A while back we put together some of the top sales & marketing mistakes SaaS companies and founders make, especially in the early days. I thought it would be worth a quick update of the post.
We’ve all made many of these mistakes ourselves, myself included. 🙂 I’m even making a few myself again. But if you see yourself making any of the mistakes below, it’s fairly easy to make a course correction. Just do it! It will help.
- Hiring any reps you wouldn’t buy from yourself. This never works out in the early days. Later, once you have a strong VP of Sales, it’s fine, though. More on that here.
- Hiring a “VP” of Sales before you have 2 scaled reps and a repeating process. Never works out.
- Crazy quotas. You can’t set folks up to fail 100% for sure. Especially the first few months, maybe even make their quota simply equal to their salary. Your sales reps need to eat. Ultimately, reps need to bring in 4x-5x their OTE. And your top reps will do much better, even in the beginning. But maybe set quotas in the first year or two that are practical, and just keep the lights on. When 80%+ of the sales team feels like they are doing well, that’s when magic happens in a sales team. It feeds on itself. If 50%+ are failing, that becomes toxic.
- Expecting a closer / in-bound rep to do out-bound. They can’t. You have to hand in-bound folks leads. MQLs. They are no good at generating them. A bit more here.
- Expecting an SDR to close deals. Hire stretch reps if you want, but someone without any closing experience likely can’t close at your startup no one has ever heard of. Unless the product is very cheap and the prospect is close to closed already.
- Hiring just 1 rep. You can’t A/B anything and won’t have any idea why anything works.
- Hiring reps before you close 10 customers yourself. If you can’t …
- Hiring for the logo. Hiring someone from Salesforce, Box, Twilio, etc. not only won’t save you, it’s a negative. Those companies are way, way too big. With way too strong processes and systems in place. And, most importantly, infinitely stronger brands. Yes, Box is SaaS. But Box is at $500m in ARR. That’s not you.
- Hiring any reps who “don’t care about money”. Startups are a journey and you need reps that want to be on the journey. But if they say in an interview they “don’t really care about money” … well … they aren’t salespeople. Maybe OK for customer success. You may like these sorts of folks, their spiel and pitch in the early days, because it sounds aligned and customer-centric. Hiring them may be comforting. They just won’t be able to close, that’s all. So don’t hire them.
- Hiring anyone for “demand gen” whose #1 job before wasn’t … demand gen. Demand gen is critical. It can’t just be something that once, you sort of worked on. What you probably need is not a VP of Marketing at first, but mainly, a VP of Demand Gen. That has to have been her/his last job. And she has to have done it well. In any event, whomever you hire to do demand gen — make 100% sure they live and breathe it. And ideally, at your target ACV / deal size.
- Hiring a mediocre PR firm. $8k-$15k a month down the drain for nothing. Only the very best folks (and very best PR) are worth it. Only a handful of firms can really get you the placements you want. $15k a month to be in some third-tier blogs you’ve never heard of? Not worth the soft or hard costs.
- Hiring a brand marketing firm. See prior point. May make sense later. But in the beginning, you have to figure out who you are, and where you sit in the universe. You can’t outsource this.
- Hiring lots of “agencies”. See above. Get rid of this marketer. If your head of marketing’s first actions are to hire a bunch of agencies, that’s the wrong person in SaaS.
- Hiring too junior of a marketing person. If they’ve never had a true revenue commit (see below), or owned a number, they are too junior. Do not save money here.
- Outsourced content marketing. OK, this is sort of OK as long as you don’t expect much. But if some 3rd party is writing your content, don’t expect too much. Including not too many leads.
- Way too much SEO + SEM talk. Both are important, but in SaaS, both likely will be relatively minor sources of customers.
- Hiring a B2C marketer for SaaS. Related to prior point. The skills are not that portable.
- Doesn’t make a lead / opportunity / pipeline / revenue commit. If your head of marketing won’t commit to a number, that’s not a SaaS head of marketing. If she or he won’t sign up for a number to hit in her first quarter on the job — she/he never will. Move on. More in this classic SaaStr post here.
Hiring is hard. Firing is even harder. But if a sales or marketing resource simply can’t get the job done, move on quickly. Otherwise, you are just wasting leads and time. Keeping a seat warm doesn’t help here. Your revenue per lead just goes down. Better to focus what is working on the handful of folks that can deliver until you have more folks that can do the same.