Hiring Salespeople Too Soon

Hiring Salespeople Too Soon

Last night, I received the following email from the CEO and Co-Founder of an early stage startup company based in Los Angeles, CA. It read: “Hey Josh. Can we schedule time together to talk about building a sales organization from the ground up? [Co-Founder 2] and I need a more dedicated/defined process. We are interested in learning more about best practices from a tactical perspective; i.e., procedures to put in place, software to use, etc.”

My response: “Hi [Co-Founder 1]. Thanks for reaching out. You bet, happy to help any way that I can. This is stuff you already know, but I just want to set the context.” Companies execute known and tested business models. They know their customers. They know their competition. ETC. In contrast, startups are temporary organizations designed to search for a repeatable and scalable business model. Executing and searching are the key differences.

Based on uncertainty and unknowns, customer development is the process of searching for a repeatable and scalable business model. Founders often get frustrated and waste money when they hire salespeople, executers, too soon; i.e., before the business model is established or well under way. Here are two posts that summarize the process: Customer Development for Startups and Customers Development versus Sales.

In my humble opinion, the founders, not outside hires, should make the first series of sales to gain deep insights from customers about what is working and what is not. Otherwise, you may be held captive by a group of outsiders who may or may not truly get your business. If you have not been actively involved in the first group of closed deals, it is probably too early to start building a sales organization.

I think the more you and Co-Founder 2 are involved in closing the first group of deals; developing the process; hearing direct feedback; and getting rejected, the more you can ensure that what you are building is truly resonating with customers. This process can be hard to do with outside hires. Plus, if the founders are the first salespeople, your sellers and future VP of Sales will respect you more.

All that said, where are you in your search for a repeatable and scalable business model? Test: If I were to join [company] today, could I go execute the model and start generating sales? Or, is a lot of searching still needed? Whatever the answer, that is where we should start. How does that sound? In response, Co-Founder 1 said: “Thanks for the note. Just the reminder I needed that we are not supposed to scale until we actually figure out the model!”

All contents copyright © 2013, Josh Lowry. All rights reserved.

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