross-functional communication, difficult times and grunt work to bet on someone who lacks the four soft skills listed below.
Being the first sales hire at a startup company is not easy. These reps must achieve their quota as a meets minimum expectation, but that is typically just the beginning. This rep should be enhancing (or creating) your sales decks, providing customer feedback to the execs, tracking data in Salesforce, A/B testing email campaigns, interviewing future sales hires and so on.
This isn’t just a sales role. Because of that, you need someone with intense work ethic. Look for candidates with military experience or someone who has not just played sports, but captained their team. Dig into their background – did they put themselves through college? When did they get their very first job? Did they work as a teenager to earn money? The background of a candidate will tell you a lot about their commitment and work ethic.
If there is one trait that leads to greatness, it is curiosity. Curious salespeople will generally figure out problems on their own, and as the first sales hire at a startup, there are going to be lots of problems and challenges. As execs, it’s important that your first sales hire navigate these challenges and present solutions to you, rather than relying on you for the answers to every problem.
Curiosity comes through in the interview process. If the candidate did not come prepared with a notebook of questions, then they aren’t the right fit for your company. If they don’t ask multi-layered questions or attempt to “peel back the onion” during your 1:1 interview, then they are simply asking questions because they think they are supposed to. Really curious people can often pester – if the first answer doesn’t suffice, they keep digging. Don’t get annoyed – you’ll be thankful when they are digging into customers with the same veracity.
As discussed above, the likelihood that your first sales hire faces challenging situations is about 100%. This person must be able to maintain a positive attitude through the ups and downs of building out the beginning of a sales team. When the product breaks, or the new marketing campaign doesn’t work, it’s imperative that your first sales hire can continue to push through, unnerved.
In order to suss out the candidate’s attitude, I recommend asking candidates questions about challenging experiences in their previous roles. How did they handle them? You want to hear thoughtful responses that never put down a co-worker, trash a boss or indicate that they always feel like they are right and everyone else is wrong. That type of thinking is cancerous and will infect anyone you bring on your team. Stay away from candidates that talk that way.
When I think about some of the best first hires that I’ve made in my career, I can confidently say that they all have an impressive level of coachability.
Being coachable means ingesting feedback from peers, managers and during customer interaction. Great salespeople use that feedback to create better future performance. Top reps are learning something new everyday, and they are shameless when it comes to asking for coaching.
When you’re talking to candidates during the interview process, listen for things like “I do it my way” or “I have my own process” or “I don’t really agree with the way my boss wants me to do it, so I do X,Y,Z”. These are clear indicators of someone who doesn’t like to learn from others or be coached.
At some point during your interview with candidates, you should put them through small role plays, have them assess their performance, provide coaching and see if they apply it. If you find that the candidate has strong self-awareness of their performance, digests your feedback well and re-applies it during the second role-play, you most likely have a coachable candidate.
It’s crucial that you keep a running scorecard of every candidate that you bring in to interview so you can compare them quickly to other candidates. Your scorecard should be weighted to reflect which soft skills matter and which don’t in your business. By adjusting the weights over time, you’re more likely to continue bringing in candidates that look like your current top performers.
The Importance of Sales Competencies
If you have interviewed a candidate that is coming up aces on all of the soft skills listed above, it’s time to move into the sales competencies portion of the interview. While having a strong work ethic, being curious and positive and working with autonomy are important, you need to assess if they can actually deliver results.
Unless you are hiring a Sales Development Rep fresh out of college, it’s really important to have a firm grasp on the candidate’s previous performance. You should never hire a first sales rep without firm confirmation that they are a previous top performer. Peel back the onion on this question until you are completely and utterly satisfied with their answer.
I recommend asking about the entire sales funnel and then double checking their math to make sure everything adds up. In most sales roles you can simply start at the top. How many calls did they make every week/month? How many meetings did they book? What percentage ended up performing? What was their close rate? Average deal size? If the numbers don’t add up to what’s on their resume, then dive deeper. Don’t be afraid to tell the candidate their math doesn’t make sense and you’d prefer they walked you through their revenue numbers on their own. If they can’t? Pass.
Measurable Sales Process
Sales process is all about the math that goes into being a top performer at different companies. If the candidate you are interviewing is a previous top performer, they should be able to guide you through the sales process they follow at their current job and how they might change it for your role.
In my opinion, candidates that have the best process start by building backwards. For example, if candidates tells you they sell 9 subscriptions each month at their current role, they should be able to easily share with you how they get there.
Here’s what I mean:
Let’s say that the candidate averages 1.5 subscriptions for each account they close. 9 subscriptions at 1.5 per closed account means the candidate needs 6 closed accounts each month.
What’s their close rate? If it’s 25%, then they should be giving 24 demos every month.
What percentage of their demos show up? If it’s 80% then we know they must book 30 demos to run 24.
How many calls does it take to book a demo? If it’s 10 calls, then we’ve arrived at 300 calls per month to book 30 demos.
With 20 selling days per month, the candidate should be making 15 calls per day (or more) to give them the highest likelihood of arriving at 9 subscriptions sold. Pretty simple.
If the candidate is not able to walk you through a process like the one above, then they don’t have one. I wouldn’t say you have to pass, as this is a coachable area, but be aware that it’s something you need to spend time on if you hire the candidate.
Have a Repeatable Sales Methodology
Remember the first two hires I made at PatientPop, that I talked about at the beginning of this post? The one who was charismatic flamed out quickly, and it was one of the biggest lessons in my career. I watch founders hire candidates that “look the part” or are “charismatic” hoping that matter. These things do not matter in sales. I read blog posts constantly that argue the other way, saying salespeople must be charismatic or extroverted.
Bullshit. Some of the greatest salespeople I’ve ever worked with are awkward, introverted and hate networking. Maybe in the “wine and dine” days of big pharma this mattered, but today it doesn’t. Trust me.
Want to know what matters? Sales process. Great salespeople are like NFL quarterbacks. They know what play to call, how many steps to take when dropping back, the routes their receivers are running and when to release the ball. Practice the plays that work and you’re more likely do well.
Sales methodology is simply the system you employ to generate strong, repeatable results. The first sales hire at your startup company should be able to demonstrate a proven sales methodology like SPIN selling, Challenger selling, or Sandler.
If you are a founder that has been selling, you’ve probably started to recognize what story is impactful to your customer, and a great salesperson should be able to take it to the next level by applying that story to their methodology.
Whenever I’m hiring any candidate, let alone the first sales hire, I always give them a test where I supply them with a customer profile and enough information about our product to be semi-dangerous. I generally will give them 24 hours to prepare a narrative and then work through the role play together. If the candidate just feature dumps during this exercise, you’ve saved yourself a tremendous amount of time. This isn’t the right candidate.
At the least, the candidate should be able to tie features to benefits, and benefits to solving customer pain.
Getting Stuff Done
While it’s not one of the three required sales competencies, I had to include, “getting stuff done” in this post, because my top performers at PatientPop are “do’ers”. People who figure stuff out. Get shit done. They don’t sit around and wait to be told what to do – they go out and achieve without having to be asked.
In 2015, the third sales hire I made at PatientPop had almost all of the soft skills and sales competencies outlined in this post, but he did something unique that I thought was interesting. In a time where we had zero marketing collateral, he took it upon himself to create a bunch of one pagers in Canva that were compelling enough to get prospects to lean in and pay attention. That’s taking initiative.
You want your first few sales hires to have this skill to get stuff done when there isn’t anyone else to do it. It’s a time in your company’s life where you need scrappy. You need outside of the box thinking. Whether it’s getting testimonial letters, creating a one-sheeter, taking video testimonials during a close, or hosting a local dinner, the flair for creation and creativity will go far in the early days.
Where to Find Them
I know you might be tempted to go out and hire a veteran salesperson with a rolodex in your industry. I would highly encourage that you rethink this approach. The person you want as your first sales hire should be young and hungry. Most veteran salespeople have been working off of referrals or selling into their book of business for years. Stay away from that.
So where do you find these young and hungry reps that are willing to join your company? You will not find them aggressively looking for a job. Great salespeople are simply not out there looking for new jobs. They are typically making great money, are highly respected and their next job will most likely come through a promotion or personal connection. I haven’t applied for a job in a decade and most likely never will.
Take a look at other companies with similar sales cycles and ACV. Figure out who you know through LinkedIn and make some connections with their account executives or SDRs. Offer to take them to lunch and use some flattery. Tell the salesperson you are the CEO/founder and you’re looking to learn more about how successful companies are building their sales teams.
Make sure that you are trying to identify the top reps at that company. You’ll likely hear the same name pop up consistently. That’s your guy or girl. If you can’t recruit them out, rejection can often be your best friend. Use that rejection to get referrals for other top sales people in their network. Great sales people tend to hang around together.
Finding the first (two) sales reps for your startup company can be challenging, but top performers help you grow fast in the early days. Make sure that you’re putting candidates through an interview process that clearly uncovers whether or not they have the four soft skills and three sales competencies listed above. You will be saying “no” a lot when you do this, but when you make the offer and get the acceptance, you have a much higher likelihood of success.