Unlocking Success: The Key to Building a Thriving Sales Team

Name: Unlocking Success: The Key to Building a Thriving Sales Team
Uploaded: 2023-09-23T14:15:03+00:00
Duration: 1 min 26 s
Channel: Jason M. Lemkin
Description: Jason M. Lemkin argues that scaling a sales team beyond a handful of reps requires paying market-rate salaries, not relying on a charismatic CEO to…

23 Sept 2023 · 1 min

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1:26

Jason M. Lemkin argues that scaling a sales team beyond a handful of reps requires paying market-rate salaries, not relying on a charismatic CEO to recruit people willing to work cheap. He recommends a structure like $70K base plus $80K OTE, with quotas most reps can actually hit so they earn their bonuses.

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At the end of the day, there's two ways you can look at it. First of all, if you— after the very early days, you have to pay market. You have to pay market. There's too many startups. So there are exceptions, and I am in awe of very charismatic CEOs who are able to convince sales reps and folks to take very low salaries. But even if you can do that in the beginning, it doesn't last. If you want to build 8, 10, 20, 200 sales, you have to pay— whether you have to pay high end of market or low end of market. But you have to pay market. So before you even get there, you have to pay market at least for OT, and the sales reps have to eat. So, OK, let's say you decide, OK, I'm in San Francisco, and the OT is $150,000, but it's going to be a $70,000 base and an $80K bonus. OK? But no one makes the bonus because it's too hard. They're only making $70K with 10 years of experience in the Bay Area? What's going to happen? I mean, rent's kind of high here, isn't it? So you have to develop a plan where most of your reps are hitting quota, OK, and they can eat, and it's competitive. You have to start there, OK? And you have to back solve then into a comp plan where the company can make any money, OK? And so you have to start with people have to eat and be happy and feel comfortable coming to work and not feel like they're going to get fired for doing a decent job. So that's the bottoms up model. The tops down model is if you raise venture capital, if you have a few extra nickels in the bank, you can play in the beginning.