Answering your questions about sales hiring

Common questions about early-stage sales hiring

In this week’s newsletter I answer some of the most common questions that early-stage founders ask about sales hiring. Its a timely topic as the economic outlook has improved since the stock market has recovered from last year’s lows.

Here are the questions answered in this newsletter:

• Should I start with a part-time salesperson on a commission-only basis?

• When should I make my first full-time sales hire?

• What should I look for in my first sales hire?

• What results should I expect from my first sales hire?

• How can I tell when I’m ready to add more salespeople?

Should I start with part-time salesperson on a commission-only basis?

On the surface, a commission-only salesperson sounds perfect because it’s like an affiliate program where you only pay for the results you get. However, once you dig below the surface you quickly run into problems:

• To make commission-only sales worthwhile for a seller, a startup needs either a predictable flow of leads or a very large average deal size. Early-stage startups rarely have either of these due to potential customers having low awareness of the product and high levels of risk-aversion to giving a startup a large order.

• A competent salesperson is unlikely to agree to a commission-only deal because it signals to them that you are not investing in their success and are not confident about the commercial viability of your product.

• A commission-only salesperson is less likely to stick to an ICP and bring you customer feedback because they don’t get paid for it. Instead they’ll bring in prospects who they know and who have money but want something slightly different to what you’re selling, pulling your roadmap in multiple directions and creating maintenance debt.

This is why the best practice is for one of the founders to do sales until they’ve established a repeatable process for generating leads and converting them into paying customers.

When should I make my first full-time sales hire?

The short answer to “when” is “as late as possible”. Many founders rush into hiring a salesperson too soon because they a) don’t want to do sales, b) think they suck at sales, c) think that hiring a salesperson will magically solve their growth problems, or d) all of the above.

Before you hire a full time salesperson, you need to have established a repeatable process for acquiring new customers. That means having 3 things in place:

1. A precise ICP that focuses on prospects who are likely to buy from you.

2. A repeatable way to generate leads that match your ICP.

3. A standardized process for converting leads into paying customers.

If you don’t have these pieces in place yet you are better off waiting until your current founder-led GTM is in better shape.

If you rush in too soon you won’t know what kind of salesperson to hire, how to onboard them or how to get them productive. Just as you’d never hire an engineer and tell them to build you a product, you can’t hire a salesperson, tell them to bring you business and expect it to work.

If you need help getting your GTM in better shape you should also look at my early-stage GTM courses or hiring me as a fractional CRO, both of which will get you there faster.

What should I look for in my first sales hire?

There are 3 things to look for. The first is an absolute must-have: