How to hire your first sales team

For the most part, you can probably do founder-led sales past $1M ARR. Maybe even until $2M ARR.

But at some point along the way, you’re going to start maxing out. Leads will start falling through the cracks. You won’t be able to book sales calls for the next day because your calendar will be too full. You’ll need to continue doing outbound to stabilize lead growth.

It’s going to be too much for a single person to handle.

Before you reach this point, you should avoid hiring sales reps. But after you reached this point, you’re impacting your growth if you don’t hire sales reps.

In this newsletter, I’ll go through what you need in order to successfully bring on sales hires to help you out.

Table of Contents

• What needs to be true before you hire:

• How to hire a sales rep

  • Creating the right job profile

  • How to interview sales reps

• What to do after you hire a rep

What needs to be true before you hire:

A lot of founders rush their way to hiring in sales. There needs to be a few conditions that are true, or your sales reps will be struggling, and everyone will be frustrated.

• You need a predictable lead channel outside of intros in your network. And that lead channel needs to be growing every week. And by leads (at least from the sales front), I’m talking about meetings booked in your calendar. If that number is consistently going up every week, you can start thinking about bringing on a sales rep.

• You need to have closed deals yourself. More than 10 (even if you’re enterprise). If you’re SMB, likely closer to 50 deals yourself first (sometimes more). From those deals, you need to have recorded your steps. How did you demo? How did you pitch? How did you qualify? What discovery did you do? How are you following up? You need an understanding of why your prospects buy. Because you’ll need to teach this to someone.

• You need some indication of early product-market fit. Sales is much more successful if there’s a pull from the market. If you have happy customers who are renewing, you know why they are renewing, and have the ability to find more of those folks - you’re in a good spot to hire.

The exact amount of ARR you reached matters less than the conditions I just outlined. But in my experience, this usually ends up at around $500k ARR for SMB, $1-2M ARR for mid-market, $2-3M ARR for enterprise.

Before the conditions above are true, your money is better spend in hiring demand-generation marketers. Or maybe spending a bit more on engineering resources to close the product gaps you uncover doing founder-led sales.

How to hire a sales rep

Let’s focus the next bit on how to hire. There are a couple things you need here: creating the job profile + how to interview.

Creating the right job profile

Hiring for sales is insanely hard. If you get it right 50% of the time, you’re doing pretty well.

The reason it’s so hard to hire for is that there are too many different combinations of sales processes that exist. Inbound vs outbound. PLG/Sales-assist vs SMB vs Mid-Market vs Enterprise. Competitive vs new market. Single product vs platform/suite of products. The list goes on and on. Then you multiply all the different combinations together, and you can quickly see how difficult this can be.

Similar that if you’re hiring a python developer, you need someone who can code in python. There are different sales “languages” like this that you need to consider. So hire the wrong ones, and they’ll fail.

Your job profile and job description should reflect the conditions of your market and startup, and the skills you need to be successful.

These skills are derived from your sales process. The methodology you use (like FOUNDER or MEDDPICC), the cycle lengths, the types of companies you sell to. The type of product you sell, the steps in your process, how you compete. It all pulls from your sales process.

So if you haven’t spent the time doing founder-led sales, and worked on figuring out why customers buy from you, you’re playing a guessing game when it comes to hiring.

Let’s pretend you’re an SEO tool that does website scraping. It’s a pretty well defined space - your market already uses something. Let’s pretend you have an SMB motion and a mid-market motion for a larger-tiered plan. Let’s pretend most of it is inbound. Here’s how I would write a job description for a sales rep:

• Experience selling in a highly-competitive, well-defined market. Most deals are rip-and-replace.

• Experience selling at a startup where the product isn’t the most well-known brand in market.

• Comfortable closing deals quickly, with sales cycles ranging from 10 days to 60 days on average, and deal sizes from $2k-25k per year.

• Meticulous at following-up with inbound leads quickly, and managing a high volume of prospects with lots of deals in your pipeline.

• Used a discovery framework like SPICED or Sandler in the past.

• Leveraged a repeatable process from lead identification to close.

Your job description has to match your selling condition. In a case like this, if you hire someone that sold enterprise deals (6 figures at 6+month sales cycles) for a well-known brand, they would fail miserably.

The experience and skill you hire for needs to match the market you’re in, your product, your sales cycle, and the reality of selling your product.

A sales rep’s job description should never be about “figuring this stuff out.” They won’t. They’ll get frustrated that they’re not making enough money and leave.

How to interview sales reps

I’m not going to go into extreme details here, but there are a couple things that really help.

It’s easy for a sales rep to embellish their results. Also some reps who have amazing numbers might still not have the skills you’re looking for.

What you want to understand in the interview process are two things:

• How they achieved their number

• How they learned or progressed over time.

What I like to do here, and where I got the most success with hiring, is using a chronological interview that digs deep into deals they’ve closed.

Don’t start with their most recent job. Go back to their first sales job. They will try to talk about their most recent stuff, but try to keep them on track.

Then ask them to recall a deal they closed. Then “walk you through” how they closed that deal - how they got the lead, how they qualified it, what steps they took in their process, what challenges they encountered, etc.

Then ask them to do it a second time.

Then ask them to do it for A THIRD DEAL. I know this sounds like a lot of digging, but trust me it’s important. Hiring the wrong person in sales can tank your company. You’re trusting someone with the revenue-generating part of your business, your oxygen. It’s significantly important, so you need to put in the rigor.

The reason to do this 3 times is that it’s easy to remember your best deal. You might have 2 that you can share. But only the best folks who consistently close deals can give you 3 without skipping a beat.

And what you’re trying to assess in those deals is repeatability. You want a pattern. Are they using a selling system like Sandler or SPICED. Are they executing the sales process with the same steps. Are the leads coming in the same way. Are they all around the same size, same sales cycle length.

You want someone in sales who can be a bit predictable.

For progress, you want to see how they stack rank throughout the team, and how they improved from job to job. There are a couple ways you can do this.

One is ask them where they ranked on the team. Then asked what the 1st place (if they weren’t in first) did differently than them. Then listen for self-aware answers. You don’t want to hear blame here (like I had a bad territory, they got more inbound leads than me, etc). You want them to recognize the skillset they were missing. And then you can ask them how they adapted since.

The other is to ask them about what their colleagues or manager would say would be a skill they need to improve. Again here, you want folks who are self aware.

Sales is a life-long profession that requires constant improvement in skills, mindset, and behaviour. The folks who are actually good at sales know that they’re not perfect, and know where they need to get better. That’s what you want to understand.

If you defined the profile correctly, you’ve teased out their sales cycles and they match your conditions, and the rep is self-aware about improvement, they’re probably a good hire for you.

What to do after you hire a rep

This topic can be large - I could write 100 newsletters on sales onboarding, enablement, coaching, and management. So I’m going to cover the highlights. If you want more info on this, just reply to this email and I’m happy to answer this question. Or book a free coaching call.

• There’s a formula to onboarding your sales rep. You need to reverse-engineer knowledge from milestones, and drip feed information as they’re getting into a flow. Takes a few times to get this right, but you can at least be in the right ballpark the first time if you know the formula.

• The formula for onboarding is Market Knowledge > Customer Knowledge > Product Knowledge > Sales Knowledge.

• When they’re learning about your company, they should first get familiar with the industry. What industry are you in, who are the major players, why does this industry exist. Then knowledge about your customers - what types of companies, what types of roles, what are the jobs to be done you help with, why are these jobs painful today. Listen to as many prospect and customer calls here. Once you have the context of the industry and customer pain, dive into the parts of your product that helps relieve this pain. They don’t need to know everything. Then you pull all of this into the sales process - how to pitch, how to demo, how to run the steps, how to use your CRM, how to write a contract. Don’t teach them how to generate a quote in week 1 if they’re not going to need it until week 8. Stagger this out as they’re running sales cycles - people learn better if they can learn + do at the same time. Avoid the firehose.

• How you drip feed this info depends on your different milestones. So if you want them to hit their first monthly quota in 6 months, then when do they need to hit their 3rd deal, 2nd deal, 1st deal? When do they need to have their first contract out for signature? When do they need to have their first demo? First intro call? All of these milestones need to be mapped out. Then you add the information in between - with likely a 1-2 week “bootcamp” for industry + customer + product.

• REMINDER: A sales rep will never ramp faster than your sales cycles. A lot of founders get disappointed here. They want reps to close their first deal in 30 days when they’re average sales cycles are 65 days. The math doesn’t math.

• Average rule of thumb is 1 sales cycle + 90 days for a “ramped” rep. And by ramp, I mean hit their first realistic monthly quota. If your average cycle is 60 days, don’t expect a sales rep to be ramped until month 5. You need to account for this when hiring. If your average sales cycle is 10 days, and your rep didn’t close their first deal in month 2, and by month 4 isn’t hitting quota, you might have mis hired (unless you hired right, didn’t figure out your sales process, and didn’t coach/manage/enable your new rep - then that’s on you).

• After they started, while they’re still onboarding and ongoing afterwards, you will need to support them. A lot.

• Every Monday you’ll go through deals with them. What’s live, what pain you’re solving for each deal (check FOUNDER). What are the next steps. Which ones are critical. Which ones are probably closing this month. Where do they need help on deals.

• Every Tuesday you’ll go through a 1:1 with them. This won’t be about the numbers - but about their own development. Where do they need support, what development they need. How’s their mindset doing? You can check the numbers in your CRM at any time - don’t waste a 1:1 time going over metrics. Make it about them and what they need from you.

• Wednesdays you’ll go through team training (once you have a team). You’ll deep dive into a sales topic, do roleplays or practice, etc.

• Thursdays you’ll review film together. Watch a call as a team, go over what went well, what needs to improve.

• Then repeat the cycle each week.

• On top of this, you’ll spot check their calls and do coaching there. And you’ll spot check their email follow-ups. And you’ll spot check the CRM to make sure they’re updating things.

• You’ll also keep track of objections, why you’re winning deals against the competition, and why you’re losing. Then you’ll work with the engineers to get rid of as many feature gaps and technical roadblocks preventing the company from selling.

• Then you’ll work with Marketing on improving lead quality for sales. And making sure the campaigns they’re running are attracting the right folks. And that MQLs actually end up as MQLs. And that Marketing shares a pipeline goal to keep your sales team busy.

• And you’ll still participate in deals. At least the bigger ones, more strategic ones.

So when you’re ready to hire for sales, you’re not really getting out of sales. You’ll be getting out of selling every individual deal. But you’ll be graduating to sales manager.

And I know what 90% of folks reading this will think - I’ll just hire a VP sales ahead of this. Don’t. Hiring a head of sales is even harder than hiring a sales rep.

Once you’ve made 2 reps successful, there’s repeatable growth. Then bring on a VP Sales to hire rep 3-300+. But the VP Sales isn’t supposed to bring on reps 1-2. And they should not be rep 0 - that’s your job as the founder to figure out product-market fit.

I’d love to hear from you! Hit reply and let me know what other topics you’d like to learn about.

For more practical early-stage sales tips, connect with me on LinkedIn.

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