How to do sales at a SaaS startup
Last week I met a founder of a SaaS startup at a coffee shop here in San Francisco. He told me that up until this point he was solely relying on low touch sales to make money. People will visit his site, they will signup for a trial and some of them convert. The funnel was good but he was ready to do more medium touch sales to get more customers onto their enterprise plans. He wasn’t sure what a sales plan should look like at the companies stage. Should he hire a sales guy and if so what type should he be looking for? In my time building startups, I have seen a lot of growth and growth in a lot of different ways. You start to see some common things that seem to be the right formula so here is the feedback I gave him and it might be a good general approach to doing SaaS sales at startups.
First Stage: Figure out Product & Value Proposition
0–10k MRR
You need zero sales people to get this done, just rely on your low touch sales (free trial + great on-boarding + drip marketing campaign). The founder I talked to already had this down, he had a solid Monthly Recurring Revenue(<15K) with good growth that indicated that people see enough value in his product to start paying for it.
Second Stage: Founders gotta close
10–50k MRR
1–2 People focused on Sales
After you reached a stage where the product is polished and you have incorporated some of the feedback from your early customers it is time to tackle bigger deals. This will almost start happening organically. Larger organizations will find their way to your product and signup for a trial and evaluate against other solutions. But unlike smaller fish they almost always require some hand holding and you gotta jump on calls and maybe meet people in person. The CEO should be closing the first 10–20 deals himself here. This will give you valuable feedback and essentially kicks off your sales department. Even if its just a one man show for now.
Towards the end of this stage you should consider bringing on board a Jr. Sales Rep that will assist the CEO. Look for someone very adaptable that can help scale things up, entrepreneur type.
Third Stage: Find your Maverick
50–70k MRR
3–4 People Focused on Sales
This might be the most debatable part of the plan. Some might prefer to establish a VP of Sales at this point but I would recommend finding yourself a maverick first. A maverick is a very resourceful type of sales guy, best described with Mark Suster’s words:
Mavericks are the people who innately know how to navigate a sales campaign. They can get access to senior executives and champion a sales campaign from the top. They still hit all of the highlights of the sales methodology (getting a champion, understanding the pain, mapping your solution, proving the ROI, finding out the competitors and differentiating and getting every department to “yes”) but they can’t follow the exact same process every time. They’re unmanageable.
This person will not be great at managing other sales reps , they are chaotic by nature and bad at following process. But in the end they know how to put the big wins on the board, they will score the home runs and everyone will love them for it. Have this person go for the big wins and support them with everything they might need to achieve them.
Fourth Stage: VP of Sales
70k+ MRR
5-n People Focused on Sales
It’s time to get your VP Sales. Someone who will take over all sales duties (CEO can stay active but doesn’t have to). Most likely someone that was at a Director level or higher at a bigger company with experience in managing 5 or more sales reps. They have to be willing and able to close some deals themselves and focus on building out the sales team. This is where you are stepping on the gas and are really starting to scale things out. Your VP of Sales will hire AEs, SDRs and divide the territory. He runs the sales show and if he doesn’t hit the numbers he knows he is in trouble. Full responsibility.
This was a very high level way of looking at what you need to do to get a sales team started. If you are looking for a more detailed sales plan I highly recommend checking out the hiring plan that Christoph Janz has published here:
https://www.dropbox.com/s/7e34c75h3iytkwp/SaaSSalesTeamHiringPlan.xlsx?dl=0
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