6 Ways Startups Can Build a Winning Sales Team

Jul 09, 2024

I got a fantastic question during my presentation on “Go Big: The What, Why, How of a Scalable Startup” (recap of a similar talk here) at Atlanta Tech Week.

How do you scale a sales team? What are the steps or best practices to build out an early sales team? What are the stages?

Here’s what I’ve seen work (and not work) to grow the sales function at a startup!

1. Founder-Led Sales

Don’t have a sales background? That’s okay. You can learn!

Selling is a key skill of a successful founder. You sell to customers but also to investors, employees, and prospective employees.

A smart, motivated founder can figure out how to sell.

And if a founder can’t sell the product…no one else can.

Never ever, ever try to outsource this (at first).

It’s a huge red flag to investors if someone other than the founder is fundraising or selling in the early days.

(Note: It’s okay to have a technical founder and a more sales/business focused founder. That’s why co-founders exist! Just don’t try to hire someone from the outside to do this.)

2. Supported Founder-Led Sales

Once the founder has figured out the messaging, pricing, buyer, sales process enough to regularly close deals, start working on ways to make the founder more efficient and productive.

This could involve leveraging a sales-focused assistant, using AI to record and document the process, hiring a commission-only intern or cold caller to set up demos, or whatever else you identify that lets a founder sell more and faster.

This work will also be helpful when you hire your first full time sales reps!

3. Hire 2 Reps

Not sure where this came from originally but David Cummings was talking about it in 2014 so it’s been around for a while.

If you can afford it (and you should be able to with low base salaries and high uncapped commission structures), hire 2 sales reps at the same time.

Why?

If both fail, the process, training, and/or rep selection needs work.
If one succeeds but the other doesn’t, you know something is working. Now try to recreate it!
Competition is good, especially in sales. It’s more fun, more learning, and more striving.

4. Make Sure They Are Scrappy

Here’s my 6 recs on hiring your first sales people.

Most important is make sure they have some sales experience (even if it’s retail sales during high school or college) but you still want someone hungry, creative, and coachable.

I’ve seen startups make the mistake of hiring someone too experienced who seems amazing on paper but doesn’t know (remember?) how to cold call, make presentations, do demos, or sell against well-funded Goliaths.

When in doubt, smart and scrappy!

Occasionally, you’ll get a business where industry experience and relationships matters a lot (Carpool Logistics who sells to automotive dealers is a great example) but this is the exception not the rule.

5. Then, Your Sales Leader

It’s fine to have a few reps before you hire a VP of Sales. Preferred even. Sometimes you can find a great sales leader who can close their own deals and also scale a team later (a la Derek Grant at Pardot then Salesloft) but it’s a big ask.

Sales is the hardest function to be a player-coach because everyone thinks you’re taking the best deals (and maybe you are — it’s hard not to want good deals — that’s why you’re in sales)!

Here is the greatest article about hiring a VP of Sales ever written. Every SaaS founder I know references these VP archetypes (The Evangelist, Mr. Repeatable, Ms. Go Big, Mr. Dashboards) by name or example.

Here is the other greatest article which explains how to hire, what questions to ask, and how to structure comp for a VP of Sales — including this updated article on VP of Sales comp.

6. How To Think About Comp

A few things to get right for early sales hires:

uncapped commission — if they sell more than quota, let them get more commission! I like a kicker or accelerator too. If they go over quota, they get 15% more commission on every deal. This means reps won’t “hold back” deals to the next quarter.
lower base, higher commission — much easier on company financials if you do a lower base salary balanced with a higher upside; the company pays commission when it realizes the revenue; includes avoid draws or high base reps; most reps, especially early in their career, are fine to bet on themselves with a high commission plan
align your CAC/deal size — are you hunting rabbits, deer, or elephant? If you’re hunting rabbits, you can’t use expensive weaponry (like high marketing costs or a large, expensive sales team). This makes sense on paper but is easy to lose track of on your first sales offers or when closing deals however you can. In other words, make sure your sales process cost and complexity aligns with the contract price of your product.

David Sacks wrote an excellent and thorough blog on sales comp for tech (SaaS) companies with numbers and example plans that I’ve mentioned before. A must read!

What other advice do you have for early stage companies scaling sales? What has worked or not worked for you?