2 minute read / Feb 4, 2020 /
Mental Models for Hiring Salespeople at Startups
Have you ever sold a product while working at the market leader? How about from the market challenger? If you’ve done both, you know how different the role of a salesperson can be in each of these businesses. having them both, I can tell you that though the jobs have very similar titles, the work is quite different.
The market leader benefits from the strength of its brand. Buyers compare other products to the leader. For account executives, everything is easier. The brand’s strength eases prospecting work. Internal champions prefer recommending the leader to their superiors because it’s easier, increasing close rates. And if that implementation fails, there is lesser downside risk. Salespeople leverage the trust the brand has created.
Market challenger sales are very different. They often require educating the customer on a new way of thinking. The salesperson must convince the buyer not to go with the leader. In fact, this is where the name challenger sale originates. Prospecting can be more challenging because of a lack of awareness. So, salespeople must find different techniques to succeed and develop trust. Sales cycles lengthen, demand more work, and consumer more time.
When you interview salespeople for your startup, do you consider their experience at a market leader or market challenger? How does that map to your business? This is an important mental model to use when hiring salespeople.
Playbook creation versus playbook execution is a second mental model for sales hiring. In very early stage companies, AEs must create selling playbooks and improve them.
How do you sell a new product? Figuring out the motion requires time. How should the team structure the proof of concepts (PoCs)/trials? What should the 30 second sales pitch contain? Which value propositions are the most important?
Few startups have answered these questions at the early stage. Typically, founders and early employees have leveraged their networks to close the first set of customers. Perhaps the business developed the product alongside a handful of friendly businesses in exchange for sweetheart deal (highly discounted).
Transitioning from those relationship-based sales into a more scalable model requires developing a new way of thinking, finessing messaging, and developing a close process that might be novel.
As the business scales, the company will have developed those playbooks. The specification for salespeople evolves to someone who can execute those playbooks effectively.
These are two mental models that are useful in evaluating salespeople and matching them to the stage of the startup.