Execution around sales and marketing remains a major challenge for B2B tech startups looking to move along the growth/valuation curve. Despite founders readily accepting the importance of sales and marketing in moving from startup to scale-up, execution remains a major barrier to success.
As a gauge of the challenge, less than 1 in 5 startups accepting seed investment ever make it to Series-A. Of course, not every startup takes seed investment and, of those that do, not every one needs to go for a Series-A. They may be growing sufficiently well to fund further growth without continuing investment.
As a gauge, 1 in 5 suggests a giant chasm that most startups fail to cross. Why is that? What is it that most get consistently wrong? Well, getting the hire of the first salesperson wrong is a major component. Here are the 7 most common mistakes made with that first Sales hire.
#1 – Not being ready to make that first Sales hire
Some founders may be so uncomfortable with the prospect of selling their product that they dive straight into hiring a salesperson. This is a major mistake. Nobody is more capable of selling your product than you. You have an un-matchable knowledge of the product and while selling may seem uncomfortable it is essential you get out there and win those early deals. If you can’t sell it, nobody can.
Assuming you’ve reached the milestone of founder-led sales, then “not being ready” also encompasses not having the cash runway to sustain a salesperson. Occasionally the metrics around this suggest the option of hiring a commission-only salesperson. This could be a category of mistake all on its own but we include it here. Here is the rationale on why hiring a commission-only salesperson is a bad idea.
#2 – Not Understanding the Role
What does success look like for your first Sales hire? What do you need them to do? Just sell stuff? Anything? To anyone? What if every new customer comes with a list of new features to be added?
No, making the transition from startup to scale-up requires development of a predictable, repeatable, scalable, profitable sales process, meaning the development of a Playbook that other sales folk can use to successfully scale the business.
Unless you recognise the real role of your first Sales hire then how can you possibly identify and recruit the skill sets required to be successful? Indeed those skill sets are unique and very different to those of other Sales types. They’re the skills that belong to the Pathfinder.
#3 – Introducing Shortcuts in the Initial Screen
Having placed your job ad, what do you do with the 150 resumés that hit your inbox? After all, you still have all of the other things to do with regard to growing your business.
Some actual [as in we’ve seen them] solutions include asking someone external to the business to screen them; just choosing surnames beginning A-M and discarding the rest; plus many more shortcuts designed to get down to a few candidates to interview but likely missing the real jewels in the resumé haystack.
The Right Five was designed to automate this screening process and ensure you get the right five Pathfinder candidates to interview who you know can do the job.
#4 – Not Being Able to Interview Effectively
Salespeople are notoriously difficult to interview. Perhaps by design. Good ones can walk through the rain without getting wet. This is not derogatory in any way, it’s just a fact. Compound that with your potentially not knowing what you’re looking for (and then how to assess for it) and your chances of success are seriously diminished.
The reality then is you’ll only hear what you want to hear and, without the ability to dig deeper, you’ll likely end up hiring based on all the wrong criteria.
#5 – Hiring the Largest Rolodex
One criteria that will likely get you into trouble is hiring the candidate with the biggest Rolodex. They’ve worked in the sector you’re looking to address, they’ve been at a “big shiny corporate” selling into that sector for decades, what can possibly go wrong?
The simple, quick answer is that they’re selling with a Playbook where everything is defined, where everyone has role, with support coming out of their ears. You have no Playbook (the role of your Pathfinder is to create one), nor do you have the support available that these corporate salespeople will need.
Bottom line is you can focus too much on ‘experience’ when you should be focused on the skills required to be a successful Pathfinder, the skills we have defined and which we assess for in The Right Five.
#6 – Hiring Someone who Looks Like Me
This is related to the 4th mistake or, at least, the shortcut deployed is similar. Whether overtly or not, hiring someone you like (or looks like me) and placing that above other factors is a shortcut, yes, but to failure not success. If you know that five candidates can do the job, then choosing the one that best fits in or whose skills dovetail best with the existing team is not a bad thing, but only if you know each can do the job.
This could also be stated as hiring to culture fit. For a tech startup looking to make their first Sales hire, this should never be the primary decision factor. Later in the life of your business then, yes, it becomes increasingly relevant in decision-making but even then I’d contend that hiring to core values is going to produce better outcomes. That’s one for another day.
#7 – Not Communicating Effectively
This is a mistake that most companies make regardless of size. Either not getting a response to an initial application or, worse, not getting any feedback after the major investment in multiple interviews is going to leave a bad impression with a candidate.
It’s unnecessary, disrespectful and reflects poorly on the Company. For a tech startup it’s even worse. You’re hiring your first salesperson and, if you’re doing it right, you’re looking for a Pathfinder. You have hundreds of candidates, only a few of which will be Pathfinders. That doesn’t make the rest of them unsuitable for other roles in the future. Indeed, they may well be ideal Playbook salespeople when you’re at the scale-up stage. Treat them with respect, communicate appropriately and you have a ready-made pipeline for future hires.
Further, you have hundreds of people who have expressed interest in your startup. Might they be potential customers at some point? Possibly, right? Communicate with them, keep them informed of your progress (with permission) and they could be customers of the future. It does happen…
The Right Five helps B2B tech founders hire their first salesperson right the first time. Through a proprietary sales recruitment technology, The Right Five automates the assessment of candidates and brings you Pathfinders, the type of salesperson proven to thrive in tech startups. We deliver the right five Pathfinder candidates for interview, allowing you to select the right one.