How to Ensure Your First 2 Sales Reps Actually Work Out

A long-time reader wrote in to ask a question that pretty much everyone asks some variant of:

Screen Shot 2014-08-13 at 2.16.45 PMIf you had to force rank these items in terms of what we should primarily be looking for in these first sales reps, how would you rank them?
– has sold SaaS before (as opposed to selling media/ads, or some other product)
– has sold something of a similar size ticket/ACV (ours is high..$150k-350k ACV)
– has sold something to the same kinds of companies we are going after
– has worked in a startup situation before
Thanks again, have a great weekend.”

These are the right questions.  You can’t have it all, not only in your first reps, but in any of your reps, really.  What do you look for?

Well, later, you can look for a lot of things.  And later, your VP of Sales can do the hiring.

But over dozens of SaaS start-ups that have churned through their first sales reps, I’ve boiled the key criteria down to Just Two.  Here’s all you need to know to qualify your first two sales reps:

  • waitingphone#1 — Would YOU buy from this rep?  Yes, you the founder/CEO.  Later, as you add reps 3-300, you’ll find it takes a village.  And in fact, you’ll find you end up with lots of reps that you wouldn’t personally buy from.  Some are too slick.  Some are too aggressive.  Whatever it is.  And that can work — later.  But not with the first reps.  Because these early leads, they’re so precious.  If you wouldn’t buy from the rep — it will never work.  Because you’ll never trust them.  And when it’s hard, you won’t know why.  But if it’s someone you’d buy from — you’ll know what to do.  Just help.  Be a great “middler” and let her close.  But if you’re second-guessing your first 2 reps, there’s about a 93.4% chance they’ll fail.  There’s just too much uncertainty, and you’ll never let the leads go to a better place.  To a place where they can close at a higher, faster rate.  Don’t let yourself believe sales is some sort of mystery, that some rep you don’t quite believe in somehow knows how to practice.  You know how to sell, at least you know how to sell your product.  You just aren’t great at it.
  • #2 — Does he or she have at least 18-24 months of experience selling SaaS products successfully — on quota?  Later, you can hire all types.  Later, folks that haven’t sold directly before, you can hire them into entry-level roles or SDR roles.  Later, folks that have sold, but not SaaS, you can take some risks there if the rest of the package is strong.  But not in The First Two.  Because the thing is, you don’t know.  You don’t know how to sell SaaS products, not really.  So you simply cannot hire reps that don’t have at least some quota-carrying SaaS experience here.  Later, when you hire a VPS, he or she can mix it up here.

>> So what do you give on then?  The reality is, what you’re probably giving on is The World’s Best, Proven Closers.  You may hire very good reps … but not the absolute top of the pack.  

And that’s OK, in early days.  Because hiring someone that is Good, that You’d Buy From and Trust, That Has Been Trained in SaaS Sales … is going to work.  Better than the world’s best closer that you wouldn’t buy from, that you don’t fully understand.  As long as they are a good closer 50+ hours a week, that’s probably much better than you doing sales part-time — assuming you are still there to help a lot.  Most founders-serving-as-VPs of Sales are great middlers, great demo’ers, but mediocre closers.

You haven’t been trained to ask for the check.  And you don’t like to Hear No.   And you’ll leave (lots) of money on the table just to close the customer.

A good rep, that you trust, that you’d buy from, with at least 18+ months of experience — will do better.  They’ll ask for the check now, this month.  They’re ok hearing No.  And they don’t leave as much money on the table.  They’ll call back the leads you’ll lose patience with.  Many CEOs don’t call back all the leads, not really.  They’ll deal with the headaches of discounting.   Etc. etc.

Boom!  Revenue per lead goes up.  You learn more.  Do this up to $1m ARR, then hire your VPS.

But without #1 and #2 — it’s too risky.  They’ll fail, you won’t trust them or understand them, and you’ll be back to Square One.  You can’t afford that.

Ok now bonus question #3:

  • #3 — Was the last product they had to sell harder to sell than your product?  It’s not critical this be the case.  But if they meet criteria #1 and #2 above, and you’d buy from them … well it sure helps if their last sales job was even harder.  Then it makes even selling your product, which is always hard … that much easier.  E.g., did they successfully sell the #5 vendor in a market?  Or, for example, did they sell a product much more complicated than your product?  Or one with far fewer inbound leads?  If their last sales job was harder, they’ll often struggle.  If their last sales job was easier, they’ll often excel.  It’s like a weight is lifted off them.  And they just fly higher than before.

Finally, note what isn’t in any of the 3 questions above — domain expertise.  Yes, it would be nice to hire someone that knows your industry in theory.  But generally, don’t do it.  Or at least, don’t add points for it.  Domain expertise is a siren that blinds you to whether or not they really have the skills to sell at your start-up.  95 times out of a 100, a rep you would buy from, that has a few years of good experience, that worked somewhere even harder, will work out.  And they pick up the most critical domain expertise within 60 days.

(note: an updated SaaStr Classic post)

Published on November 23, 2020

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