An estimated 92% of SaaS startups fail within the first three years. And it doesn’t happen because of poor accounting service.
It’s because of a lack of sales.
Without sales, you lack the oxygen that fuels growth. Raising money becomes more expensive, hiring the right talent becomes a battle, and competitors keep trampling you on the ground.
For this reason, hiring your first salesperson is the most critical decision you’ll ever make. If you hire the right talent, you’ll easily build a scalable revenue stream that meets your ROI projections.
And if you get it wrong, you’ll waste your time and money and have to start all over again.
“Bad sales hiring is the death knell of young startups.”
Peter Kazanjy, co-founder of the Atrium.
This guide will explain how you should go when making your first sales hire, how to interview and screen applicants, and how to sign a contract with the right person.
When Is The Best Time To Hire Your First Salesperson?
Most successful SaaS startups had one thing in common. Their founders were the first salespeople for at least three months.
It doesn’t matter if you are naturally good at sales or not. You have to go out there because it’s your business, and you understand it better than any other person.
There are a few reasons for this.
- It allows you to validate if customers are willing to buy the product.
- You get to talk to the customer to learn about objections and how you can improve the quality of your product.
- You can predict if and when a sale will take place.
But these reasons don’t give you the go-ahead yet, there are some conditions to meet.
First is having a promising revenue trajectory. Jason Lemkin, the former CEO of EchoSign says that you should have at least ten paying clients with a customer LTV of $5000.
The ability to bring the ten clients on board shows that there is a demand for your SaaS product. And it means the money you’ll spend hiring a salesperson won’t be in vain.
Next is having a well-established sales process. Your salesperson will pick it from where you left and won’t need to start everything from the bottom.
This sales process should include:
- The overview of your product.
- Key performance indicators (KPI).
- Activities at each stage.
- CRM process and tips.
When you have fully understood your buyers’ needs and mastered the art of pitching, selling, and closing a product, that’s the right time to bring a salesperson on board.
One or Two Sales Reps – Which is Better?
Both choices have their pros and cons. Honestly, there seems to be no definite answer for this, but there is one exception I’ll tell you about later.
When you hire two salespeople, you get more data points to measure success. For example, if one succeeds and the other fails, you can compare and know if your product is the problem or the poor performing worker.
Besides, having more people on your sales team means you’ll increase the quality of emails, calls, demos, deals and demos.
On the downside, you have to note that humans are more complicated than you think. It’s even worse when your two sales reps don’t share a common goal. Still, that doesn’t mean that hiring one salesperson will save you the trouble either.
That said, you don’t need one or two people on your sales team. You need an intelligent, self-directed individual that can bring results. There’s a “success” flywheel mechanism when you hire the people who’ll do a better job than ten lazy salespeople.
From a Startup perspective, saving money is at the top of your priority list. So you’d better go with one individual. This is someone who can lead to better business outcomes, create a friendly working environment, and keep your ROI trajectory high.
What You Need Before Recruiting A Salesperson
Not every salesperson is suited for every job. People have different personalities, which influence how they work and the results they produce.
So don’t settle on your candidate’s previous experience. He might have recorded an average contract value of $15000 on their past job but never get a $2000 ACV working for you.
This calls for defining a candidate profile. What does your candidate look like? What are his characteristics? And can his traits merge with your product’s vision?
Peter Kazanj, the co-founder of Talent Bin and Atrium, explains the key characteristics to check when screening applicants in his book, founding sales. He divides them into two;
- Raw Characteristics
Peter calls these “intellectual acumen” or a candidate’s ability to grind with high quotients and change with the dynamics of the market.
Such candidates can quickly understand your ecosystem, figure out where a solution fits in, and execute tasks with minimal distraction.
You won’t find these characteristics on your applicant’s resume. In a nutshell, they are the overall personality of applicants. Peter gives a cheat sheet of the things to check.
- Attention to detail
- Likability and Leadership
- Professional Characteristics
Individuals with raw characteristics are most suitable for market development staff. They can be college graduates who are go-getters or junior level candidates.
But when you need seasoned sales reps with progressive experience for senior positions, you need to look at their professional characteristics, which you’ll get in their resumes.
The traits are connected to the candidate’s past roles, achievements, academic accolades, and skill level.
The professional characteristics Peter gives aren’t what you expect.
- Podium toppers – These are people with artefacts you are looking for, like activity metrics and quota attainment.
- Rolodex Power – Look for applicants with existing relationships. Though this notion of hiring people for their connections is getting obsolete, it’s only a priority if you have to hire someone more senior.
- Mid-stage startup experience – These candidates have had a recent win of selling something novel. They have the right skills to do it again and are on the search for the right product.
Where to Source Good Talent
Now that you have identified your ideal candidate, it’s time for outreach and source for the right talent. There are many ways you can do this.
- Staffing Agencies
Staffing agencies come in handy when you want to make a quick hire. Theoretically, they have done the hard part for you and picked ready-to-go, fresh candidates on the search for new roles.
The only downside of staffing agencies is that they are the most expensive form of hiring. Before you consider them, ensure you have a budget that won’t cut into your revenue.
- Job Boards
Job boards are getting less popular when it comes to sales. Great salespeople are not looking for new opportunities. Their current companies likely pay them the top dollar to keep them.
So this might not be a viable option if you’re looking for highly experienced candidates. And in case you find one, their salary request might be beyond your reach.
However, job boards come in handy when you are looking for rising talent. You can take these candidates under your wings and nurture them to become sales monsters.
Consider posting your job opportunity on sites like Indeed or niche job boards like Salesjobs and Rainmakers. They have a huge reach, but be prepared to be bombarded with unqualified leads.
Referrals are the simplest and cheapest way of getting candidates. But it can be unreliable. For instance, you might be pressured to hire a candidate who practically isn’t fit for your team. can lead to conflicts between you and the referrer if it doesn’t work out.
Don’t hire someone because your best friend recommended him. Make sure you put your priorities first before friendship.
- Direct Recruiting
Probably the most time-consuming but effective method to source for salespeople is direct recruiting. You’ll scour through profiles on Linkedin or indeed looking for people with the right background, experience and skills resonating with you.
As a result, you get the top talent you have hand-picked and don’t have to wait for candidates to roll in.
For direct recruiting to work, you’ll do more of selling your SaaS startup since these guys are probably not looking for new opportunities. By the very nature of direct recruitment, you’ll need to convince them that working for you will be better.
4 Tips for Hiring Your First Sales Reps
You have done the back-breaking task of getting successful candidates. But it’s not over yet. You still need to check for a few things before you hand in the contract paper.
- Work Ethic
Sales is a demanding job and the bloodline of any company. If you don’t make sales, you are out of business.
Whether your candidate has nailed it on both professional and raw characteristics, they must have a strong work ethic and stamina to guarantee a seamless workflow when you hire them.
Dig into your candidate’s background. How was his college life? What was his first job after college, and did he work as a teenager? It’s even better if you find someone with military experience or someone who was into sports.
The candidate’s background will give you a brief of their past life and show you their level of commitment.
- Passion for Sales
There is no substitute for passion and knowledge. You are more likely to succeed if you hire someone excited about your product’s mission and goal.
These people will delve into understanding your product internally and externally and aim to become the go-to person for your customers.
As a startup, you might not have access to the necessary marketing collateral or big teams behind you. So if they need something that’s not within your reach, they’ll have to be “loving” enough to figure it out themselves.
- Storytelling Skills
If you’ve done sales as a founder, you probably know that customers not only listen but want to listen to someone who can hit their pain points.
The days of “pushy marketing” are over, and customers are in charge of the information they consume.
While storytelling is a powerful sales strategy, not every salesperson can create captivating stories that make clients visualize the product in the context of their operations.
How do you get someone who can do that?
All this happens during the screening process. Justin Welsh has an incredible way to do this on his first hires.
He’d give candidates a little information about his product and target customers. He then gives them 24 hours to come up with a catchy narrative.
When the time comes for presentations and a candidate brushes through his product’ features, he doesn’t hire him.
But if he gets someone who comes up with a compelling narrative connecting the benefits of his product with the customer’s pain points, he knows he’s found the right person.
Challenges are inevitable for SaaS startups. Your marketing campaign might not bring results, your support systems might fail, or your product can break.
Whatever the case, you must get a salesperson who will positively take these challenges and find a solution.
To assess the positivity of your candidates, ask questions about challenges they had in their previous roles and how they handled them. You are looking for wise responses that didn’t put down a co-worker or trashed their bosses.
If you sense tones like, “I was right, and they were wrong,” that’s an indicator that the candidate isn’t mature enough to handle challenges. Bringing them on your team might cause more harm than good.
Your mission at this stage is to get the right salespeople, not the best salesperson in the world. You also have a role to play.
Before you even begin the recruiting process, you need to understand your product and sell it. Then comes hiring the right person, training them to sell your product, and handling objections.
None of the equations shouldn’t miss as they will affect your sales funnel. So don’t make a mistake and expect a salesperson will come and fix them.
Once you land a good salesperson, make sure you give him all the tools he needs to change your product’s visions and profits.
About the Author
From 9-5, Mihael is a content strategist, editor, and promoter at Voila Norbert. And from 5-9, Mihael is the CEO of his conversion-focused content marketing agency, 21writers.