5 Mistakes Founders Make When Hiring Their First Salesperson with SaaStr's Poya Osgouei

Yes. We'll give it like 30 more seconds and maybe we'll start. While we're waiting, I have a quick little poll and I'll share my screen just to kick us off because this is meant to be interactive. That's why we call it a roundtable. I'd love for you in the chat— I think it should be working for everybody and I hope you can see my screen. I'd love for you to put in what your role is and where you're coming from. I'd love for the rest of the group to kind of know who's making up the community today, what you identify with, and where you're coming from. Founder, lots of founders, love it. Seattle, hello. Lots of founders, some folks from sales, some investors. Okay, I'm gonna get us off. Uh, hi everybody, my name is Poya. Uh, I am— you're able to see my screen? I'm gonna go probably full screen. We can see it. Okay. Um, I'm, I'm Poya. Nice to meet everybody. I oversee sponsorships for SaaStr, uh, and I've been absolutely thrilled, uh, to want to do this for the last couple years. I'll just start with some housekeeping items. The big difference between roundtables and workshops or like other sessions, roundtables are meant to be more interactive. So sometimes I might call people on if you want to be called upon to share your feedback and your context. You can keep your camera on if you want to, or you don't have to. Your audio can be muted, completely flexible. These sessions will be recorded and shared at the end. And I'm going to highly recommend if you can join us in the Brella section, I'll put it towards the end. In the chat, and I'll share that link. It's one of the, I think, best opportunities to network with one another, whether you're looking for fundraising, trying to recruit people, whatever it may be. I think it's a, it's a great way to, to make some connections. I'm just gonna really quickly do some housekeeping items, my version. I want this to be fun, interactive. I was hoping we would all be in person sometime in 2020. Obviously, for different reasons we can't make that happen. So the best way to interact, I'm going to call on you to put in the chat. Please, please get involved. Give us an answer because that's, that's how these sessions we can learn from one another. So let's have fun. And the last thing, we can be friends. And what I mean by that is we can have different opinions. It's the cat and dog. We love both animals. Let's respect each other for our different opinions. If for whatever reason you don't agree with something, That's completely okay. We've put what your role is already, so I'm gonna skip that. Lots of founders, lots of folks in sales joining us. I'll try giving both perspectives, at least from my understanding. And the things we're gonna discuss today is the top 5 mistakes we usually see made from a perspective when you're hiring your first salesperson. And this is both from a perspective of a founder, as well as from a perspective of person joining as a salesperson, right? And the reason I find this topic extremely, uh, fun to talk about is I've done it multiple times, and now I've actually made it in some ways my life's work. And what I mean by that is I joined an early-stage company back in 2013 called HackerRank. Um, in HackerRank, I was one of the early sales hires, uh, made every mistake you can think of as a first salesperson, but also had some success. And then I moved on and HackRank's doing great. I absolutely have a lot of admiration for the CEO Vivek and what he's doing. And then I moved on to a company called Automile. And Automile is an interesting story because they were having a lot of success in Sweden. They're a European company. And then they decided to expand into the US and I joined as an early sales hire there. And back in October of this year, actually in 2020, they had an exit. They sold to their number one competitor in Sweden. Grats to that team. And then I went on to become a head of sales for a company called Play-Doh HQ, where I was an AE/head of sales. So we can talk about some learnings there. And for the last 2 years, I've been doing sponsorships at Saastr. So why do I share this? This is something I've done. I've made mistakes, I've done some things right. So the goal is to kind of share that perspective with everybody to just to make it a little easier. So with that said, Uh, the second poll we're going to take today is I'd love to know from your perspective on this call, who should be responsible to bring on the initial customers? If you think it should be the founder, put A. If you think it should be the sales rep or sales manager or head of sales, put B. Wow, lots of A. Any Bs? I'd be curious. Any Bs? Wow. Okay. Larry Goldberg has B. A, B for Henry. Does anyone feel— if you feel you want to support B, I'd love to get your perspective. Whoever put B, if you want to speak up, I'd love to hear your perspective of why you think it should be the sales rep. Feel free to unmute yourself if you want to go. Anybody?

I don't have an issue with that. Give you my opinion on that. Yeah, if it's the founder, it's linked to one person, and that's always a risky one as far as I'm concerned, especially if you're on a scale, because it's, it's all hanging on the one person. And if that person is not available for a day or whatever, the potentially the business could stop for a day or longer. So having a sales group or manager or whatever, at least there's a backup, whatever you look at it.

I love it. So, Haim, really, really good perspective. Thanks for speaking up. And what Haim basically was sharing is if it's only the founder, the rest of the business stops, right? That's what makes it a little tough. And I agree. So I would say, especially if you've been a second-time founder customer, you've done it well, a lot of the times what you see is they just go and hire the people they know to just do it again. But if you— if it's your first product, you, you have a hard time. I think it's really important initially, and this is some things that, uh, we've already talked about at SaaStr, it's really important to have the founder do it. Um, so I think a majority of people would agree, um, and Jason's talked about this, at least initially, your first 10, 20 customers. I think it's really important for it to be the founder. Um, and I know it's really tough if you're a founder that doesn't have sales experience I know, I know, I know it's really, really difficult, but the reason I think it's important, at least from my experience, and I'll share the AutoMile story because I think it's a really, really interesting one. So Jens Nylander, who's the CEO of AutoMile, he had a lot of success in Sweden. And what AutoMile does is GPS tracking. And they do it specifically for the business use case. And in Sweden and Norway and other Nordic countries, it's actually a mandate that you have to follow and set up. Submit your GPS and mileage tracking. And he saw this opportunity in the US, right? And during the same time, Verizon purchased a competitor that was in the space, very well known, called Fleetmatics for $2.4 billion. So Yen saw this opportunity to come to the US, but there was a lot of possibility, right? For GPS tracking, if you think about it, you could, you could be a parent, you want to track your maybe kids, high school kids, right? Like that's one use case. You could want to maybe track a spouse. That's another use case. And he had a really hard time like knowing where do I want to go double down on. So the first initial $500K, $1 million, he actually in the US brought himself. And the way he did it is he just went to market and kind of start calling people, different use cases. And one of the patterns he saw time after time was that Fleetmatics customers were really, really, really upset. They were, for whatever reason, after the Verizon acquisition, they were like having a really, really hard time. So when I start interviewing with him and kind of started hearing this pattern, I'm like, that is something we can like, if I were to join, we can double down on and kind of continue to grow. So the reason I bring that up is I think it's a really good illustration of sometimes if you're the founder and Jens is actually a very technical founder, so Um, like he had to kind of go out of his comfort zone and do the initial sales. And you're absolutely correct, kind, that it's an opportunity cost, right? Everything else had to kind of slow down. But I think it's really, really important, at least initially, you probably as a founder, as a CEO, know where to double down on, right? And then you can hire folks that are a little more experienced in sales, um, to come up with like the tactics and the plays. And the play I came up with, I said, why don't we go to G2 Crowd, Capterra, like anywhere that we can find easily, like where those Fleetmatics reviews are, and double down. And what happened is for like a period of 18 months, we just ran this play. And these are some of the customers we brought on. Atlanta Fire and Safety, they're out of Atlanta, obviously Georgia. They became one of our first customers. Then we went to Arizona where we got Tiger Mechanical Services as a customer. And then the beauty of this is it was a playbook that we just ran after where we got the customers, we made them happy, And then we got a case study one after another. So why I bring that up, I think it would have been really, really difficult for a first sales hire to come up with this on his own on day one. Whereas for me, it made it a little easier that I had some of like that experience. So the number one mistake, and I think this is important, is when you hire your first salesperson, I don't think they need to have the strategy. but they do need to have at least some comfort with your sales process. What typically sometimes happens, and it's the mistake I've seen time after time, is you go and hire a salesperson that's like used to like super inbound-heavy driven sales motion, right? They're used to a lot of leads, but you might expect them to go outbound, right? And that happened to me at HackerRank. I went from being used to having the Oracle brand and leading with the brand and like, hey, we're Oracle. And then you go to this little small company called HackerRank and you need to come up with the playbook yourself. So I don't know if others agree. I love to know if you agree with this sentiment, like put agree or something in the chat, but the number one mistake I usually see is you hire somebody that is not adaptable to your sales cycle, right? I think it's really, really, you gotta go and find somebody that's kind of been in the blocks because it makes it a little easier. And then the second reason I think it's important for The founder, when you hire somebody, and Hein, I think I'll go back to your point, if you can afford it, and once you've done that initial 10, 20 customers, you brought them on yourself, I think it's really important to bring on 2 sales reps. If you don't agree and/or you can't do it, I totally understand. I say this, and I think context is really important, having done it with companies that have raised money. So if you're a bootstrap company, I think it's much more difficult. Obviously to do that. Uh, but I, I think if you can hire 2 people, the reason that's really important is you can A/B test, you can compare and contrast. It makes it just that much easier, uh, for you to like write down those processes. And I think Jason's talked about, um, this a lot. Uh, but one of the things I don't think Jason or anybody I've seen talked why, why I always tried making a push for 2 people is you have this healthy competition with the other person. right? And the example I'll give is Robbie Allen. So Robbie and I have been doing sponsorship sales at Saastr, and I remember back in October, October of 2019, Robbie put up the biggest deal we've ever closed at Saastr, right? And me just being super passionate, happy for him, there was a little part of me that I'm like, ah, I gotta get him next month, right? So What happened that following month is I did everything I can to just make sure I beat whatever he put in October. And so November, I beat his record. And then December, Robbie had to beat my record. And then in January of 2020, this year, I beat Robbie's record. So it was this back and forth for a couple of months. And then unfortunately, in February and March, things just, if you're in the event industry, took a turn because of COVID But The other reason I think this is really important is when we move to this virtual sponsorships, I'll be the first to admit I had a really, really hard time positioning Saastr in like a virtual way. And then the person I learned from was Robbie. I listened to every sales calls that he had. I was like listening to his pitch. And that's why I think it's really important if you can hire two people is one of the things that sometimes I don't hear enough is the, like the competition aspect of it. And that's healthy competition. I don't mean in a, mean way that the person's not collaborative, but it makes it really, really important. But the other use case that it's really important is it's my second point, which they can learn from one another. So I think the second mistake I usually see both sales reps and founders make is there's not enough documentation. So as you're going through your sales process, right, I can't tell you how often I've seen this where you just ask some basic questions like, how do you get in front of the customer? What's resonating with them? right? Like what are those repeatable things that you hear time after time? And then the other part of documentation, which I think is really important, is like what is the buying process? And I mean, not only, especially in SaaS, not only the buying process, but what happens after the customer signs that contract? Who owns implementation? Is it the sales team or is it somebody else? The biggest mistake I've made, and I made this mistake at Plato and Automile, I'll be the first to admit, It actually had nothing to do with the product. It had to do with the collections piece. We, uh, as a sales team, right? When you close, you're like, hey, the customer has signed. Like it's somebody else's turn to kind of collect that money. But that is, I think, the wrong way of thinking about it. And whether it's the CFO, the CEO, I don't care who it is. You need to have those discussions. And that's why I think whether it's the founder or the salesperson, whoever it is, I think it's really, really important to document that and put who's accountable for what. So that's the second mistake I see time after time. There's not enough documentation that happens. And then you'll be surprised, the things that you hear on customer number 10, I guarantee you it's going to be repeatable on customer number 11. So, and then try doing whatever you can to break those up, whether it's by the industry, by customer size, whatever it may be, because what you'll start seeing is patterns. And at Play-Doh, One of the mistakes I made is I pitched a 10-person company the same way I would pitch like a 100-person-plus company. And the thing I learned the second time around is just go talk to your customers, ask them like, hey, why would you buy this thing if you were to buy it, right? And they would tell you. And what you'll start seeing is some patterns adapt, which is, I think, is really, really beneficial. So I'll come back to make it a little easier. And then this is mistake number 3. I've made this mistake multiple times. I've seen a lot of founders make this mistake. Which is when they hire somebody, they put way too much weight on the industry or their past experience. And I'll give you two examples of this. One example is at HackerRank, one of the first leaders we hired came from HackerRank, came from LinkedIn. And they had joined LinkedIn as employee like number, I don't know, 500 or something, right? When it was a little more later stage and they came and they implemented the same playbook that they were used to at LinkedIn. And I think that why that's dangerous is we didn't take into account that LinkedIn had this much history, this much money in the bank, this huge network. And we were trying to go to motion or go to go out to market with like a field sales team, which is really, really expensive. Right. And if you've ever managed field sales reps, they, they expect you to go find the lead. And what happened frankly is we didn't have enough success. And then the other mistake sometimes I see here is When you are trying to go, whether you're, you're trying to go after Tullio or whoever the incumbent is, whoever the leader is in your category, and you go pick up one of their reps, you don't do enough questions or identifying of were they there as employee number, like, I don't know, 100+ when they're, when Tullio was at $50 million ARR, or did they actually join in the early days? Like, what kind of rep is this? Is this the rep that is going to go out and build the deck and do the heavy lifting? Is it the rep that's expecting those inbound leads? I was just in a conversation with a founder, um, that frankly, they decided to part ways with the rep because what he realized was the rep expected the sales leads, everything to come to them and they didn't want to do enough outbound. And it's not that that's a bad thing, right? It's just, it's, it becomes a little dangerous when you put too much emphasis on past success or the industry experience. Mistake number 4 that sometimes I see, and this happens a lot of the times in the early days when you're trying to, like, maybe you've done the first initial 10, 20 customers and you're bringing on, on the rep, is you're incentivizing people for the wrong behaviors. And I learned this the wrong way at Play-Doh. And I'll give you the Play-Doh example of what happened when we joined Play-Doh. For, I don't know, maybe 10 months, we were growing at like 10, 15, 8% month over month, which which is pretty healthy metrics, I would say, by any standards. But what happened was we were measuring revenue. So as long as revenue was going up, we were really happy and we were patting each other on the back. But the things we didn't pay attention for was usage, NPS, the things that really, I think, matter in the early days of like making the solution very, very sticky. Right. So I think in the early days, and I don't know who's— I apologize, somebody. It's not me, I can't tell who it is, but if you can mute yourself, I would really appreciate it just because I think there's some background noise. Uh, but the point I'm trying to make here is in the early days, I think sometimes assigning revenue— and I know somebody's going to come out and be like, oh, I can't believe you're saying like don't assign revenue numbers to sales. Uh, but I think in the early days it can maybe be a little beneficial to come up with something that's a little more non-standard. And I, I wanted to go find like who other customers are that have done this. So Marketo who by any standards has had a lot of success. In the early, early days, they actually did not have a revenue number, they had a logo number. So, uh, their VP of sales, uh, basically gave a, a number that was a logo. Talkbox, who was acquired by Vonage, in the early days they actually went off of usage. They went off of minutes because they associated as long as we made the customer really, really successful to start using the solution, that's a good thing. AppDynamics, who got acquired by Cisco and had a very successful exit. In the early days, they went off of case studies because they said, hey, we're doing something evangelical. If we can go out there and get customers to be a reference and put their name on our case studies, it would make it that much easier. Notion, who by no means I would say is a direct sales model, and they're very, very product-led growth. The reason I put this on here Some of you are probably going with the same motion that Notion's going with. That kind of rhymed. But the point I'm trying to make is if you're hiring a sales rep after, and they're taking over maybe at like $5 million ARR, $4 million ARR, whatever it may be, right? Sometimes it might be easier if the behavior that you want is, hey, how do we push these accounts to go enterprise? Or when we bring in a new user and then we're gonna, in the first place buy like one of our more affordable packages on their own. Like if you're adding a human to the factor, like make sure you're driving the behavior of getting that human to go a little more upmarket, right? So it's like disqualifying some of those deals is actually a good thing because again, you wanna— I think incentives drive certain behaviors and that's where, that's where it comes in really, really handy. And the last example I give is, is HubSpot. Uh, and, and I see Chris Bondi, uh, commenting about user adoption being really, really important, which is again at the different stages. Uh, I agree with you, Chris, it's important to do those things. And HubSpot ran into this problem at the beginning where they had a revenue target and then they saw their churn kind of going off. And their CRO, Mark Verbrugge, what he did was he started basically giving the sales teams commissions after 4 after month number 4, right? And I think there's a trade-off. You have to consistently like reevaluate what those behaviors are, but I think it's really important for you to consistently reward people for the behaviors that you want to get out of them. And then the last one, which I think is really important, whether if you're joining a new team as a first sales hire and you gotta go out and do this on your own, or if you're a founder, please, please, please give them support. A lot of the times you try connecting with a VC that's invested in you or something different, and I think you need to go out find somebody that's a couple of years ahead of the person you're hiring, whether you're founder or head of sales, but that's been there, that's done that, whether they're an advisor or mentor or coach, because I think it's really, really important to have an objective perspective of somebody that can kind of help you go through the ups and downs. So that for the most part is, is what I wanted to share. We— the good news is we have about 7 minutes, so I'm happy to take additional questions if you want me to. Uh, and at the same time, if other people have some feedback, I'm happy to give it. And then the biggest takeaways I just want to— if I have to document— hire for a relevant stage. I think it's really, really important for you to, um, identify what is the profile, what— like, getting really nitty-gritty of who you need to hire. Um, in the early days, I think the founder needs to bring in, again, the first 10 to 20 customers. And then whether it's you as a founder or the first 2 sales reps you bring on, you need to document and track. And I mean every step. Like, is the first touch an email? Is that what we've had success with? At the end of that first call, does the customer ask for a trial? Do they ask for a proof of concept? Like, what's working? And then kind of document and try upleveling. And then get them help, whether it's a founder or a sales rep or head of sales. Get them a mentor, coach, advisor, because it will go really, really far away. So if you have any questions, I'm happy to take them. I think we have about 4 minutes, so you can put them in the chat or the Q&A, whatever's easier for you. So Matthias asked, who documents the go-to-market pre-onboarding, the AE? I think it's a combination. I think the founder, when you come on, And this is a mistake I've seen is you get hired, right? And the founder's like, hey, go listen to some of my calls or go learn like how we brought on that customer. And that's why I think from day one, it's really important for you to document every step. And if you can automate it, even better, right? But I think at the beginning it's the founder. And then when you bring on the AE, and that's why I think it's important to have two, just to see what their process is. But I think it's a combination of the founder and whoever's doing the actual activity. So whoever's doing the activities, who I think should be responsible for documenting it. How do you ask for case studies? So this is a really, really good question, and I'll give you the Automile experience. And I got to give a shout out to Jay, who was the VP of marketing, and I learned this the hard way. I think when you ask for a case study, it becomes really, really tough because as soon as you ask for a case study, they go and they're like, I got to get the legal team involved, or I got to get others involved. You get too many hands in the kitchen. Whereas I think a better way of positioning this is, hey, can we review how you're running your day-to-day activity? What solutions are you doing? How are you overcoming your challenges? So I would position it as more of an interview versus a case study. But as part of that review, you can ask them, hey, how are you using our solution? Right. Why did you pick us? Right. What problems is our solution solving? What are the other parts of your tech stack that other people in our industry should know about, right? So I think it's a better, at least in the early days, if you don't have a brand, I think it's a better idea to position as more of like, we wanna learn from you versus actually like, would you be open to a case study? I'll take one last question. What sales training programs have been the most effective for people on this call? And I'll just give you my perspective. I think, The most important thing you can do if you're selling to an HR person or anybody, go sit down with that person. I think if you can follow them for a day and see what their day-to-day is and how they would be using your solution, I know it sounds cheesy, but I think that's the best way you can actually train somebody. Put them in that situation and have them walk the talk. So this has been an absolute pleasure. Again, I encourage you to join us at Brella and other sessions. If you had fun, I thank Jason and the rest of the SASA team because that's a team of 10. I can't tell you how difficult it is bringing the masses time after time together. So thanks so much. Thanks for joining us. Have a good rest of your day. And more than happy to help in any way I can. Bye, everybody.