Given that so much has changed in SaaS the past few months, I thought it made sense to update this classic SaaStr post on The Top 10 Mistakes We All Make Hiring Our First Sales Team. Because especially in the boom times of Q4’20-Q1’22, we all made even more of these mistakes. And now, we’re sort of digging out of a lot of them. 🙂
It seems like so many of us just make these mistakes again and again. And again. Make fewer of them, and you’ll scale faster with less stress.
Here’s my Top 10 list:
#1. You hire a sales rep to sell before you can prove you can do it yourself. You have to prove it’s sellable first. You can’t outsource this. Yes, you may be terrible at sales. But you are the CEO. You know the product cold. You can do it. Or you need to find a way to do it. More here.
#2. You hire a VP of Sales to sell before you prove you can do it yourself. You have to prove the process is at least somewhat repeatable before you hire someone to turn up the volume and spin the wheel faster. You have to hire 2 reps that can hit quota before you hire a real VP of Sales. Earlier than that, and they’ll spend a huge amount of money and time applying processes to scale that don’t work yet. More here.
#3. Any of your first 2-3 sales reps are folks you personally wouldn’t buy from. Because then you’ll never trust them with your precious handful of leads, and they will fail. No matter how well they did in the last start-up. More here.
#4. You insist reps #4-400 are folks you personally would buy from. It takes a village.
#5. You underpay. The best salespeople want to make MONEY. It’s sales, after all. If you pay under-market, you get bottom of the barrel. This is a huge rookie error. More here. In fact, in tougher times, you need to make sure your top reps still make a lot of money.
#6. You don’t fire reps that fail in one sales cycle. If you can’t close anything at all in one sales cycle, you never will. A related post here. This is even more important in tougher times, when you really need to concentrate leads on those that can close. You just can’t carry folks that can’t close anymore. They just waste those precious leads.
#7. You ask your VP of Sales to Carry a Bag for too long. Their job is to recruit a great team and hit the overall plan. Not sell themselves, not mostly. Have your VP of Sales own the whole number, the whole ARR plan for the year. Not an individual quota, not for very long, at least. More here.
#8. You hire someone that has never sold SaaS. This can work later, but not in your first reps. They need to understand how to sell vaguely similar products at vaguely similar price points. More here.
#9. You hire because they worked at Salesforce / Box / DropBox / Datadog / Snowflake, wherever. Hire because they can close. Vaguely similar products at somewhat similar price points, from companies at a roughly similar stage. Not because they are one of 5,000 reps at Salesforce that sell a product with $2B+ in revenues, a proven brand, and huge infrastructure behind it. A related post here.
#10. You allow any great reps to leave. You should strive for 0% voluntary attrition, Not to fire the bottom 1/3d. That’s for Boilerrooms. Great sales teams stick together. Great sales teams inspire each other. Great sales teams attract a higher and higher quality of reps as time goes on. More here.
(note: an update of a classic SaaStr post)