A while back I wrote a bunch of posts on Sales & Marketing and have been meaning to get back to that theme for a while. Even if you don't have "direct" sales I would tell you that "everything is a sale" including fund raising, hiring, getting press, and doing business development. So I hope these posts will be useful to all and not just those who need road warriors.
If you're interested in recruiting sales people, I wrote on the topic of startup sales people: who to hire & when—understanding the roles of Journeymen, Mavericks, & Superstars.
Evangelical sales—Understanding startup sales people and process.
One of the biggest mistakes I see early-stage startups making is hiring "seasoned" sales professionals or hiring people too senior, too early. Here is my recommended approach.
1. Start by selling, yourself - Okay, not by "selling yourself" but selling, yourself. Reminds me of Eats, Shoots & Leaves. Okay, I'm still self conscious about whether a comma goes there but you get the point.
I see way too many startup founders who don't have experience in selling and probably don't feel that comfortable going to customers and asking for orders. This is probably because many founders are product or technology people. If this is you I think it's really important to get over this hurdle. Spending time selling to customers is the best way to find out what their problems are and how good your solution currently is at mapping to their needs. This only works if you're not a crocodile sales person. You learn by asking.
The mistake many startup people make is they hire a "sales person" to go out and talk with customers so they can do what they're good at which is building product or "running the company." Sales people are a different breed, you say. The problem is that in an early stage business there probably isn't a perfect fit between your early product and a customer's needs. You learn that by showing them your product, watching their reactions, asking them questions about what they'd like to see improved and then racing back to the office to talk with the team about what you've learned and how you can incorporate it into your product plans. Repeat this process 50 times and trust me you'll see patterns.
I was WAY off between my book research about what the engineering & construction market would want (my first company) and what they actually wanted. I only found out through customer meetings.
Also, this goes equally for business development. How can you send some young MBA "biz dev type" out into battle to sign up partners when you've never met with your potential business development collaborators and heard what their goals are and how you can meet them? If you send out the biz dev guy I'm sure he/she will ink deals. That's what they do. But you're unlikely to yield results unless there is a close alignment of benefits for them and for you.
2. Next you need to hire "evangelical" sales people - Once you've started to get alignment between your product offering and what customers want you'll need to hire a sales person or two. You should already have a good feel for the customer pain, how you solve it, how your product differs from competitors, and what the acceptable price points for your product should be. If you don't have a "base camp" understanding of these issues, you're not ready to hire a sales person. If you can't figure all of this out then adding a non-founder sales person isn't going to solve your problems—it's just going to add to your burn rate.
But assuming that you do have a good starting point for sales, you'll need to hire somebody to expand your pipeline of leads, help build customer relations, and to allow you also to have some time for the hundred other things you're responsible for—like fund raising, recruiting, products, customer support, etc.
The next mistake people make is to hire people who have "done it before" in your field and from a big-name innovator in your field. So if you're enterprise sales that might mean hiring people from Oracle, Microsoft, Salesforce, or whatever who have never been at an "unbranded" startup. The skills to be successful at a sales academy company like those listed are very different than those who would work at a startup. If they left an "academy" and worked for a startup before coming to you then they're probably fine.
The specific things you're looking for are: intelligence, ability to think creatively, ability to work with customers on vaguely defined problems, ability to assemble an ROI business case (with a template already created by marketing) and above all else the ability to listen, summarize and follow-through. Early stage selling is way more "evangelical" than process driven. That means you're more often than not trying to get customers to realize they actually have a problem versus their already having budget assigned for a system in your category.
It is a consultative sale. Don't confuse that with hiring "consultants" who make terrible sales people. But a consultative sale means you need somebody comfortable working with a lack of defined structure, process or product. If you hire that person straight from a sales academy they will be hugely frustrated that you don't have pricing sheets, high quality sales collateral, a well-oiled sales process integrated into Salesforce.com and a clear sense of why customers should buy your product.
Having somebody from an academy institution when you're ready to scale is awesome. There are no people like this who know how to crank the sales machine once the product / market fit are aligned. But hire them too early at your peril. IMO at least.
3. Don't bring in the big guns yet—The related mistake I see (and have made) is hiring people who are too senior. I always tell people, "hire somebody who wants to punch above their weight class" (i.e. the person who wants to next level up rather than the person who has already done it). Most sales professionals start by carrying bags. As they become more senior they take on management responsibilities such as planning, forecasting, pipeline reviews, coaching staff, etc. As they get really senior they hire people to help them with sales ops, comp plans and creating marketing collateral.
What you really want are guys like Derek Rey who is doing a tremendous job over at Ad.ly. I had breakfast with the CEO, Arnie Gullov-Singh, yesterday. He was showing me their latest products, positioning and collateral. It was awesome.
I said, "wow, I'm glad to hear that Krista is working out so well as our head of marketing." Arnie, "yeah, she is, but she didn't do this deck. Derek did. He talks with customers, comes home, cranks out a new deck and has it in new proposals within the week." I was blown away by the quality. He's on the front line and hearing what customers really want. And he rapidly iterates that back into product development to rapidly respond to customer requests and has the messages straight into our sales campaigns.
Eventually you'll need sales "management" and either your strong early sales leader can grow into that or you eventually need to bring in somebody with professional sales management experience. Each situations is different. Some people can scale into the roll and others can't. And some of the best sales people also don't want to move into management in the same way that some great technical architects don't always like to move into managing GANTT Charts, work progress and people.
4. Do many sales meetings together - Once you have your initial sales people in place you can't just sit back and review their weekly sales spreadsheets and push them for progress. You still need to be out on the front lines together. They need to hear how you position your company and how your products will help the customers. They need to watch and gauge customer reactions. They need to learn from you and if they're good (and if you're open) they also need to give you feedback on what doesn't work.
And you need to watch them pitch. Avoid the temptation to always jump in and "save" them. Take the opportunity to watch the sales process as an observer. You learn so much from being able to sit back and just watch the body language rather than having to "perform." It's also a vital part of sales training.
5. Don't confuse your early sales success with a scalable sales process—Finally, once your evangelical team is firing on all cylinders and orders are starting to flow in the door, it's easy to confuse this with your ultimate success. I was there. Once I had 4 sales reps cranking so I took it up to 10 and saw cracks in the system. What works early in a company—the evangelic sales—does not scale well.
I often hear early stage founders telling me about their initial sales successes. I've even gone on some sales calls with them to see customer reactions to their products. I find myself often saying to these entrepreneurs, "having watched you I can see why customers are interested in buying. You're very personable, persuasive and you intuitively know their problems. Plus, they know they're dealing with the company owner. Please don't confuse that with your ability to scale this business. Once you're no longer leading the sale it becomes much more difficult without a standardized approach. I learned this the hard way."
And I'll save what I learned for my next post: "Arming & Aiming."
[Image courtesy of LiberalEvangelical.org]
Reprinted from Both Sides of the Table
Mark Suster is a 2x entrepreneur who has gone to the Dark Side of VC. He joined GRP Partners in 2007 as a General Partner after selling his company to Salesforce.com. He focuses on early-stage technology companies. Follow him at twitter.com/msuster.