Dear SaaStr: What are the most common mistakes first-time founders make when building enterprise sales teams?
The most common mistakes first-time founders make when building enterprise sales teams are surprisingly consistent. I’ve seen them over and over, and I’ve made a few of them myself.
Here’s the breakdown:
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Hiring a VP of Sales Too Early: This is a classic. Founders often think hiring a VP of Sales will magically solve their sales problems. But if you don’t already have a repeatable sales process and at least two reps hitting quota, a VP of Sales will just burn cash trying to figure it out. A VP of Sales is there to scale what’s already working, not to build the engine from scratch.
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Skipping Founder-Led Sales: You can’t outsource the early sales process. As the founder, you know the product and the customer better than anyone. You need to close the first 10, 20, or even 30 deals yourself to prove the product is sellable and to understand the objections, pricing dynamics, and customer needs. Without this, your first sales hires will flounder.
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Hiring Sales Reps You Wouldn’t Buy From: Your first 2-3 sales reps need to be people you’d personally buy your product from. They need to deeply understand the product and be able to sell it in a consultative way. If you don’t trust them with your precious early leads, they’ll fail. Later, when you have a VP of Sales, they can broaden the profile of reps, but not in the early days.
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Overvaluing Big Company Experience: Hiring someone from a big-name SaaS company like Salesforce or Slack might seem like a win, but it’s often a mistake. These folks are used to having brand recognition, warm leads, and established processes. Startups are scrappy and chaotic, and they need people who can thrive in that environment. Look for reps who’ve succeeded at startups a stage or two ahead of yours—say, $10M-$20M ARR.
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Underpaying Sales Reps: This is a rookie error. Great salespeople want to make money—lots of it. If you try to save cash by offering below-market comp, you’ll end up with mediocre reps who cost you more in lost deals than you save in salary. Pay well, and make sure your best reps are earning big commissions.
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Letting Underperformers Stay Too Long: In the early days, every lead is precious. If a rep isn’t closing deals within one or two sales cycles, you need to move on. Keeping them around wastes leads and drags down the team. It’s harsh, but necessary.
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Not Building a Competitive Sales Culture: Enterprise sales is tough. Your team needs to be competitive, resilient, and hungry. If you hire reps who can’t handle rejection or don’t know how to compete against other vendors, they’ll struggle. Look for people who’ve sold in competitive environments before.
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Failing to Align Sales with Marketing and Product: Enterprise sales requires tight alignment across teams. Your sales team needs marketing to generate leads and product to deliver features customers demand. If these teams aren’t working together, deals will stall, and churn will rise.
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Ignoring Churn: Closing deals is great, but if customers don’t renew, you’re in trouble. Make sure your sales team is selling to the right customers—ones who will stick around and grow with you. Misaligned sales incentives can lead to churn, which kills enterprise SaaS businesses.
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Not Having a Clear ICP (Ideal Customer Profile): Enterprise sales is all about focus. If your team is chasing every lead that comes in, they’ll waste time on bad-fit customers. Define your ICP early and make sure your sales team is laser-focused on it.
Building an enterprise sales team is hard, but avoiding these mistakes will save you time, money, and frustration.
