Mark Roberge, the Chief Revenue Officer at Hubspot, has spent 20 years in startups. As he told me a few days ago, he has observed the lack of sales management and sales execution skills as one of the most consistent deficiencies limiting the potential of early stage SaaS companies.
Sales execution deficiency manifests itself at roughly the same time as product market fit. There might be 20-30 people at the startup which is generating about $1-2M in ARR with 2-5 salespeople. Most of the time, this startup is the first sales experience for both the founders and the sales people.
To succeed from this point, the company must cross the sales leadership chasm: recruit an ever-larger sales team, manage and coach them, and mechanize their sales team to grow quickly from $1-2M in ARR to $50M. The first step is hiring a sales leader.
As Mark told me, “Most founders fail to understand that 95% of sales leaders will implement exactly the total market strategy they employed at the last company.” They will hire the same people from their network, structure the compensation plan identically, and apply the same sales processes and strategies.
Frequently, the first sales leadership hire is the hardest, because it's difficult to ascertain the right characteristics of the ideal candidate. Mark shared his three top questions he advises founders to ask head of sales candidates during the recruitment process. They are:
- Knowing what to do about our business, what kind of sales methodology would you run? And how does that compare to your previous role? What are the differences between your previous company and this one?
- What kind of salespeople would you hire, and how do they differ from the people you have hired in the past?
- How would you structure the compensation plan to meet the needs of our business?
When interviewing head of sales candidates, founders should have decided the kind of sales model they would like to exploit, whether inside sales, field sales, freemium, or channel - or some combination. During the interview process, they should explain to candidates the nuances of their sales processes to better understand how candidates would adapt the processes they know to the uniquenesses of this particular business.
In these interviews, founders and board members should determine whether or not a candidate can combine what they have learned to previous roles, and the new information about this particular company, to forge an alloyed go to market strategy that serves this business well. The right candidate needs to be an alchemist, someone who is willing to experiment and tinker with the model, not just copy a previous model by rote.