10 Lessons Learned from Founder-Led Sales for Startups

Founder-led sales is the part of the startup journey post-fundraise where the founders themselves are handling the majority of the go-to-market (GTM) and sales activities. This is typically within the post-seed pre-Series A part of the company building process.

Founder led

Last week, my partners at Race Capital hosted a private discussion amongst our founders on this topic and the core challenges they are facing. I want to share the top 10 lessons learned from the discussion broadly to help other founders who are in similar situations.

-> If you’re a founder and would like to sign up for future discussions we host, you can sign up here.

Here are the top 10 lessons learned from technical founders who are all in this part of the company building journey:

1. First 20 Customers Must Be Sold Closed by the Founder(s) — For the first 20 customers, the founder must own this process and unfortunately cannot be outsourced to a salesperson / GTM person. The goal is to make the sales process a repeatable one and the product achieves product-market-fit.
2. $1M ARR is the Magic Number — The goal with founder-led sales is to get to 10+ marquee customers AND either $1M+ ARR before Series-A OR significant open source adoption. This combination will give you the best shot at raising a Series-A.
3. Develop Your Ideal Customer Profile — Two of the most important activities a founder can do during this process are:
   - Develop a specific ideal customer profile (ICP) to help yourself target more specifically who your core customer segment is. (company persona, buyer persona, discovery questions, etc).
   - Use the sales process to understand the customer and use-case more holistically and to integrate that feedback back into your product. The Sales <> Feedback <> Product cycle is a never ending cycle to improve your product.
4. For Infrastructure Startups, Leverage Open Source — Specifically for infrastructure startups, open source adoption helps tremendously as it drives bottoms up adoption from developers using your product. Many big customers come through the individual developers on their team using new open source products.
5. Content Driven Marketing — Podcasts, Blogs, Videos — etc have mixed results in terms of driving sales. They however do help with sales engagement as many of the customers in process will do research on your company, content you are writing, and want to see you active in the market.
6. Don’t be shy about Outbound Sales — If your average contract value is high enough (ACV), one the best options is direct sales. As a new early stage startup you won’t have a log of brand recognition or audience to work with so outbound combined with a very specific ICP (ideal customer profile) can be a good path to take.
7. Drive Engagement via Open Source / Github / Discord — Are all great places to build early communities of users/developers/customers and get feedback and inroads into enterprise customers. Many of the founders hosted public roadmaps, product release notes, and incorporated feature requests to their communities in these channels.
8. Founder-led sales never stops and continues post PMF — In our discussion we had founders that achieved over $100M+ in revenue, and even at scale the technical founders were heavily involved in the sales process. Major F500 customers will always want their exec team to build a relationship with the founders of the company if they are signing major customer contracts.
9. Learn to Say No to Your Customers Founders had to make the hard decision of saying no to large marquee customers because they wanted very specific custom features that only one customer would use. The founders should always maintain control over the product roadmap and not fall into the trap of becoming a professional services business.
10. Be careful about selling to other early stage companies (seed, Series A). Even if these customers pay, they can churn quickly, or may eventually go out of business themselves. Don’t lose sight of selling to a more scalable customer base.