Scaling by Specialization

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Updated August 22, 2022
Founding Sales

You’re reading an excerpt of Founding Sales: The Early-Stage Go-To-Market Handbook, a book by Pete Kazanjy. The most in-depth, tactical handbook ever written for early-stage B2B sales, it distills early sales first principles and teaches the skills required, from being a founder selling to being an early salesperson and a sales leader. Purchase the book to support the author and the ad-free Holloway reading experience. You get instant digital access, commentary and future updates, and a high-quality PDF download.

As I’ve noted previously, a hallmark of a modern sales organization is specialization, which ultimately fosters greater expertise and efficiency in executing each step of the sales process.

As you start to hire, then, you should be thinking about what part of your sales process you’re hiring to support. Generally speaking—given that a founder or product manager starts out doing both the market development activities of calling accounts and setting appointments with decision-makers, alongside account executive activities like sales presentation, demo, negotiation, and closing—the first thing you’ll need is market development help to load your calendar with appointments. Then, once your lead-generation function is sufficiently ramped that your individual calendar is overloaded (when you don’t have enough time for sufficient down-funnel follow-up and closing conversations), it’s time to add more account executives. Later, when you have enough customers approaching renewals, it’s time to add account management functionality.

Depending on the role(s) that you’re hiring for, your approach may change at the margins, typically with more involved hiring processes for more senior roles. But the kernel will be largely the same.

We’ll start with the most general components, then move to the specifics of hiring for certain key roles.

Determining Your Hiring Profile

To start, you should converge on your hiring profile. A hiring profile, not to be confused with a job description, is the set of characteristics that define your ideal hire, including both raw and professional characteristics. I started, grew, and refined the TalentBin sales organization and later extended that to a sales organization of 1K+ people at Monster, all while working with other early- and mid-stage sales organizations to help build or refine their sales orgs. Along the way, I’ve come to deeply believe that your sales staffing should be of the same quality as your engineering staffing. And thus your hiring methodology should reflect this.

This flies in the face of decades of sales-hiring theory, which has in large part treated a sales rep as a sales re as a sales rep—fungible, coin-operated, cannon-fodder infantry to march into the field. We’ll talk about this more in High-Impact Sales Onboarding and Training as well, but the approach of hiring large numbers of sales staff that seem to meet a moderate bar, then firing them if they don’t work out, is especially pernicious in an early-stage organization selling a high-innovation product. It may work for organizations that are trying to value-engineer—hiring the lowest common denominator at a 30th-percentile market cost in order to keep their cost of sales low. But it’s no good for twenty-first-century software sales. The opportunity cost you’re eating using this approach is terrible.

Raw Characteristics

What I look for in potential sales staff, and what I have coached others to hire for, is high intellectual acumen, a high “figure shit out” quotient (practical, resourceful street smarts), and a high “grinder” quotient (willingness to do the grunt work).

Smart solutions require smart sales staff. Having the brains to quickly understand things is a prerequisite for understanding the dynamics of the market—the business models and economics of prospects, the existing solution ecosystem, the competitive landscape, and so on. It’s also representative of a potential hire’s ability to internalize new features and their customer-facing benefits as your engineering team ships them. If you are in the business of bringing a new, innovative solution to market, one that changes and improves constantly, the importance of staff that can quickly ingest, comprehend, retain, and express the value of that solution cannot be overstated.

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The alternative is sales staff who don’t and can’t understand the business processes and economics of their clients; without that foundation, they can’t position the positive impact of your solution, will not be facile with the market landscape, and will have difficulty expressing the value of new engineering efforts. You can probably see why I compared sales and engineering hiring above—because you can have the smartest, hardest-shipping engineering and product organization in the world, but if the folks who take that to market can’t do those efforts justice, you’re in serious trouble.

And while intellectual acumen in your sales staff is required, it’s not sufficient by itself. That intellectual horsepower needs to be leveraged by practicality and resourcefulness. For starters, analysis paralysis—that hair-twirling noodling you get from intelligence absent practicality—is anathema to the high-activity execution that is required for enterprise sales success. Spending five minutes thinking about the perfect way to respond to that email is not helpful when there are 30 more you need to send by the end of the day. Moreover, nothing in sales takes an elegant, deterministic route from point A to point B. Every deal has twists and turns, so an ability to figure it out and do whatever it takes to get the ball across the goal line is paramount. The tooling will never be perfect. The decision-makers will never fall into line the way you want. It is the role of the sales professional to figure out how to succeed in spite of that. So look for people who can just figure it out.

Lastly, in enterprise sales, activity is king. And a lot of that activity isn’t particularly fun. Making 80 phone calls a day isn’t pleasant. Getting shot down on the phone isn’t either. Doing five demos back-to-back is actually physically taxing effort. Sitting down and ripping through dozens of emails as you clear a pipeline is boring. And all of these activities are certainly less fun than checking out what’s happening on Facebook, Twitter, or Instagram, or chatting with colleagues or mindlessly responding to colleague-facing email. But those unpleasant tasks are all important for sales success. The staff who will be able to thrive in this sort of environment have that high grinder quotient, or the ability to work through large amounts of not terribly pleasant work because they know that it’s important for their success.

You want to select for sales staff that can comprehend the space in which they operate and where your solution fits in, constantly update that mental model as both the space and your solution evolve, and resourcefully execute at a high tempo. I’ve boiled it down for myself to a sort of cheat sheet of the leading indicators of these characteristics.

Smarts

The best way to get smart sales staff is through referral by people whose judgment you trust. That’s why proactive referral recruiting can be so helpful (and we’ll get to that in a few pages): you understand the judgment of the referrer, and they have inside information on the person they’re referring. But you don’t always have that insight.

Failing that, college can be a helpful indicator. Top and second-tier colleges, like first- and second-tier private schools, UC schools, other top state schools (for example, University of Washington, University of Oregon, and so on) allow you to draft off of someone else’s authentication. In order to be admitted to these schools, graduates had not only solid acumen scores (SATs, ACTs) but also a pattern of academic achievement to meet GPA requirements. Both are good leading indicators.

By no means is alma mater a sufficient indicator for an automatic hire decision, nor is the absence of a top school an automatic disqualifier. This should be considered as just one term in a scoring algorithm. Beyond just school, look for a historical pattern of achievement academically, professionally, and with respect to extracurriculars. All of these will be good leading indicators.

Resourcefulness

Look for patterns of having figured things out in the past too. What does that look like? It could be a history of starting businesses, clever hacks or creative shortcuts of some sort or another, or meaningful hobbies with a progression of excellence. Sports participation is often a great indicator of resourcefulness as well. Candidates paying their way through college is another great example, as are decisions to move great distances to do something new.

Competitiveness

Competition is an intrinsic part of sales, and there is no better way to look for a competitive streak than prior sports activity. This is especially true of multi-sport athletes who have engaged in competitive athletics from an early age, through high school or, better yet, college. High-end musical or academic competition is also a good indicator.

Coachability

Sales reps will not be perfect when they start selling your product. And there is little worse than reps who think they know what they’re doing, actually don’t, and won’t take coaching to improve, preferring to throw leads in the dumpster. Usually the only solution is letting them go and eating the associated opportunity cost. But this scenario can usually be avoided, and learning curves can be compressed, by hiring sales reps who have experience taking coaching. Competitive athletics, or anything that involves taking coaching in pursuit of the correct way of doing things, are a great leading indicator here.

Likeability, Charisma, and Leadership

While being a persuasive and smart salesperson is required in the early stage, there’s nothing like pure likability, charisma, and leadership ability to give reps a tailwind. Look for leadership positions within teams, clubs, and service organizations, and prior experience winning elections as leading indicators of likeability and charisma.

Detail Orientation

The stereotype of the charismatic, slick sales rep exists for a reason. Sales is about people and persuasion. However, more and more (especially in inside sales), it’s also about methodical execution of multistage processes, precision follow-up, juggling 100-opp pipelines, and CRM excellence. So hiring a big-picture person who can pitch like greased lightning but fails to follow through on down-funnel opportunities amounts to setting tens of thousands of dollars on fire. And that’s not going to work.

How do you sniff this out ahead of time? Throughout the screening and interview process, look for errors in details, like typos and grammatical errors in the written screen and resume. I like to ask in the written screen how candidates organize their lives: Do they use a calendar or to-do list to make sure things don’t fall by the wayside? What does their Gmail inbox look like? Do they archive emails for which there is no next action after they read them? What do they think about messiness and how clean do they keep their desk/room/house? If you think their desk is a disaster, just wait to see what their pipeline will look like…

Persistence

Sales inevitably includes some unpleasant slogs. Look for staff who are used to that sort of thing—to enduring unpleasant, necessary precursors in order to achieve desirable outcomes. Certain types of sports demonstrate this in spades: crew, swimming, cycling, long-distance running, track. Seeing something on a resume like achieving the Eagle Scout rank suggests persistence too, as does a self-started business (provided the candidate stuck with it).

Positivity
Teamwork

While individual contributorship and individual responsibility are paramount in sales, in modern organizations with SDR to AE to AM handoffs, teamwork is also important. Sales reps need to rapidly learn go-to-market best practices and share them with their management and colleagues, while feeding market feedback back to the product organization. Prior team sports experience, of course, is the best way to find this, but team environments can show up in other activities as well—like founding a business or participation in service organizations.

There are doubtless many other characteristics to look for—and presence of these traits doesn’t take the place of proper screening and interviewing. But if you look for candidates who embody these characteristics, you’ll have a great head start on a strong interviewing funnel.

Professional Characteristics

When hiring for market development staff, those raw characteristics are probably sufficient. You’re likely hiring folks who are straight out of college, and who won’t have a lot of professional characteristics of note. But as you start to hire more senior staff, you may want to consider prior experience.

Personally, I’m of two minds about this. On the one hand, I’m a huge fan of creating an upwelling effect by bringing on market development staff who are fresh out of college, training them over a 6–12-month period as they become familiar with the market and solutions, and then moving them into closing roles. It ensures that they are inculcated in your culture and system—Gregg Popovich–style—and that they don’t bring any bad habits or preconceived notions to bear.

On the flip side, sometimes you need to scale, or hire those first account executives, and you don’t have time to wait for your bench to grow. In those situations, you can use prior organizational membership as a great heuristic for the characteristics you need on your team.

I’m going to start with the warnings, because I feel that I’ve seen (and made) way too many mistakes of faulty analogy when looking for professional experience that matches what I need.

Industry Focus

Thinking about industry wrong can be a problem. Just because someone sold human resources software, doesn’t mean they can sell all HR/recruiting software.

exampleWhen I’m hiring for TalentBin—which sells software into the recruiting part of organizations, and is a fairly transactional sale (perhaps purchased on a budgetary cycle, but just as often purchased off cycle)—it would be a mistake to look for sales staff that have experience selling, say, performance management systems like SuccessFactors, Halogen, and so on, just because they also sell into HR. The sales cycle, tempo, and even value propositions (one is about human capital acquisition and proactivity, the other is about compliance) are substantially different.

Instead, when it comes to industry focus, look for those who have sold to the same decision-makers that your org sells to, at a similar price point and budgetary tempo. If you’re selling recruiting software, then people who have previously sold recruiting agency services could make sense. Both sell to the recruiting organization (not HR, which is responsible for time cards and payroll), and both sell something that can be purchased outside of a budgetary or RFP cycle. So be mindful that industry is a more nuanced thing than SaaS or analytics or HR.

Role Execution Focus

Another thing to be wary of is the notion that “sales is sales is sales.” This is not the case. Your organization will likely be focused, to start, on new customer acquisition, the most difficult of the sales exercises. In mature organizations, there is typically more abstraction between roles: account executives do new business acquisition, and account managers focus on renewals and upsells and cross-sells. So if you’re giving someone credit for sales experience, you need to make sure it’s the sales experience you want.

This is also true when considering staff out of organizations where this abstraction does not exist. These are typically legacy sales organizations, like Oracle, or younger, more loosely architected sales organizations like ClearSlide, where reps are responsible for lead generation, appointment setting, demoing and negotiation, and closing, followed by onboarding and later upsell and cross-sell—every stage of the sales cycle. Because the focus of these reps is so heavily split, they may have only a fraction of the necessary experience compared to someone who has been focused exclusively on new business acquisition. Be sure to consider this.

Sales Cycle Tempo Experience Mismatch

Ignoring sales cycle tempo can be problematic too. If your solution is one that requires a long sales cycle, herding many decision-makers and influencers to an eventual conclusion, then hiring folks who are used to one-call closes or, at most, 15-day sales cycles can be a problem. They won’t have the cat-herding experience, and will have muscle memory of high-volume, rapid-fire engagement to work against.

It’s the same on the inverse. If your solution has a more transactional, quick hit sales cycle, with a lower average contract value, hire for the activity required for that: lots of interaction with disparate clients, high volumes of demos on a weekly basis, and management of a pipeline of many smaller deals. Someone who has years of experience shepherding more complicated, slower-moving deals—where a pipeline has a much smaller set of larger opportunities, requiring less disparate activity—will have a lot of baked-in muscle memory to unwind to have success in your solution’s deal cycle.

This isn’t to say that either of these tempos is better than the other. It’s just that they need to be in alignment with the tempo of your solution’s sales cycle—something that you should have a pretty good handle on, since you’ve been doing it yourself. So be mindful of this.

Industry Bellwethers

Similarly, be wary of pulling staff out of the standard industry bellwethers—the monoliths of your space that you’re looking to steal share from. The challenge with these sales reps is that they’ve been selling behind established brands, working with established marketing organizations that drive lead generation, and handling existing contracts that are on renewal cruise control. All of these benefits will be nonexistent in your organization. So if the old saying is, “No one ever got fired for buying IBM,” then the corollary is, “An IBM sales rep probably won’t crush it selling a no-name, startup solution.”

So if you’re a new payroll industry entrant, former ADP people may not be a great idea. Or if you’re a new recruiting solution, be wary of senior sales executives out of a CareerBuilder, Monster, or even LinkedIn—anyone who has become baked into the budget and will expect clients to take their meetings and the renewal to show up on time with a bow on it.

Moreover, the older the sales organization, and the longer the rep in question has been there, the more likely it is they have adopted ineffective legacy behaviors from that organization. Most older sales organizations have poor sales technology adoption practices. They have legacy CRM systems that are hard to use, and thus reps and managers grow complicit in avoiding them. Sadly, this leads to a culture of CRM disuse, which in turns leads to a culture of low transparency and low accountability, which leads to low execution and excuse making.

In lieu of technical adoption, there will likely be less efficient process workarounds to paper over the gap, like time-consuming weekly meetings and line-level managers who spend their time on sales calls alongside their staff. Unfortunately, this consumes time that leaders should instead use on higher-value activities: consuming information from sales leadership, product marketing, and product management and distributing it to their team, or monitoring CRM metrics to spot issues as they show up in the data. Poor technical adoption also tends to foster bad email behavior, like cc’ing management on every action, because there is no trust in the CRM. That quickly leads to overflowing email inboxes that crowd out actually valuable information, like new product releases, marketing collateral, and so on. All of these expectations and behaviors can be very hard to unwind, so be aware of that when considering staff out of organizations that meet these criteria.

cautionThere is a caveat when it comes to more junior staff. Many of these industry bellwethers have the infrastructure to support solid sales training programs and to instrument good sales behaviors, like high calling and emailing activity. So looking there for junior sales staff, like market development reps who are ready to move on to a closing role could make sense. And laggy promotion timelines in these larger orgs can end up leaving staff who are ready for the next step languishing six months or longer beyond when they became capable for that step. Just be cautious that the potential hire hits your other requirements, as many of these larger organizations have a lower bar for other important criteria.

Now that we’ve covered some areas where you’d be wise to use extra caution, there are a couple of places that are often great sources of the professional characteristics startup leaders are after.

Mid-Stage Startups

One place to look is the set of organizations in your space that have hit escape velocity and whose sales staff may be looking to jump onto the next rocket ship. They just finished selling a new, paradigm-shifting solution into an existing market, and thus would be more likely to have success doing so again. So if you’re one of the newest set of applicant tracking systems going after the recruiting market, like Greenhouse or Lever, this could be sales staff out of Jobvite, iCIMS, and so on. It probably isn’t sales staff who are still at Taleo or Kenexa, or selling applicant tracking solutions for Oracle, SuccessFactors/SAP, and so forth.

Customers

Another place to consider for potential sales staff is the customer base that you sell into. If you sell IT infrastructure, the in-house IT administrators who implement and administer your solutions are deeply intimate with the problem space—they live it. Or if you sell recruiting software, recruiters who experience the exact business pains you’re looking to solve can be great fits.

Again, though, familiarity with the space is not sufficient by itself. An IT administrator who is introverted, and unable to conduct high-activity outreach and engagement, is never going to work out. But paired with the other characteristics you’re looking for, this kind of subject-matter expertise can be gold. Former recruiters are great salespeople for recruiting solutions because they not only know the pain points, but they are used to a recruiting workflow that revolves around high-activity outreach, persuasion, and pipeline management—just like sales.

Achievement Characteristics

Once you have identified candidates with the professional characteristics you’re looking for, one benefit of looking at staff with prior experience is that you can ask them for artifacts of the sort of achievement you’re after: quota attainment, activity metrics, and such. One thing to note, though, is that salespeople are used to selling, and spinning anecdotes and data to support their goals—and they will sell you on hiring them. So while their resume or LinkedIn profile may speak to quarters of outside achievement with regards to quota, I’ve seen enough embellished titles and stats from existing and prior staff to know that those self-reported metrics should be viewed with a gimlet eye.

Instead, ask for actual proof. Screenshots of activity graphs and leaderboards, directly from the CRM of a candidate’s organization, are hard to spoof. A truly clever approach I’ve heard of but not used is asking for a screenshot of CRM revenue leaderboards and the candidate’s place in them. This, of course, not only shows you the candidate’s ranking, but also the other top performers in that org, in case you want to recruit them next. Asking for W2s is also a popular approach, but my issue with this is that it’s a top-line outcome; it doesn’t show me the key metrics, like calls, demos, win rates, and so on I’d rather have the underlying data. But generally speaking, something is better than nothing, and something that comes from a third-party source is certainly better than something that is essentially marketing collateral—for instance, the candidate’s resume and LinkedIn profile.

Relationships or “Hiring a Rolodex”

“What about relationships?” you might ask. Isn’t there value to sales staff coming out of organizations where they have worked with hundreds of clients and have their direct-dial phone numbers and email addresses? The notion of hiring a sales professional for his or her Rolodex is a dying one. It may even be dead already. This concept is a vestige of the time when there were no easily accessible alternatives for identifying and engaging with relevant budget holders. This is no longer the case. The sources vary by vertical, but with LinkedIn, Jigsaw/Data.com, and Hoovers/D&B, identifying decision makers requires only rudimentary searching by your lead-generation function.

While relationships with existing clients can be helpful, this value proposition should by no means excuse the absence of other requirements. There is no reason for you to hire someone who fails your other criteria in order to access their Rolodex. A 23-year-old market development rep armed with 500 accounts to call can get you the same thing (while building your bench), so you can give that account executive seat to someone who meets the requirements that are going to drive success. There may be exceptions for industries where the decision-makers can’t be found via other means, but this is generally going to be less and less the case over time, as the world moves toward more information transparency for prospecting.

Articulating and Documenting Your Hiring Profile

When you’re getting started, it can be helpful to consider how other successful SaaS sales organizations approach their hiring profiles.

exampleTalentBin: At TalentBin we targeted new grads out of high-quality universities, like Stanford, Cal, other UC schools, and so on, with a history of achievement in both taking initiative and building things. We also looked for indicators of success in team endeavors and athletic excellence (particularly in those unpleasant grinder sports). Alternatively, we targeted existing market development staff from LinkedIn—an industry bellwether in the recruiting market—with the promise that those market development reps (SDRs) would have a faster path toward becoming account executives at a fast-growing organization like TalentBin, compared to a slower-moving, larger organization like LinkedIn. We also hired former technical recruiters who had high subject-matter expertise but also the high-activity execution characteristics needed to sell software. We specifically did not pull account executives out of LinkedIn, or legacy sales organizations like Monster or CareerBuilder; these more senior staff were typically inured to selling existing solutions that the market is well aware of (job postings, resume search, and LinkedIn Recruiter) and thus were less suited to presenting a new, innovative product that substantially departed from legacy solutions. They were also typically more focused on maintaining and renewing existing contracts than on acquiring new customers, and relying on an established brand for making contact with customers rather than being a tip of the spear and penetrating and proliferating within accounts.

exampleMeraki: A highly successful hardware sales company, Meraki adopted the strategy of pulling high-impact sales staff out of IT value-added reseller (VAR) shops. In those small IT consulting shops, which are largely undifferentiated from each other, sales professionals need to hustle hard in order to beat others out for business. Moreover, because they are dealing with organizations that typically are without IT leadership (CIO, VP of IT), reps are serving in a very consultative role. IT resellers constantly see new technologies come across their shelves, so the ability to understand customer pain and then identify new technologies to solve those problems was paramount for these folks. Lastly, there is a high level of inside-sales execution on the part of these VARs, in order to keep their efficiencies high and cost of sales low in a low-margin business. All of these characteristics aligned with Meraki’s needs and drove sales excellence in the organization.

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