Startup First Hires: When and Whom to Hire for Sales Roles
Making first hires in an early-stage startup can be a real challenge as it determines success or failure of the company. In order to find out when and whom to hire for certain roles, we are meeting with early employees holding specialized roles at startups, and talk about what skills and backgrounds are needed for specific roles, and when to make first hires. In a recent fireside chat for our portfolio companies, we were joined by Jonathan Forster — one of the first employees at Spotify — to talk about sales.
Jonathan joined to lead Spotify’s sales and marketing and stayed at the company for 10 years. He played an important role in growing the business to what it is today. You may remember him from the infamous early-day ad “Jonathan from Spotify”. In this discussion, we dived into first hires and leading salespeople, the 2020 sales playbook, how to sell a product people have never seen before, and the early days at Spotify. Here are key takeaways from the conversation.
Hiring and leading salespeople at early-stage startups
When to hire a first salesperson or a sales team?
I think a common issue is that start-ups try to hire salespeople too soon. Before hiring a salesperson or a whole sales team, firstly you need some confidence that you have product-market fit, and a strong go-to-market strategy. If you don’t — you are not ready to hire salespeople who will be able to drive repeatable sales. The chances are they are going to fail because you will have strange expectations of them.
Founders of new companies should realize that when they do their first sales, they have superpowers that the typical sales teams lack. When startups’ founders talk to potential clients, they have a huge amount of credibility with the person on the other side of the table, as they can change the product however they want, even change the business model if necessary. When the salesperson is coming in, it is a very different situation. In this case, your first hire should not be a classic sales leader but rather someone with the skill set to help you with your go-to-market strategy and finding product-market fit.
Who to hire as a first salesperson to an early-stage startup?
Hiring salespeople can be particularly tricky as they are simply great at selling themselves. Ben Horowitz has a great quote in his book The Hard Thing About Hard Things: “there are only two kinds of salespeople, they are either new or rich”.
I like people who are curious and interested in the business. Everyone knows the stereotype of the incredibly aggressive salesperson who sticks to the script and gets deals closed. I’m rather looking for people who can tell a story, who can articulate value to the client, who can bridge from what the client is saying about their business to the value that the company is trying to provide.
On top of that, there is this sort of magic that a salesperson needs to have. There is no doubt that when I think about the best salespeople I have met, everyone just loves them. They build rapport with others in their own way, very successfully. If you are avoiding a salesperson on your own team — it’s probably not a good sign.
Spending time with clients to understand their issues is key, and there is a certain type of person that will feel very comfortable being around clients. Oftentimes, founders are building a business because they miss a specific product themselves. which is a great start. However, there are times where the founder has no experience with a certain industry, and it was the case for us at Spotify, so we had to spend time with clients and understand their needs. It is great to look at data and make questionnaires but my experience is that the most crucial is spending time to uncover what is “the question behind the question behind the question”. That’s when you get this “AHA!” moment when you realize that someone is buying your product because of this and that.
What to do when it’s not working out with a sales person?
If I think about Horowitz’s “new and rich”, in the early stage startup salespeople are definitely not going to get rich. It is simply because there won’t be many sales. In this case, you are probably better off motivating them with equity participation, so they really think about the long-term value of the business. Later on, when sales get more repeatable, I think we often don’t coach people enough. We spend too much time on forecasting as management. Typically, we don’t hire for the right job, we don’t do references properly, we fail to onboard new team members correctly… Suddenly, they are six months in and they are not performing as you expected them to. On the other hand, people that are not doing great quickly amongst their peer group rarely seem to have radical improvements later on. As a founder or a sales lead, you should take a huge amount of personal criticism for not doing your due diligence, and not giving someone a chance to succeed. I also think that if someone is clearly adrift, it is very difficult to turn it around and it is often better to find a way that they can leave with a head held high and try something else.
The 2020 sales playbook
The business climate has changed in 2020 and we all need to rethink how we run sales in the “new normal”. Here are some tips on how to ‘wine and dine online’ in times of social distancing and how to remain good relationships with customers.
If you look at building relationships online, I don’t know anyone who came up with a great way of doing that. However, I think we should all start with being respectful of people’s time online. Just think about it — during a presentation, you don’t want the first 10 slides to be about the company’s history or a 1-hour demo of a product. We all really appreciate when people get right to the point.
When it comes to the evolution of the sales playbook, there have been significant changes, especially in the last few months. We have seen a huge digitalization of the sales process since I started. Back in the day, we were making old school phone calls from our desks, occasionally sending some emails, we were taking the clients for lunch meetings to build rapport and get to know their business. Whereas these days we all react in the same negative way if somebody cold calls us. The consumer or the professional buyer has so much more ability to get information online and navigate the sales process at their own pace. I think if sales lost a few tools because of that, what they have gained in terms of thinking about customer success is the ability to build communities of happy customers. Internally and externally we need to figure out how we should sell to each other.
The early days at Spotify
What made you join Spotify?
Daniel Ek, CEO of Spotify, told me about his idea of Spotify, and I thought “of course it makes sense that we all will be able to listen to music whenever we want, wherever we are”. Daniel, like many other great founders, has this ability to make huge ideas sound very easy to accomplish. I didn’t need much persuasion to quit my previous job and join his venture. One of the reasons I joined Spotify was the idea, but also the charisma of Daniel and his founding partner. Moreover, the fact that they have done successful things before which gave them the necessary credibility. On top of that, there was also the brilliant team of Swedish developers so the idea of sitting with them in a tiny apartment and building great things together was incredibly compelling.
What was your role in the early days at Spotify?
In the early days, the big focus was to sell great ads and provide a free service for the listeners. I came from an advertisement background and one of the things that Spotify wanted to do was launching an ad business. But before we could do that, we needed to get the record labels and people who make the music agree to let Spotify legally go out to the world.
Because of that, it quickly turned into a sales job. Many concerns of record labels made them reconsider the business model, and it became apparent that Spotify would have to move from being a free service funded by advertising to a freemium service with a premium subscription.
In order to launch an ad business, you need a few things to happen. You are selling the advertisers the access to people, and it gets tricky when you don’t have many people. But a lot of times you can tell the story and build credibility when they see the product and when they get to use it themselves.
This is the second article of the Startup First Hires series.
Previous article: Customer Success with Kelly Hook
This article was written by Karolina Szweda, Global Marketing Assoociate at Antler.
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