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Advice for startups
Founder as the sales person?

Founder as the sales person?

Common advice given to founders is to be the sales person in their startup and only hire sales people later.  This makes some sense as the founder is usually the best person to sell the startup’s product/service.  This is because they are passionate about the problem area and really understand the industry.  This makes them one of the most effective people to close deals later in the company’s life-cycle but we are getting ahead of ourselves.
So is this good advice?  Let’s analyze the responsibilities and skills of a founder and a typical sales person for a minute.

Typical founder

  1. Pulled in a million different directions every day.  They wear many hats by filling in the gaps in the company’s staff structure.  This could be marketing, website content, SEO, emails from the landlord, hiring, HR issues, etc.
  2. Typically good at putting out fires, thinking on their feet and task switching.
  3. Really understands the industry, problem area and company strategy.
  4. They are needed by many different people and will be frequently interrupted.

Typical sales person

  1. Sales is a numbers game.  You have to put in consistent, dedicated effort to see results.
  2. You have to work on all parts of your sales funnel consistently to ensure a healthy sales pipeline and consistent sales results.
  3. There will be lots of rejection and chasing to reach the right targets and get their attention.
  4. They don’t understand the industry and problem area as well as the founder but they don’t need to since they can typically pull in the founder as needed.
  5. They are not able to do much other than sales without a lot of hand holding or training.  Your typical sales person will not tackle an HR issue or chat to a patent attorney or respond to a Cease and Desist notice.
Given this analysis, it is easy to see that the founder is a poor fit.  Betting the sales growth of your new startup on your founder’s ability to put in dedicated time for calling sales prospects is crazy.  If you are lucky, they might carve out 4 hours per week to hit the phones.  Your business will never grow in a meaningful way with this strategy.

The Power of 40 Hours Per Week

Hiring a sales person will give you 40 hours per week of dedicated sales time.  They won’t be thinking about other parts of the company and getting pulled into meetings.  Instead they will have a prospecting list and will call on prospects and setup meetings.  Founders might think 40 hours per week is funny because they work 60-100 hours per week but this person will put in 40 hours of sales work Every . Single . Week.  That starts to add up fast and will make a big difference to your sales.  Don’t allow these hires to do other things within the company like marketing, customer service or product management.  Keep them focused on sales, that is how you grow.

What if they are not the right sales person?

Build a profile for the type of sales person that is going to resonate well with your customers, fit your team culture and be easy for you to work with.  For me this has typically meant recent college graduates (since they are easier on budget), enthusiastic and eager to learn (which is good for activity and my preferred team culture).  Most seem to have a degree in marketing and then go into sales.  Not everyone can do sales but there are lots of sales jobs available so people often apply for sales jobs anyway.

What if my sales person quits?

Yes, they are a very high risk area to your new business.  Even if they don’t quit and just take a week of vacation then your sales pipeline will suffer.  You should hire more than one sales person if your budget can afford it and it probably can.  Depending on your sales cycle, you should see some sales results in a few months and they will start to pay for themselves.  If they are not producing after a few months then either fix the problem or let them go so they can find a better fit and hire someone new.

Why not just hire 4 sales people right away?

As long as the following are true then do it:
  1. You have line manager experience and can handle those reports without any problems.  If this is your first time being the boss then start with just one hire and learn to crawl before you walk.
  2. You understand the industry well enough, your product/service’s value proposition and can train your sales people on how to sell it.  Don’t expect them to learn your industry with no help or to produce your marketing material for you.  Be prepared.
Hiring 4 sales people will certainly accelerate your success since you can weed out any weak performers quickly and replace them.  Also your successful sales hires will be paying for themselves in no time.  A common mistake for many companies (even those past startup stages) is that they under invest in their sales teams.

What about the founder closing deals?

We mentioned earlier that the founder can often be the best person at closing deals.  Having a team of sales people will get more meetings so the founder can spend more time actually closing deals.  Over time the company will grow and other people will be able to close deals too.  As a founder be prepared to still get pulled in to some deals years on, maybe your company’s first seven figure deal or even an M&A deal – often a customer just wants to meet the founder and hear the passion from the source. 🙂

 

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