Unlike software development, sales is more of an art form than a rote skill, and hiring salespeople is the least objective thing that most startup executives do. There is also an adage, at least in Federal sales, that the first salesperson hired will be fired for lack of production, and the second person will succeed, based on the first person’s pipeline. The sales process at startups is usually an elongated effort as the process is experimental until product market fit is established. To use the military analogy, a startup salesperson has no “air cover”. There are no successes to replicate. And no reference customers. There’s limited marketing material and often no brand awareness. It takes a special person to overcome those challenges and win the first customers.
The first salespeople might have the hardest and most important job at the startup at that time. Hiring for such an important role should go to someone with deep experience in hiring and evaluating salespeople, but founders rarely have such skills.
With nearly 40 years of sales experience and having worked for no less than startups including Databricks, VA Linux Systems, and Silicon Graphics, overseeing hiring for many of them, I’ll try to provide some insights into my best practices for hiring salespeople at a startup.
What do you look for?
Salespeople typically fall into two categories; hunters and farmers. Hunters find new business with new customers, whereas farmers excel at growing existing customers, star-bursting a product across an organization. At a startup company, you’ll want a hunter over a farmer. In fact, avoid farmers at all costs. But being a hunter is not enough. My number one criterion for hiring salespeople at a startup is to hire someone who has previously been successful at a startup. If they’ve never worked for a startup before, pass.
Even if you spend ample energy setting their expectations that they’ll have no “air cover”, it’s a shock if you’ve never done it before. What? No references, no brochures, no demand generation, no event marketing? Bootstrapping a startup as a salesperson is not for the faint of heart. You risk having the candidate leave the company, which is a costly mistake for any company, especially a startup.
You can learn a lot about their startup experience by asking questions around prospecting. After all, if there are no customers, your new sales rep is going to be spending his/her time prospecting. How do you prospect? Where do you get your leads from? What’s your best approach for connecting with those clients? Share examples of how you’ve prospected in the past. What’s worked and what hasn’t?
When you’re prospecting, you need to be relentless. Connecting with clients can be a challenge. This has been exacerbated by the COVID pandemic. In the past, you could call people directly on their work phone. Very often, it was possible to call the company/agency operator and ask to be connected. Since COVID, people work from home and use their unpublished cell phones. You need to be creative. If you know you’ve got the right prospect identified, you need to explore every way in which to contact that person. Relentlessness is the trait you seek.
In concert with “relentless” goes work ethic. Working at a startup is more than a full time job. I always let candidates know that up front, so there’s a complete understanding of expectations. The way that I assess work ethic would be to understand a candidate’s cadence. How many outreaches are you making on a weekly basis? What’s your goal for the number of customer meetings per week? Questions like these will help you assess the determination and desire of the candidate. We’ve all heard the GlenGarryGlenRoss stories to the fact that if it takes 100 calls to get a customer, then 200 calls should get you 2 customers. The quality of the outreach counts, but quantity is critical as well. It takes a lot of energy, motivation, and creativity to get every meeting. It’s essential that your first hires understand that and are willing to make the commitment.
I said up front that sales is more of an art than science. However, there is a process to sales. It usually has stages including prospecting, discovery/needs assessment, qualification, solutioning, objection handling, and closing. I typically ask candidates which stages of the process they’re best at, and which ones can use improvement. A surprising number of the candidates that I’ve interviewed answered the question without a specific mention of one of these well-known stages. That’s worrisome. If they don’t know the stages, then maybe they aren’t truly experienced sellers. Aligning with what I said previously, I’m probing for people here who believe their strengths are on the prospecting side. There are very few salespeople that like prospecting. I’m seeking them out.
The first rule is to try to hire from your network. People that you know, or that are known by trusted colleagues. If you get someone with a personal reference from someone you trust, consider that highly valuable.
Just about everyone, including most founders (excluding guys like Zuckerberg and Gates) have been through interview processes. Yet, I’m often surprised and disappointed that they haven’t established a repeatable processes and best practices for hiring the most important person in the company.
It’s good to get other opinions. Create a consistent team of trusted colleagues that will interview all the candidates. That way, you’re getting to compare and contrast the candidates on a consistent basis. Choose people that you trust and respect and that will dedicate the time. Try to get people from different parts of the business. Leadership, marketing, engineering, etc. because they’ll all focus on something different. Don’t discuss candidates until everyone has interviewed them. Then set up a meeting to discuss the candidate and see if you have a consensus.
Different interviewers should probe different aspects of the candidate’s career and experience. Perhaps one focuses on prospecting techniques, one focuses on teamwork, and another focuses on technical aptitude. These will depend on your startup and your go to market strategy, but make sure everyone knows their responsibility in the interview. I also like to explore why people took certain jobs. If they made questionable decisions selecting their employer, maybe that tells you something about their decision-making capabilities. ￼
I also prefer candidates who try to close me at the end of the call. Afterall, the interview is part of the sales process of selling “you”. If you don’t ask “how do I compare to other candidates that you’ve met with?” or “what potential concerns do you have about my background that I could address?”, then at least you can assess that they may not be strong “closers”.
At Databricks, we instituted a program where a candidate would share their 30/60/90 day plan with the entire interview team as a presentation. We’d give them a basic template and a few days to prepare and they’d present their plan to the team. We learned amazing insights from those plans on how they would approach the territory, the types of prospects that they seek out, and got an appreciation for how the candidate led the discussion, and for their presentation style. Many times, I’d have predetermined that a candidate was great, only to see them fail in the 30/60/90. It’s an incredibly valuable part of the process.
Last, and most importantly, is backchannel references. Backchannel, backchannel, backchannel. It’s the hardest part of the hiring job, and the most essential. Why? Because every candidate can tell you a story about how they crushed their number. And most candidates are going to tell a compelling story. They’re salespeople, after all! I can tell you a million stories about bluebirds (a lucrative sales opportunity that you come across unexpectedly, without much effort) and other ways that less than capable salespeople have exceeded their objectives. Not all companies’ products are equal and not all territories are equal.
Backchanneling is difficult because you may not know someone that knows the candidate. LinkedIn is your friend here. It connects friends of friends. But it may be that you still have no references in common that you can draw upon. In that case, ask the candidate for 3 references. I usually request a former manager, a former colleague, and a customer. As you speak with those individuals, request the names of 3 people that also know the candidate. Now, you have your backchannel.
There are lots of potential landmines in the process. One of the things that I look out for at startups is too much “channel” emphasis. At a startup, you’re unlikely to have a channel and it’s unlikely that you’ll build a channel right out of the gate. This is true for enterprise sales, business to business, based on my experience. Larger, more established companies might depend more on resellers, integrators, and partners to make introductions and pass along warm leads. It’s unlikely for that to happen, even at the hottest startups. It’s just too hard to close a deal and the channel knows that.
Another well-known approach is to hire people with a “Rolodex”. (I might be dating myself with that term). It would seem logical to hire someone that already knows the customer. After all, you’re after trusted relationships. My experience suggests that this rarely works. I’ve seen circumstances where you hire a seller who knows all cyber people in a customer, but you hire him to sell analytics software and the people are entirely different despite being in the same organization. Or you hire someone from a competitor, and he/she is selling their product one day, and your product the next day. That comes off as two-faced and impacts the seller’s credibility. Instead, look for people that know how to create relationships and people who might understand the mission or business of the targeted industry.
Another mistake might be hiring very successful salespeople from well-known companies. You’d think that if you can sell well for AWS, that you’ll be in a great position to succeed at my SaaS cloud-based company. But I’ve seen this fail more times than succeed. Imagine, you call the CIO and you say “I’m from AWS, I’d like to help” versus the same call from an unknown startup. The AWS call gets the meeting with much higher frequency than the startup. And frequently, the sellers that have worked for the bigger companies don’t know how to handle the constant prospecting rejection and don’t have the “relentless” ambition to break through.
Finally, avoid job hoppers at all costs. It’s not uncommon for the tenure of an enterprise seller to be 4 years. Try to avoid those with many <2-year stints without any longer stints in between. Let’s face it. Sales at a startup is a tough game. There are going to be ups and lots of downs. It’s too expensive to hire and lose someone after two years. Especially when the sales cycle might be a year or more. You need to find someone who has a demonstrated history of riding out the lows.
Hiring good salespeople is a time consuming task. Interviewing, meeting with other interviewers, doing 30/60/90’s, and especially doing backchannel references all take a long time. Especially if you decide not to hire the person. Make sure you allocate the personal time that’s going to be required to complete the process. Also realize that these processes can take time. In my experience, it takes 2-3 months to find the right person, and after that, they probably need to give 2 weeks notice. You need to plan at least a quarter ahead. Add to that, at least a 6 month sales process, and you might close your first deal in 9 months. Start early. Hiring a great set of initial hires will set the bar for everyone else that you hire. The initial salespeople will become sales leaders and help build a sales culture that makes your startup the one that everyone wants to work for, ensuring you the best selection of candidates.