How to make your first sales hire – a guide for SaaS startups
entrepidpartners.comMy colleague and I started the sales team at PagerDuty. We were both engineers. Happy to meet for coffee in SoMa if anyone with revenue would like a short 1:1. I've done this a number of times over the years and hopefully those folks have found it helpful.
Sorry, no remote/phone calls. I don't do calls with clients either - face-to-face only - lesson one :)
Email is in profile.
Any tips for a developer who would like to move into Enterprise tech sales?
You might find a move into enterprise technical pre-sales easier (or perhaps that's what you meant).
Moving from tech support to pre-sales within the same organization is not uncommon - support have deep technical knowledge of the product, have customer facing (at least telephone) skills, are used to juggling multiple ongoing conversations, etc.
Moving from engineering, if you are in a role that requires you to understand the whole product, you are part way there. Communication skills perhaps less so (unless you run engineering TOI presentations for other parts of the business or within engineering), and customer facing skills possibly not so well honed.
A move from engineering to profession services (which adds a customer facing element) to pre-sales, to (if that's what you're aiming for, and is still attractive having worked with sales people while in a pre-sales role) sales, might be a better path.
Enterprise sales is less about the product, and more about developing relationships ("people by from people they trust"), constructing a deal that works for both organizations, and closing the sale.
Technical pre-sales is a question of mapping the customer's business requirements to the product's capabilities, and demonstrating that your company can solve their specific needs better than the competition.
That's all good advice. I see a lot of movement among solution architects (pre-sales), support, technical marketing managers, developers (although less so), etc. Sales is, as you say, a largely orthogonal skill set, and often, personality. I won't say someone can't transition between the two worlds but I'd be hard put to name an example off the top of my head.
Yup, that's exactly what I did. Your email doesn't show up (needs to be in the blurb not the email field) so just drop me a line.
or if you're in Toronto, reach out :)
Worth mentioning that this guide assumes your SaaS startup is doing enterprise / high-touch sales. If you're doing low-touch SaaS, you probably don't want to hire a salesperson at all.
This looks really interesting ... but I'm not going to download some random PDF when you could just have easily put the information directly on the site.
I hope the irony is not lost on you.
exactly, but for some reason if you refresh the page the PDF is embedded.
> Additionally, you should be able to answer most of these questions—all of which a candidate is likely to ask you: • How long is the sales cycle (from first conversation to closed contract) on average? • What is the typical deal size (in terms of ARR)? • How is your product priced? • What are the steps of the sales process? • How do you define success in this role? • How are you getting new leads and generating conversations?
As a technical founder, these are exactly the questions I need to ask someone with sales experience!
I think there are 2 common cases for SAAS startups here:
1. The founding team is very technical and doesn't want to make sales/talk to customers themselves. In this case, it will be difficult to achieve success without taking on a non-technical cofounder to do customer development and then early sales.
2. The founding team has technical talent but also at least one person who's happy to go out and do customer development and then make sales. In this case, they should probably wait on hiring someone with Sales experience until they feel that they have product market fit, which means they've probably made enough sales to answer these questions.
The challenge is that these are key fit questions. Hiring someone with experience doing high velocity one-call-close sales at $250/month is very different than hiring someone doing high touch field sales for deals that are $10k/month. You might as well be asking a DevOps person to write R for data analytics -- tooled totally differently. Those are the questions sales people have to understand, to understand if they are a fit, if their experience is relevant, etc. If they are experienced they can help define it, but it mostly all starts with pricing, how many calls you can afford to have before you are losing money on CAC and whether they have to do a lot of outbound grinding or not.
a16z has an article I read and liked recently: https://a16z.com/2017/05/26/hiring-sales-why-what/
Content tagged with sales: https://a16z.com/tag/sales/
Bryan from Entrepid here. We disagree with the advice of hiring a head of sales as your first sales hire. You are better off finding a someone with 3-6 years of experience to be the first hire as an IC. This hire (and maybe a few others) will help you grow the company to a point where you can attract a badass VP of sales / head of sales
This all depends on the capabilities of the current exec team. Generally my experience has been:
Exec team with mature sales presence/leadership = hire less experienced (3-6 years).
Exec team with immature sales presence/leadership = hire more experienced (6-10 years with opp to become a VP of Sales).
Good guide - thanks for putting together.
I'd love some advice for startups that do traditional non-SaaS software sales. However it seems that everything is catered to high-growth SaaS startups. Is there a dearth of material because no one will invest in traditional software businesses or because everyone else is building SaaS these days?
Are there actually startups selling “traditional” software? An actual serious question. The follow up would be: “why?” It seems like recurring subscriptions would have a much better LTV than selling one-time software. If updates and/or support is part of the product, then you’re essentially still selling SaaS even if it doesn’t seem pedantically correct.
Let’s say you are selling a $5000 piece of software and you update every 2 years. If you are counting on selling updates as part of your projected LTV, you are pretty much a subscription business, subject to the same churn considerations as a “normal” SaaS might be.
My point is that unless you are selling a one-time product with no paid updates or paid ongoing support, then SaaS strategies should work for you. Unless you happen to be selling something esoteric such as avionics or infrastructure software, it would seem most SaaS sales strategies would tend to be applicable.
Where I work we sell an IoT platform to big corporates, which is much closer to traditional software sales than it is to SaaS. There’s big upfront cost, and then rolling maintenance costs.
Pre-sales is a really long and drawn out process when dealing with big corporates, doubly so when you’re selling what will become core infrastructure. We’re currently a year into what is effectively pre-sales with one client, involving a full due diligence process, in depth conversation with their corporate security department, and a (paid for) trial involving several hundred of their customers.
To play devil's advocate - if you are not selling SaaS, then your infrastructure/uptime becomes much less crucial to the health of your business. A lot of the impetus for Devops seems to go out the window for a non-SaaS product.
Where in SaaS you might pay the first month or two as commission, in licensed software you generally pay 10-20% of the gross margin for the first year of the agreement. The mechanics of the sales process are very similar, the people involved are very similar. The difference is the approach to commission, typically, and the quota.
Two good books on the subject:
- B2B Executive Playbook
- Crossing the Chasm
But in general, the reason no one tells you how to run an actual software business is because why would they tell you what took them years / decades to learn the hard way?
SaaS Startups are a tool to fleece investors, so all the scam artists are happy to tell the world how smart they are at Starting Up. It's personal marketing.
Boring B2B Software is just a normal businesses, ain't nobody gonna tell you the secret to doing that. Get a job in industry and then learn it first hand, that's how you learn it.
"Startup" by definition means a business focused on very high growth early on. If you're a business selling software traditionally, it's very unlikely you're a startup.