The time is probably going to come when you have to build a sales team in SaaS. It may be Day 1 if you have plenty of capital and are selling to large enterprises. It may be X months down the road, once you close a few deals of large enough size ($x,000 ACV) to justify hiring a sales rep. It might be a few years down the road, like DropBox or Slack, when you decided to add a corporate/enterprise edition to your freemium app.
But if it even happened at Slack and DropBox — it will probably happen to you. Hiring your first sales person.
Now you may somehow have enough capital to hire a VP of Sales and a bunch of reps right then and there. I’ll talk about this — a lot — in some other posts. Because I really learned a lot having a simply awesome VP Sales and sales team.
But most likely, you won’t have the resources to hire a whole sales team upfront. You’ll want to start with one experienced rep.
And there’s only one problem with that: no matter how well that rep does, you won’t learn anything. You need at least 2 to learn.
- If your first rep does poorly, you’ll have no idea why. The rep will blame you, your crappy product, your crappy company, your crappy lack of marketing. Which may all be correct. But if the rep is a bad fit, that may be the real reason. You just won’t know.
- If your first rep does well (my experience), you’ll still have no idea why. Does the product sell itself? Is it the rep’s suave phone skills? Is your deal size, and are your customers, representative of the ones you’ll really get in the future? Or is this rep only good at a a certain type of customer — and are you leaving other potential customers behind? You just … won’t know.
I got this advice from one of our advisors with more experience than me here — but ignored it. To save money, and really, in a mistaken attempt to Keep It Simple. So for our first rep, I narrowed it down to 2 guys. One, super smart, super eloquent, who explained our product well. The other, well … less sharp. But great at outbound. At prospecting. Never discouraged. He’d do 50 calls a day, 20 days a month, even if he got 1000 hang-ups.
You can guess I went with the first guy. 😉 And he was (and is) great. I mean, Great. He let me focus on closing a few key strategic accounts, and just banged out the rest. The engineering team worked with him well, they loved his smarts and insights. And the customers love him. He’s still with EchoSign and Adobe to this day, and has done amazingly well.
The only problem was I learned nothing. I mean about building and scaling sales processes for our company, at least. It wasn’t until we finally had a second great rep, that I could learn. That I learned about new segments we could sell into. About how to sell at lower price points, and in higher volumes. That I could compare and contrast. I could guess before, squint at data. But I didn’t know until I had 2 good ones. I didn’t even know for sure why the customers loved him (though loved him they did).
Look, if you’ve been a VP of Sales yourself for 10 years, ignore this. Do it your way that works. But most of you haven’t built or led an inside sales team before. So you’re gonna need to learn.
So even if it seems expensive – hire two. To start. Then learn … and go from there. It will be better, and thus cheaper, in the end.
And once you hire those 2 … here’s how to make sure they actually work out:
(note: an updated SaaStr Classic post)