How To Hire and Build Your First Sales Team. Especially If You Haven't Done It Before.

Hey, everybody. I wanted to do a dive on a topic we've talked about many times over the years at Saster, but structured a little bit more, which is how do you build your first sales team if you've never done sales yourself? It can feel like a chicken and the egg. How do I get this going? And let me give you seven tips that we've talked about before, but structure them a little bit to help you think through it. So first, and I'm not the first to have said this, but I've said it many times over the last eight to nine years before you hire your first sales professionals, if at all possible, close 10 customers yourself. If some of us are truly awful at sales and we really need help in the early days, but it's much better if you can figure it out yourself. Those who can't do struggle to teach. So find a way to get 10 even if you're not good at outbound, even if you're not a hustler, even if you're not good at knocking on doors. Then build an amazing website, do some content marketing, write a blog, get on product hunt. Do something so that you have enough leads that you can learn how to close at least 10 customers yourself. So that's the first one. So let's assume you've closed 10 or close to it. Then how do you do it? How do you manage this sales team? Well, first you have to come up, and this is a mistake a lot of folks make. You have to come up with a comp structure that makes sense. And let me just come up with two simple ideas. Ultimately, down the road, sales has to be a profit center no matter what anybody says and what it usually works out to in SaaS that the fully burdened cost of a sales professional will be about 25 to 30% of the first year ACV she brings in. And there's benefits and there's taxes and all of that. So usually that adds up to a sales rep making about 20 to 25% of her ACV plus a little bit more expense to the company. But that may not be enough for a living wage in the beginning if you don't have a lot of leads and you don't have a lot of logos and you don't have a lot of brand equity. So just remember in the first few months of your first few sales reps, it's fine to even pay them 100% of what they bring in, just enough so that you can gain confidence that sales can be accretive at your company. So Pay a high percent of the ACV in the early days and then scale it down so that over months, over time, they're bringing in enough money to more than justify the expense on them. So make sure your sales reps can eat and feel good about closing. That's important. You don't want to pay sales folks for closing nothing. You want to be careful how much of a draw you give, but you can overpay per unit sold in the early days. Second, and this is maybe the most important bit of advice I've ever given in hiring sales reps when you haven't done it before. If nothing else, do this. I've said it before, but it bears almost infinite repeating because everyone makes this mistake. Whatever you do, only hire sales reps you would buy from yourself, at least in the early days. Now, later, later, when you have a head of sales and you have more folks on the team, you're going to need all different types of sales reps, folks you personally would never buy from. They're not producty enough, they're not technical enough, maybe even they're not as smart as you might like later. There's all different types of reps that can be successful from say, rep 5 to 500 or after. You have a VP of sales that's worked with all different types of folks. But when you don't have any experience in sales, every lead is precious. And the last thing you want is to give a lead to a sales rep you would not know, you would not buy your product from. And that's one thing you know as a founder. You know if you sit across the room from a sales rep, no matter what his or her background Is, whether it's 20 years in SaaS, whether it's six weeks in SaaS, AE, VP of Sales, CRO, CMO, CS, whatever it is, wherever they came from, no matter how predictable or strange, you know if you would trust them and buy your product for them because you've been on the other side. So no matter what's on their resume, no matter where they worked, what hot startups, how, how many acronyms come out of their mouths, how slick they are, how cool they dress, how nice a watch, never ever, ever yourself. Until you have a head of sales, never hire a rep you wouldn't buy your own product from. If you do, you will trust them with your leads and your business will accelerate. The third one, and this is one of the earliest canonical Saster pieces, but it's true, when you go to build your first sales team, you have to hire Two reps, you just have to, because you need to see variance. You need to see how different approaches work. And if you hire only one and she does great, you won't know why. And if you hire two and one does well and one doesn't, you'll learn, you'll quickly learn at least a prototype, a type of rep that can actually succeed in your company. So try to hire two and it will seem expensive, but really it won't be because remember with sales reps, with everybody salary vests and with sales reps your bonus has to be earned. So usually two reps don't cost that much more once you think about it then one rep does. Fourth in the early days and most founders are good at this, but some aren't. When you go to hire your first sales team, you have to be there all day to help. Later you will develop training and you will even have sales ups and you have a head of sales and you will still need to spend a lot of time in sales but you won't have to sort of be around for the, for the, for the AES themselves. But in the early days training is going to be by osmosis. So you have to be there. You have to be there to listen. You have to make them comfortable asking you four or five questions a day. You do not have to be a micromanager. Most of us, us aren't as founders but you have to be present. That's key to letting these first few sales reps succeed. A fifth again and you will hire all different types of reps. And this goes, this really ties to the second point of buying from reps that you would buy from. But try to hire smarter folks in the beginning. And why do I say smarter folks? What I mean is there's always trade offs and maybe in the early days if you would buy from the rep and they're smart and you trust them, maybe it's okay. If deep down they're mid pack, maybe it's okay. Maybe that's secretly a trade off because no one's heard of your product and there's going to be 50 questions and prospects are going to have to build trust in a relationship and it does help to have a few more IQ points even if you're not quite as driven at the close. I'll take a top quartile, even top 40% rep that I trust and believe in over maybe a top 10% rep in the very beginning that is less smart and would understand my product. You can take that trade off and I've seen super smart reps that I would buy from in the early days outperform folks that are maybe naturally better closers. But later, later you're going to want the best closers on planet Earth. Sixth, and this will probably be obvious to you, but in the early days with the first couple reps, keep everything simple. You don't have a sales ops team, you don't have a financing, you can have complicated sales comp practices and you can have complicated lead distribution. Just do round robin. For every two leads that come in, give one to Linda and give give one to Bob. Just split them up. Keep everything simple, not just round robin, but everything as simple as possible. And then the last tip and then a tip and a half when you do go hire your first sales reps. Look all there's all different backgrounds and I can certainly tell you stories of great reps who their only job before SaaS was selling pool supplies or working working at some working as a barista. It does happen, but it's rare. It's rare. What you really need is at least a little bit of SaaS experience. And as an AE, not an SDR, not a marketing manager, not a customer success professional because you don't have this experience, you don't know what SaaS sales is like. So you need help. So you need someone that at least has been around SaaS for 18 months. They may not have needed to be the number one ae. It could have even been in a very different industry. It is nice if it's a roughly similar price point because, because let's just dive into this and then we'll wrap up on this point. But if you've sold say a $10,000 a year product before or $1000 a year product before or $100,000 a year product, they're all sort of have the same pacing, the same number of leads, the same way you manage your pipeline, the same way you use cadences and outreach and phone calls and webinars and the toolkit. And even if the REP only has 18 months of experience at that price point, that's magic. That's 18 months of training that you don't know you haven't done before and you don't know how to give her. So so try for at least 18 months of experience at your price point. If you can get that in the rep and give nine times out of ten on domain expertise, you'll want someone that has worked in your space, your portion of fintech and environmental sciences in real estate, whatever you might do in travel but you can teach them that you know the domain and they'll pick it up. They'll pick it up in a few weeks. But knowing how to sell at a price point with 18 months of experience, that that is more precious for your, for your early reps and maybe for always. And the last bit of advice after these seven is almost every SaaS founder you'll talk to, they'll tell you that in the early days they had this one magical rep, this one magical rep, I had one that sold more than the other early reps all combined. And not only was he great, but I remember I was at Dreamforce one year and one of our customers grabbed me by the shoulder and said, hey, do you work with Joe Coletti? And I said, yeah, I work with Joe Coletti. I love that guy. I love that salesperson. I love him. I mean literally grabbed me by the scruff of the neck of Dreamforce. You want that magician. And that magician often does not come from a traditional background. Hopefully has that SaaS experience at your price point. That might not have been a SaaS company you heard of, might not have done perfectly there, but really knows the product, really knows how to solve customers problems, has true empathy and this magician is clever enough to work around the massive product gaps that you'll have in the early days. He's part evangelist, part sales rep, part marketer. Super, super loves your product. The customers love him or her. That's someone you're going to trust your leads to. And keep finding, keep looking for that sales magician because when you find that first one, you will watch your business just transform and that will bridge the gap until you have a true head of sales.