When a startup is in the early stages, everything falls to the founders. Product management, engineering, marketing and more rely on a few people – sometimes just one person.

This is necessary, even preferable in the early days. Founders should know how each part of the company is run, identify what customers need and find an elegant way to provide it.

However, as the startup begins to grow, a change takes place. While the founders are the engine of growth to begin with, they can become a bottleneck.

Adapting can be challenging. Revenue is what keeps a startup alive, so handing responsibility for it to someone else must be managed carefully.

We regularly see founders struggling to transition away from sales, so we decided to share our thoughts on how to move from founder-led sales to a thriving sales team.

 

We’re creating resources to help Seed and Series A founders thrive. If there’s something you’d like us to write about, get in contact with Tom here.

If you have a startup that you think we might be interested in, you can send your details to the team here.

 

When should you start building your sales team?

As with many things when it comes to startups, there are a lot of rules-of-thumb that dictate when you should (or shouldn’t) start hiring sales specialists. Some believe you should speak to at least 100 customers first, others say you should wait until the founders have personally driven $1m in sales.

One great sign that you’re ready is when you are consistently selling to people outside your network. Closing a deal with a cold prospect is very different to someone you know.

There isn’t a one-size-fits-all answer, but the overarching idea is the same. Before hiring salespeople, you need some level of product-market fit.

Growth suffers if you’re selling something different to each customer. What you’re looking for in the early stages is repeatability. Are you selling the same offering to the same type of people?

If you find yourself selling something different to each new customer, you probably need product management help. Read our piece on hiring a chief product officer here.

 

Building the playbook

Product market fit matters because scaling sales teams relies on building your company’s ‘sales playbook’.

The sales playbook is a map of a specific company’s sales processes. It covers the types of customers, how to conduct demos, handle objections and close the deal. It’s an outline of the sales process that new hires can use to get up to speed quickly.

Early customers are extremely useful when building this repeatability. It’s a good practice to record all customer calls early on, and review them with the team as training.

There is some debate as to whether the sales playbook should be created by the founders or by bringing in a sales specialist early on. Even if a founder is excellent at closing deals, they may not be the best person to build the playbook. It is often sensible to bring in a specialist to add structure to the process.

You may need to develop multiple playbooks to accommodate different customer segments. For example, selling to both enterprise and SMB clients requires two separate approaches. Enterprise-level deals often take more meetings and negotiation to close, whereas for SMB deals it’s more important to limit the number of negotiation points to speed up the timeline.

Timing is critical at two points in this process. The founder needs to decide the right time to start building a sales operation, and they need to decide when to step away and let someone else run it. Transitioning away from founder-led sales is a process, and knowing when that process is complete is a question of judgement.

Build from the bottom

Adding sales operations to a company that doesn’t have product-market fit is an expensive waste of time.

Getting it right is even more important now that the era of easy money is over.

We advocate a ‘bottoms up’ approach. That is, hiring junior roles initially to plug specific gaps – things the founders are less skilled at or that are simply inefficient uses of their time.

For example, founders often overinvest in hiring sales talent early on, but underinvest in the sales development representatives (SDRs) that bring in the leads. A bottoms-up approach would be to hire someone to handle prospecting and wait until later to find someone to close deals. This approach is about solving the problem in front of you and filling the gaps, then building from there.

Top tips for hiring sales talent

When it comes to building a sales team, we have some best practices:

• Get product-market fit first: If this guide were a single sentence, it would read “make sure you have product market fit first”. The most common mistake founders make when building sales teams is trying to do it too soon. Adding people before establishing process is a recipe for wasted time and money.
• Focus on the customer: Sales is about the customer. When training new hires, focus on the buyer personas and the challenges they face. All too often, startups focus on teaching new hires about the product and its functionality. Being too product-focused is a major drawback.
• Set KPIs: when building the process, the founders will get a sense of how many leads convert to meetings and how many meetings it takes to close a sale. Once these levels are set, they can be used to judge the success of any new hire and to diagnose issues in the process.
• Hire specialists: Sales is a broad discipline encompassing prospecting and lead generation, negotiation, establishing processes, setting strategy and more. It’s tempting to try and find someone who can handle everything, but very few people can do it all well. The sensible move is to hire for what you need right now and build an operation bottoms-up over time.
• Look for scrappy talent: Experience at a major brand can be a seal of approval for young talent, but founders should be careful of focusing on it when making initial sales hires. Doing sales for a category leader or established brand can be much easier than working for the challenger brand or number 2. Some advocate hiring the top performer from a second-tier company – these people can close deals even when they don’t have a brand name behind them.
• Hire for skills and resilience, not network: It’s a risk to hire someone based on their industry network. Being well-connected doesn’t necessarily indicate someone can sell, and if they can’t, their rolodex will usually run out after a month or so. People regularly oversell the value of their network.

 

Should you work with external parties?

Many startups choose to work with agencies when building their sales operations, whether to outsource a specific aspect of the process – such as lead generation – or to help with building the sales playbook.

However, the quality of agencies can vary widely, so it’s important to vet them. Examine their processes, make sure their fee structure aligns their interests with yours, and look at their track record.

One key signal is how in-depth their onboarding process is. Good agencies will take time to learn your business before the work starts. It’s a warning sign if onboarding is too quick.

Learning all about your products, messaging, audience and positioning takes longer than a one-hour call, so make sure you understand what work the agency is going to put in up front.

Ourselves and others have noticed a recent trend of relatively inexperienced parties starting agencies in areas like lead generation and SEO. Many of these parties are recent graduates, or are otherwise new to their supposed specialism, and some use ‘black-hat’ tactics – short-term ‘hacks’ that risk damaging their clients, for example by getting their Linkedin channels shut down.

Most importantly, make sure the SDRs have a sensible plan for following up – too much can wear out the customer, so that by the time they’re ready to buy, they’re unwilling to work with you. We find for smaller markets it is often better to hire someone in-house for this reason.

Even if you don’t appoint an external party, it’s a good idea to look at online groups that can provide opportunities for community-based learning. People we spoke to recommended Pavilion, a community focused on go-to-market professionals. Having a space to exchange ideas and best practices prevents you from getting stuck in a silo and keeps your strategy up-to-date.

Having a space to seek advice and share ideas is crucial. Transitioning away from founder-led sales is an important step on the journey to maturity. If you’re doing it alone, it’s even harder still.

 

Special thanks to the sales experts we spoke to for this blog:

Florian Montag is VP of business development at hospitality tech scaleup Apaleo. Florian joined the company when it acquired his previous startup, Hotelhero, in 2021.

Joe Benjamin is the founder of Revpilots.com, a marketplace for fractional and full-time sales talent for startups. Joe was previously a founder in residence at Antler and has been the first sales hire or sales leader at various startups over the past decade.

Elom Maurice is head of strategy and growth operations at Delverise, a startup growth consultancy. Previously, Elom held roles at Uber and IBM.

Sean Middleton was chief revenue officer of freelance marketplace Toptal, where he oversaw its growth from $250m-$675m in revenues. Sean also served as chief operating officer of Cognizant Digital Business, its in-house accelerator. He now advises startups on their sales and growth strategy.

Mark Colgan advises B2B SaaS startups on how to generate more pipeline, close deals, and also teaches courses in outbound prospecting and cold email at the Sales Impact Academy.