Hiring Salespeople At A Startup: The Trait You Need To Assess

No one needs to tell you that sales are critical to most startups’ survival. Once your startup matures past the founder selling stage, hiring salespeople becomes crucial.

Hiring the wrong person is always an expensive mistake, but it’s especially costly hiring a salesperson who doesn’t work out. According to Tomasz Tunguz’s analysis of 36 publicly traded SaaS startups, sales and marketing salaries eat up around 90% of revenue in the “grow or die” early years.

salespeople-revenue-ideal-candidate

While there’s no shortage of advice on hiring salespeople at a startup, how well are these opinions supported by the data?

Which traits differentiate employees at a startup vs. an established company?

Georgia Institute of Technology professor Henry Sauermann examined data on over 10,000 R&D employees at three types of companies:

  1. startups (i.e., founded within the past 5 years and less than 100 employees)
  2. established small firms (i.e., founded before the past 5 years and less than 100 employees)
  3. established large firms (i.e., founded before the past 5 years and more than 100 employees)

Sauermann looked at whether 5 employee motives differed among the company types:

  1. job security
  2. salary
  3. autonomy (i.e., how independent you are in the role)
  4. diversity of responsibility for work activities (i.e., generalist vs. specialist)
  5. intellectual challenge

The results

Compared to employees at established large companies, employees at startups rated

  • job security: less important
  • salary: less important
  • autonomy: more important
  • diversity of responsibility: more important
  • intellectual challenge: more important

Compared to employees at established small companies, employees at startups rated

  • job security: less important
  • salary: the same
  • autonomy: the same
  • diversity of responsibility: the same
  • intellectual challenge: the same

salespeople-startup-ideal-candidate

The takeaway for hiring salespeople at a startup

Based on the data, the stereotypes appear to be true: people are attracted to startups due to their desire for more autonomy, responsibility over a wider range of tasks, and an intellectually challenging environment, whereas there’s less of a concern over salary.

But the biggest insight from this research is that startup employees are unique in their higher level of risk tolerance.

Although this research examined R&D employees, these findings should extend nicely to salespeople. These results should provide you with a better understanding of which traits to assess when hiring salespeople for your startup helping ensure its survival.

Do you assess risk tolerance when hiring salespeople? Let me know in the comments or tweet @ideal.

Share on LinkedInShare on FacebookTweet about this on TwitterShare on Google+Email this to someone
Ji-A Min

Ji-A Min

Head Data Scientist at Ideal
Ji-A Min is the Head Data Scientist at Ideal. With a Master’s in Industrial-Organizational Psychology, Ji-A promotes best practices and data-based recruitment. She writes about trends and research in talent acquisition, HR tech, and people analytics.
Ji-A Min

Comments