How to hire your first salesperson

This is a re-post from The Thirteens blog, subscribe for start-up insights from a start-up superteam

In this interview, we will unpack some dos and don’t when you’re ready to hire your first sales person. We address questions such as:

- When is the right time to hire the sales person

- Who to look for?

- How to help them be successful

Shayani: Lusi I’m excited to talk to you about all things how to make money! Can you start off by giving us a little bit about your experience and what you’ve done with different companies?
Lusi: I have been both a founder myself, as well as founding team or early commercial team member for four different startups. In addition, I’ve been an advisor for over 20 different startups with a focus on enterprise sales, and particularly in the healthcare and life sciences field. I started in medical device (selling to physicians and healthcare systems), my more recent experience also includes life sciences, pharma and biotech. So my perspective comes from sales and go to market to larger enterprises, and more regulated industries in particular.

Shayani: When you think about founder as well as the Chief Commercial Officer, I’m curious on both ends, do you see the same perspective of when one should hire the first salesperson? Is it different? Why is this role so important?
Lusi: Bringing the right sales person on board can accelerate your startup’s trajectory, opening doors to new companies, and drive speed of adoption. However, there’s a fine line between hiring at the right time and rushing into it. Many startups make the mistake of hiring their first sales person too early, before having a well-defined sales process and target audience. So, before diving in, founders need to lay the groundwork for success.

Shayani: So when do I hire the first salesperson?
Lusi: In terms of when to bring this person on, it’s not measured by length, like six months or one year because obviously startups go through different phases. And in the healthcare industry, many products are regulated, so you actually can’t sell without sometimes an FDA clearance.

I would say the right time is more defined by stages. The founders should be the one that’s talking to customers or potential customers. They should be the one to find what is the value and find product market fit first. We’ll have some additional blog articles about what is exactly product market fit and how do you find that, but typically, you want to be able to articulate your value in really concrete terms that matter to the business. Ideally you already have two to three pilots already going on. These might not be large contract deals from a revenue perspective, but in the field, real world experience of your product working. If you can have some testimonials or case studies, or a reference, the more that you can put in “the bag” of that salesperson, the better.

What you don’t have for most startups is a playbook. And that’s where this first salesperson comes in. Because if you hire someone from a large company, typically they expect a playbook and a lot of resources and material. Oftentimes they are backed by a large brand. So when you are calling somebody and you say “I’m calling from Google”, everyone has heard of you. But if you’re calling somebody say, “I’m calling from startup X”, no one has heard of you. And so the way you enter is very different. It’s more about value creation value generation, a more consultative sales.

Shayani: I heard some key attributes in your answer above already, but let’s unpack that more, who should you be looking for when hiring?
Lusi: This first salesperson should be someone that comes from other startups and know how to sell a no-name brand. They know how to hustle but is also able to do this consultative sales. They know how to understand and build trust with larger companies because that’s always a question mark. Will this startup be around that I’m trusting my data, my patient’s data, my proprietary IP to?
Later on as this person builds a repeatable process then they should be the one to to write out your playbook, starting with extracting what’s in the founders head and the processes that the founder has already done. And adding to that different steps that really tighten the process. Whether it’s putting it into a CRM or having more of an account strategy and pre and post call prep. Those are all specific things that this person can put into place.

Shayani: Do you see the value in hiring people from the same domain because they might have existing relationships or a rolodex?
Lusi: You can find people from similar domains, but I would put caution on that statement.
Most industries are disrupted by outsiders. Oftentimes, the founder might be from someone from an outside domain. Perhaps you have AI experience but you don’t necessarily know understand radiology as well. So that salesperson could complement you by having that particular domain.
That said, be VERY careful if that takes you to a candidate from a large company. You may not be able to find such a specific match such as a start-up salesperson who have also sold a software product to radiology. However, it is helpful to find someone who have sold to say health care systems, and understand how to navigating a healthcare system, including their concerns, requirements of IT such as connecting with EPIC or a PACs system, processes, routes of entry (such as innovation arm), etc.

The caution would be, an over emphasis on brand and people with a large rolodex in your specific field. Those people could be helpful to have on your advisory board to open doors for you. But it is absolutely a mistake to hire that person as your first full time salesperson. They can open doors but you as the founder or the founding team, really still have to close deals.

Shayani: So let’s say the founders have decided they’ve hit the milestones and have product market fit, and they’re ready to hire. Are there things they could do to prepare for this important hire?
Lusi: The preparation shouldn’t be a separate task, this really just should be part of your daily work regardless of the hire, to set the grounds for growth.
The founder should be writing up deal reviews and taking meticulous notes on customer interactions:

• how did you come about the deal?
• what are the things that worked?
• what values resonated?

Document, Document, Document

I know sometimes founders start with just a scratch paper or calls, and you’re going from call to call and don’t necessarily find the time to document. Nowadays there are so many transcription services such as Otter.ai that makes this super easy, even if it’s really rough documentation, that’s better than nothing. Generative AI also has promises to help you summarize those later on if needed.

Shayani: So transitioning to once this person is hired, how should you set them up for success?
Lusi: Once you hire somebody, it’s appealing to say, “I’m done, this is a part I can let go and focus on something else.” A founder is so busy, doing product, fundraising, regulatory, company formation, hiring, etc. But that is the wrong way to transition.
Oftentimes there’s an an expectation that if the founder is selling X amount, and they bring in a big brand name salesperson, which typically require a quite significant upfront salary (vs. equity), that this person will be able to 5x my sales. These are unrealistic projections that typically does not come to fruition. Don’t necessarily expect a hockey stick growth if the right things aren’t in place. This person is not going to be a magic pill.
The founder should consider at least the first six months allowing the salesperson to shadow as much as possible. The most important thing that this new person can do is to pull all the knowledge out of your head, and they can’t do that if they’re not spending time with you. Of course, this person will bring in structure and expertise. They may open doors, (though I wouldn’t make that a necessary condition related to your previous question of do they have to be in this specific domain, they may not know 200 radiologists but they should know how to get them.)
It should be a co-selling process between the founder and the first salesperson for quite a bit of time. And then as this person can be more independent, the founder should still be involved in closing the deal. There is a founder magic, there’s a reason that you have the vision and passion. Your first customers are buying “you”, because you have no other track record or credibility to show.

Shayani: So when can the founder get more leverage and let go?
Lusi: In the beginning, I would say the founder should be involved in the whole thing. Then, the founder can step back from the top of the funnel, say you don’t need to do the prospecting or intro calls anymore. However, in the context of enterprise sales, you’re not selling to restaurants or small mom and pop shops, where you’re gonna have a few deals that really make or break the company and where you learn from and you’re using that brand and case study. So I would say the founders should be involved for quite a long time towards the closing.

After closing, there’s customer success. And that’s one area that startups often neglect, they they get the deal and they hunt for for the next one until the current deal becomes squeaky. This is an entire different conversation about how do you focus on customer success and doubling down and making sure that those first customers are really positive net promoters of your product.

Shayani: You’re talking about bringing in this person who can start to create a playbook for future hires or even just getting more clarity into the sales process for themselves. I’m curious about the balance between being a really good athlete versus being the coach?
Lusi: Since the context we’re talking about is enterprise sales, you’re gonna have less at bat but you need to be more strategic with each. This would be completely different if this was a consumer product or an SMB product.

This person absolutely should be able to be an athlete, you shouldn’t hire someone who then needs to immediately hire other people to do sales for you. But it should be an athlete that is thoughtful and reflective. So that even though I would say 80% of their time is not writing this playbook, they’re thinking about. “What did I learn from each customer interaction about whether or not they should be the target, their pain points, and what solutions they’re looking for?”

This person is your eyes, ears, and feet so they should be proactive in feeding feedback from the customers back to the product teams to determine what should be built and how it’s prioritized.

It’s someone who was capable of being both but is willing and able to do the athlete job for the majority of their time (say 80/20).

The documentation this person is doing should be a continuation of what the founder has already started. This is what also makes this person different than a later salesperson you’d hire at scale. There’s always the age old battle of sales managers getting sales people to update their CRM, and often times that’s not only for insight but an activity check. But for this person, their notes should not be checkboxes of “I emailed 3x and called 4x” but pages long in terms of, here’s what the customer wanted, here’s what they said, here’s where we failed.

Most likely you won’t have a customer success function as an early start startup. So this person will also follow that customer through deployment and implementation and continuing to get those feedback of are we actually meeting their pain points.

People from large companies don’t typically go through the full customer success lifecycle. There are some account managers for bigger accounts but they’ll manage one account, you don’t want someone like that. This first salesperson needs to be able to walk the customers through their entire journey, not just the sales process.

Shayani: We talked about attributes to look for in your first sales person. How do you know that you’ve made a good hire? That may not be a outsized revenue target at least in the beginning.
Lusi: Some things to measure include:

• How many at bats are you getting? How many times are you getting to talk to the customer? So the activity has to be there. It can’t just be amazing insight from one customer interaction. The activity for sure has to be there and that goes back to the athlete coach question you asked too. If this person is not willing to hustle and to work and to get you in front of people that is not a good fit. It’s not just activity such as “I made 100 calls and sent 100 emails”, it’s more how many customer interactions am I getting and what type of feedback am I getting from that and are we getting better?
• Second would be progression in terms of how does your pipeline looks? So even if those things aren’t closed, is the pipeline filling up? Are you starting to get a more repeatable process? Are you able to articulate that better each time and if this person is really documenting that and sending feedback to product, you should be able to see that?
• As an organization as a whole, are you getting closer to really understanding customer value and capturing some of that value? This is not just sales but also following a number of customers end to end, both the sales and the customer success.

Shayani: When do you know if you’re ready to hire another person? And do you see companies hiring another salesperson or a customer success person first?
Lusi: I would hire a couple of positions before adding another sales team member.

On the sales side, you can start to fill out the top of funnel, for example in developing a BDR / SDR program where they can really generate those top of funnel for you. At this point, you should have a very clear, repeatable message. You’re not testing your message that much anymore. Of course, there’s still a startup and you’re still testing it, but it should be clear, repeatable and not changing each time. You should know who your target personas are, what they care about, and have succinct value messaging that you can target them. So hiring someone at the top of the funnel can help this person generate those at bats.

Second, on the customer success side, it depends on what deployment and implementation entails. For some of the startups I’ve been a part of, it was working with the imaging tech to review images. You could hire IT support, clinical support, etc depending on the product. But all of those should roll up with a particular account success plan and should be quarterback by the salesperson still.

From there, as you build up those functions, then that’s where you would hire your second or your third salesperson.

One mistake that I’ve seen is hiring too many salespeople, but then not filling their times with appointment, your second and your third salesperson and will look a bit more like a traditional salesperson with a playbook. Of course, they’re still early, they still have to hunt. But typically I find that the BDRs are more cost effective to fill your funnel than a full fledged salesperson, so when you do have a salesperson you want that person’s calendar to be full of calls daily. They should be hunting themselves but you want their calendar to be full.

Shayani: We talked about this entire process from preparing to hiring to scaling. If you had a summarize, what are the top three stumbling blocks that you founders should avoid?
Lusi: One is hiring someone with brand and glamour from large company who not thrive in a startup environment.

The second is just relegating the sales to that person once hired, instead of being staying very involved in the pipeline because you’re the founder, you have the founder magic and you have to transfer the founder magic and that doesn’t take place with two calls and in the document.

Third, is hiring too many salespeople too quickly, make it too top heavy in terms of costs. An enterprise salesperson who can do the end to end closing will always be more expensive than someone who’s doing just a portion of the work. So really building up your pipeline and making sure that when you do bring in those expensive salespeople that you have a pipeline filled, you have materials for them, and you have a playbook ready for them.

Shayani: Does any of this vary by industry?
Lusi: The majority of my experiences is in healthcare and life sciences but this for sure is applicable for this is more for larger enterprise sales where it takes a longer sales cycle. You’re looking at, maybe in the beginning over a year to close that deal on average. You can possibly bring that down to 6–9 months, and then a subsegment to 3–6 months, of course depending on your industry. It is a much more strategic sale to requires trust building and multiple levels of stakeholders. But I do think a lot of this apply across enterprise sales, for example in FinTech, when you’re talking to banks who have data and personal information, as well as a reputation and brand to uphold.

Shayani: I’ve learned a lot about what to think about when hiring your first salesperson. There are a lot of other things brought up to unpack such as customer success, scaling, and onboarding successfully. Hopefully, the founders reading this can avoid making some expensive mistakes in cost or time and this really sets them up. I look forward to unpacking this more with you.

About:

Shayani and Lusi are two of the partners of your start-up superteam, The Thirteens, a start-up consultancy of fractional executives covering multiple functions and industries, super charging your start-up to the next level.