When Should I Hire My First Sales Rep?

Steve LudwigValue Creation JourneyLeave a Comment

image showing "we are hiring"

You’ve successfully built and launched your product and made some initial sales. You’re probably like most Founders and looking forward to getting out of the Sales front line and wondering when you should hire your first Sales rep. If that’s you, then you’ve already passed two of the three major milestones to hiring your first Sales rep:

  1. Established product/market fit
  2. Proved that someone will pay (and that you, the Founder, can sell)
  3. Having the necessary financial resources to support an “experimenting” salesperson

Needless to say, if you haven’t passed the first two milestones you need to get there before considering making your first Sales hire. Some Founders might be so uncomfortable with the notion of Sales that they want to skip these steps and opt instead for a “hired gun” in the form of a commission-only salesperson which would be a major mistake. Regardless, no one is going to have the passion for the product that the founder does, making them the company’s best evangelist.

To better explain the three major milestones, it helps to examine the different stages of a typical startup value creation journey.

Startup Valuation Curve

The first two milestones fall under the first stage: Founder-led Sales.

Stage 1: Founder-Led Sales: Prove the product and market fit. 

In this stage, founders are doing the work of answering the question for the product: who is it for and what problem does it solve; does it work; and will someone pay?

If you have the financial resources in place to make your first Sales hire (more on that later) then now is the time but it is critical that you understand the role of the first salesperson which is to take you from startup to scale-up by creating a repeatable sales process, or Playbook. We call that salesperson a Pathfinder.

Stage 2: Pathfinder Sales: Develop a predictable, repeatable, profitable, scalable sales model.

In creating the Playbook, your Pathfinder salesperson will be proving that many people will pay for the product (true market size); that non-Founders can sell the product; that it does scale; and that it scales profitably. In doing all of this, the Pathfinder salesperson will develop the Sales Playbook that others can follow in scaling-up the business. 

Stage 3: Standard Playbook Sales: Scale the business. 

The Pathfinder is a rare salesperson with a unique set of skills and, consequently, is highly unlikely to be the person who builds out the Playbook Sales team. That is much more your traditional VP Sales.

Understanding these three stages is why we developed The Right Five. It’s to help B2B tech startup founders hire the right salesperson the first time – saving them time and money, and enabling them to grow more quickly.

The third milestone is to have the necessary financial resources to support your first Sales hire. In the introduction to this post we referred to an “experimenting” salesperson. That’s what your Pathfinder has to do to find the most appropriate sales process for your business – experiment. That involves a degree of trial and error – and failure.

Just as your Pathfinder has a unique set of skills, so their role shouldn’t fit within any pre-conceived notions of a traditional Sales role – nor should their compensation. We’ll cover compensation in detail in future posts but, for now, you need to be sufficiently well-funded to pay your Pathfinder a living wage without the expectation of predictable short term revenue. If you only have six months cash runway to cover the cost of your first Sales hire then you’re not ready to make the hire. Either your expectations of the role are unrealistic or you need to raise capital, or both.

In summary, as a B2B tech founder you will know you are ready to make your first Sales hire when you have:

  1. Established product/market fit
  2. Proved that someone will pay (and that you, the Founder, can sell)
  3. Having the necessary financial resources to support an “experimenting” salesperson

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