You’re a successful CEO of a founder-led business. You’ve achieved product-market fit that’s showing great potential. And you’re clear on the core customers that will drive your growth. Now you need to hire the right salespeople to take you to the next level. And finding them isn’t an easy task.
Maybe you’ve already hired a sales organisation – but it’s underperforming, badly. And you’re thinking, if I did this again, how would I do it differently? What would my expectations be and how would I measure success?
Whatever your situation, you’re not alone. Identifying the right salespeople for your scale-up is hard. Really hard. It’s a challenge I’ve faced many times in my career as Managing Director of three fast-growing technology companies. And now I’m coaching my clients through it. The same misconceptions crop up time after time.
If you’re a sole founder, it’s likely you’ve been intimately involved in the sales process up to now. Or one of your founder colleagues has taken up the sales slack. You may have got to 10 customers or so but founder-led sales has become a bottle-neck. Let’s face it. If you don’t enjoy it, there’s no incentive to slog away at increasing sales.
Sure, there’s a certain level of intellectual challenge at the start. It’s like learning to weight-lift. You can look at YouTube videos to start off with. At some point, you might need a coach to show you how to do it properly. After a while, you can start to up the weights. But there will come a point where you’re not learning anything new. You’re just lifting weights. And if you don’t like it, you’re not going to carry on doing it. It’s just not your thing.
You can force yourself for a while, but if you don’t get joy from selling, it’s not going to work long term. If you’re CEO of a SAS company, you’ll need to be able to demo your product – I discussed exactly this with Steve Blank, founder of the Lean Startup movement recently for my podcast. Executive selling will still be important. But you need someone who gets genuine joy from sales to do most of your leg-work.
To scale-up a business, you need salespeople who can close. Sounds obvious, but you’re looking for a very specific type of person here. In the tech world that I’ve always inhabited, people tend to think, ‘OK, what type of salesperson do I hate? I’m not going to hire one of them.’ And they end up recruiting someone useless who can’t sell to save their lives.
Only 15% of salespeople regularly hit their target. 15%! That’s not many. And you want one of these top 15% that can close business. Not someone who’s going to manage your existing customers. Don’t think, ‘We need an Account Manager who can do a bit of sales.’ That way lies disaster. Your new salesperson needs to be completely focused on how they get the next 10 customers on-board. And then the next 50 after that.
Look for people who have closed new business for a) a company that looks like yours b) a product that looks like yours and c) a customer with similar problems to yours.
Take a leaf out of Justin Roff Marsh’s excellent book, ‘The Machine’. Look for people who will spend 80% of their time engaged in selling conversations. If you’re setting up a sales organisation from scratch, you don’t need a Sales Manager at this stage. If anyone has ‘manager’ on their CV, bin it.
Similarly, you’re not looking for someone who can generate inbound leads. There are plenty of other ways of doing this – hiring marketing people or out-sourcing to an agency. This is about taking a customer who has a propensity of more than zero to buy your product and persuading them, through the art of sales, to buy. If you’ve genuinely achieved product-market fit, you’re selling something that fits a need. A painkiller, not a vitamin. You just need someone who’s good at persuading customers to buy.
There are people out there for whom you’re offering the perfect opportunity. They’re motivated by influence and status, not money. In fact, HBR found that only 20% of high performing salespeople are motivated by financial reward (more of that in next week’s blog). These people like working in start-ups where they can have more impact. And where there is less stifling bureaucracy.
My advice would be, hire two people from the start. This reduces your risk. That’s assuming you’re in a hurry to grow! If this is the first time you’ve hired a salesperson, you’ll have no process for understanding what good looks like. I’d guess you’ve only got a 25% chance of getting it right. Recognise that you could waste 12 months here – 3 months to hire, 6 months to work out they’re rubbish and 3 more to find a replacement. So hedge your bets.
With two people, your chances of success go up incrementally. One salesperson is likely to be better than the other. Even if they both underperform, you’re likely to hit your sales budget. They will learn from one another if there’s two of them and they’re likely to come with skills and knowledge that overlap. Adding a bit of healthy competition is never a bad thing – it’s good for motivation and productivity. And they won’t be the only person doing their job. There’s someone to bounce around ideas and get some consistency of process.
One thing’s for sure. Your two new hires will need to be comfortable working with ambiguity. You haven’t got everything nailed down and they’re likely to have to make it up as they go along. So hiring someone who’s used to established procedures and playbooks probably won’t be able to hack it.
We were working on a cheat sheet for a client recently around the distinguishing core competencies of salespeople. The guys at Topgrading have tracked a whole host of these and the one that stood out for me was ‘Resourcefulness’. If you’re searching for just one characteristic, this would be the one to go for.
When I read the description, it reminded me that when I recruit, I look for lucky people. And this overlaps with resourcefulness. People who say they’re 8, 9 or 10 on a scale of luckiness are usually A-Players. They don’t blame other people for their failure. They own their success and get on with it themselves. These are the people who won’t constantly be coming to you to ask for things. They work out how to make it happen. Your job isn’t to motivate them. There’s plenty of innate self-motivation and drive.
These are people who aren’t going to need proposals, presentation and swanky decks – they’ll succeed without any of them. They’re experts in the art of relationships and conversation.
As part of your hiring process, get your short-listed candidates to show you their skills. Ask them to take you through their sales process. If they look at you blankly, they’re not an A-Player. A top calibre salesperson will be able to explain how and why they do what they do.
Make sure you put their success into context. In the past, I’ve hired people into sales roles at Rackspace who had been ragingly successful at Dell. But they failed completely with us. At Dell, there was a well-established sales playbook. It said, do these things in this order and use this script. If you follow it correctly, then 9 times out of 10 you’ll be successful.
It’s a different story when there’s no process. Because yours is a new product in a new market with little brand awareness, the things salespeople have done before for bigger, more established companies won’t work. Your new recruits will need to iterate again and again. And they can only do that if they have a conceptual understanding of what they’re doing.
So, test their understanding. Get them to talk to you about their core customer and be awkward. Eventually, at Rackspace, we realised we needed people who could do solutions selling. This is very different from transactional sales. We weren’t looking for order takers. In these companies, customers had already gone through 80% of the sales process digitally before they even talked to a salesperson. Instead, we were looking for people who would proactively ring people and persuade them to buy. Even if they had no intention of doing that when they woke up that morning.
There are give-away clues to the success (or otherwise) of salespeople on their CVs. As well as avoiding anyone with ‘manager’ in their job title, screen out people who have been in positions for less than 3 years. Anyone who’s spent 18 months in a sales job and then left is likely to be rubbish. Look for performance metrics – for every job, you should see their target, attainment and notable wins. And they should be evidently proud of these achievements.
It’s likely that you’ll see previous experience of sales in start-ups or smaller businesses where they’ve had a direct impact. And they should be self-possessed enough to know they love working in your environment because this is where they have the most fun. When businesses get bigger and more structured, this doesn’t play to their strengths.
And finally, make sure they’re not mavericks who won’t fit in with your team. If you word the job ad correctly, you will find the right person. Someone who knows that they’re doing something in your company that no one else can do. And earning status, kudos and respect as a result.
Dominic has spent 14 years working in sales, marketing and business management within the IT sector. He has held executive positions at Peer 1 Hosting, IT Lab and Rackspace. At Peer 1 he built the UK business to £30m run rate in 5 years. He won many awards for creating a great place to work. At Rackspace Dominic built the UK company from four to 150 staff, and increased annual revenues from £595,000 to £25 million in just four years. Under his management, Rackspace was recognised as one of the most outstanding workplaces in Europe, and won several service awards for its Fanatical Support TM. Dominic has a BSc in Agricultural and Food Marketing from Newcastle and a MBA from Sheffield Business School. Dominic is also a regular public speaker on creating great places to work and achieving continuous client satisfaction and an assessor on the Sunday Times Customer Experience Awards.