You have a tech startup and people are finally buying your product. Amazing. The pressure is now on to start growing sales. Initially, and in many cases, sales are conducted exclusively by the founders. But it’s time to grow and scale. It’s way too early (and expensive) to hire a VP of Sales or even a Sales Manager. So it’s time to
hire those first sales reps.
Hiring the right salespeople is a combination of a lot of factors but from my past mistakes I can tell you the type of person not to hire: the experienced salesperson from a big tech company.
“There are two mistakes that we often make with VP of Sales. One is we want to hire the person out of Salesforce, or pick your big company. That sounds like something that’s great. We want that domain expertise, we have a similar customer set.
First of all, don’t forget, Salesforce is a $5 billion company now, it ain’t a start up. We know that the Oracle VP doesn’t work. Salesforce is the same as Oracle today. We get over‑attracted to the name.”
The mistake that I, and many other people, have made is assuming that a rock star salesperson at Salesforce.com or another big company can walk into your startup and start selling your products. She has knowledge, experience, and training, so she’s definitely going to succeed. Right?
Here are 3 reasons why hiring a seasoned sales rep from a large company can backfire.
1. Your company culture
As Jason Lemkin mentioned, companies like Saleforce.com aren’t startups. They are big companies. Cultural fit is a big deal when trying to find the right salespeople. Working at a large tech company with a defined sales methodology is a lot different than working at a startup that’s trying to figure out their sales process. In fact, the research demonstrates that prior work experience can hurt future performance because employees’ organizational baggage prevents them from adapting to a new context. And if there’s one crucial ability needed at a startup – it’s adaptability.
2. You don’t have the same level of resources
Working at a large tech company has certain advantages. You have things like whitepapers, inbound leads, sales engineers, etc. In short, there are a tonne of resources to help the sales rep. At a startup, the focus is usually education and awareness, whereas in a big company the focus is on closing the deal. Someone who thrives in this environment might not work well at a startup. In a great blog post, Mark Suster explains why hiring a big company sales rep too early is a bad idea.
3. You don’t have a proper comp plan
Sales reps working at huge companies are used to defined salary and OTE (on target earnings) expectations. These expectations are built from trial and error and years of sales data. Startups hiring their first sales reps really have no idea what this number is going to be. Sales reps from big companies typically can’t handle this uncertainty and eventually leave.
The bottom line
What’s been your experience?
P.S. Make sure that you always hire at least two salespeople!
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