My impression is companies struggle when it comes time to assign quotas to salespeople. The places I've seen do it right have support from someone (CFO?) who has had experience in a disciplined environment, and wants to increase predictability of revenue. I've seen small (100 employee) places get it right and large (1500 employee) places not. The key is the support structure for the sales force.
thanks for asking this question & sorry for the sales lingo :)
when I say sales model what I mean is the most successful/feasible way to sell your product.
is it via inside sales (people sending emails, making calls and giving online demos) or field sales ( people going door to door or flying to large enterprise customers for meetings etc) or a combination of both.
are you getting your leads via marketing (inbound) or do you have to do cold outreach (outbound) or a combination of both.
what tools and process do you use to sell
what is the average time it takes you to close a deal
what's the average deal size a sales person can close
etc etc
all these factors and a bunch more would make up your sales model.
probably a good idea to write a post dedicated to this subject but I hope this clarifies it a bit :)
I'll admit that this is the first time a post like this has convinced me to sign up for something -- I'm going to do an "office hour" with them. I'm just starting some small b2b sales for my startup... I have 5 years technical sales experience, but this can't hurt!
If anyone's ever spoken with them or used their service before, I'd love to hear about it!
I can't upvote this plan enough. Well done, Steli.
We're transitioning into stage 2 right now which has been an exciting ride, this is basically exactly the playbook we're running.
Our biggest challenge has been finding the right combination of hunger, fearlessness, & cunning people to bring on as the core of our sales team (if you're out there, shoot me an email, we'd love to meet you)
I suspect that Lemkin would disagree with the order here, FYI. Lemkin clearly states on sasstr.com and quora that he thinks you essentially hire 2 sales reps, then a great VP of sales.
I'm a big fan of Lemkin but might disagree here although I'm not sure if it's semantics or if we truly disagree.
I think after you have just 2 reps it's usually too early to hire an experienced VP of Sales although I guess it's fine if you hire someone and give them that title.
Someone who is currently a director of sales or sales manager might be better for phase 2 although you should start looking for a VP as early as 2 reps since it's going to take a very long time to find the right fit.
Great post! I browsed your site some more, and found a video of a presentation you gave. Asking for the close is killer. In retrospect too many of my first couple of calls ended with... "So uh yeah, I'll email you I guess."
Me and my cofounder have been doing test-runs of sales just to test if there was interest in our market. We made a note to take time out of developing to call 20 vendors a day. Some things we found:
1) Doing cold alone is nerve-racking, doing sales with a friend is actually pretty fun. It's almost nostalgic of crank-calling people as a kid. You can joke about the interesting run-ins you have with vendors. My cofounder and I grab snacks and just spend an afternoon calling.
2) We rate each call with "likelihood ratings (1-10 rating of how the call went). These are just qualitative ratings about the disposition of the caller on the other line. Every 50 or so we take note of what language improves the mood, and what turns people off. This way we're consistently improving our pitch.
3) Early on we let the initial tone of the calls dictate their end result. Too many calls ended more abruptly than they should have.(because we perceived that the other end was too disinterested to sway.) But we quickly noted was that many of the vendors had the same objections. It was an easy fix, just come up with a list of simple, logical retorts. There's many calls that we talked out of a ditch. -It's like when you solve yourself out of a cluster-fuck in 2048 :)
4) I'm not a very extroverted person, I don't have a marketing background. But I've actually come to like the calls. The first call of the day is always the hardest. The initial dip into a chilly pool is unpleasant, but you get over it much quicker than you would think. I talked to many interesting people just through cold calls. At first I scoured my network trying to find someone to delegate this task to, now it's part of the daily work schedule.
5) Ask for the close, just let them say "No". Don't dance around it. In the bigger picture who cares that one person said "No".
TL,DR Technical Cofounders can operate telephones; thus they can make sales calls. Make a structure, log objections, find patterns. (It's fun.)
You don't think anyone but white guys can be salespeople? I'm just curious why you'd choose such an image, especially given the fire Y Combinator is under for systematically excluding and under funding women and minorities.
I have only a feeble knowledge of American football, still I'll employ the metaphor to put forward a thesis:
Good B2B sales people are like wide receivers, they can run like the Hades, provided there is a ball and it gets thrown to them.
If the receiver has to run into the outfield & then come back to say we need to inflate this ball some more - worse, starts looking around for a pump - that's close to being finished.
The founder bears the responsibility of ensuring there is a properly inflated ball, and only then start to pass it. This is a great responsibility, coming on top of the taxing burden of creating a new product out of thin air & putting the show together.
It's good that the founder performs the initial sales function, but this is also where early adopters can mislead the product fit for (eventually) the real paying customers. At the least, do all the 'pivoting' before the wide receivers come into the game.
21 comments
[ 0.35 ms ] story [ 55.5 ms ] threadCreating the right commission/compensation structure is super tough and crucial to create a scalable sales force.
In my experience that's not the first challenge startup founders have when they start their sales team.
First, figure out what sales channels/models are predictable and repeatable for your product/market.
Once you've validated a lot of assumptions reg sales model you can move on and worry about sales execution & scalability etc.
And at that point you better bring in someone who's done it before and knows how to create commission structures that will work for your company
I'm trying to understand startup B2B sales as well and I'm trying to understand "sales terminology 101 for tech founders"
when I say sales model what I mean is the most successful/feasible way to sell your product.
is it via inside sales (people sending emails, making calls and giving online demos) or field sales ( people going door to door or flying to large enterprise customers for meetings etc) or a combination of both.
are you getting your leads via marketing (inbound) or do you have to do cold outreach (outbound) or a combination of both.
what tools and process do you use to sell what is the average time it takes you to close a deal what's the average deal size a sales person can close etc etc
all these factors and a bunch more would make up your sales model.
probably a good idea to write a post dedicated to this subject but I hope this clarifies it a bit :)
I hope you write that blog post ;)
I'll admit that this is the first time a post like this has convinced me to sign up for something -- I'm going to do an "office hour" with them. I'm just starting some small b2b sales for my startup... I have 5 years technical sales experience, but this can't hurt!
If anyone's ever spoken with them or used their service before, I'd love to hear about it!
We're transitioning into stage 2 right now which has been an exciting ride, this is basically exactly the playbook we're running.
Our biggest challenge has been finding the right combination of hunger, fearlessness, & cunning people to bring on as the core of our sales team (if you're out there, shoot me an email, we'd love to meet you)
He also states that on their blog. http://blog.close.io/how-to-hire-your-first-vp-sales-and-not...
I'm a big fan of Lemkin but might disagree here although I'm not sure if it's semantics or if we truly disagree.
I think after you have just 2 reps it's usually too early to hire an experienced VP of Sales although I guess it's fine if you hire someone and give them that title.
Someone who is currently a director of sales or sales manager might be better for phase 2 although you should start looking for a VP as early as 2 reps since it's going to take a very long time to find the right fit.
Me and my cofounder have been doing test-runs of sales just to test if there was interest in our market. We made a note to take time out of developing to call 20 vendors a day. Some things we found:
1) Doing cold alone is nerve-racking, doing sales with a friend is actually pretty fun. It's almost nostalgic of crank-calling people as a kid. You can joke about the interesting run-ins you have with vendors. My cofounder and I grab snacks and just spend an afternoon calling.
2) We rate each call with "likelihood ratings (1-10 rating of how the call went). These are just qualitative ratings about the disposition of the caller on the other line. Every 50 or so we take note of what language improves the mood, and what turns people off. This way we're consistently improving our pitch.
3) Early on we let the initial tone of the calls dictate their end result. Too many calls ended more abruptly than they should have.(because we perceived that the other end was too disinterested to sway.) But we quickly noted was that many of the vendors had the same objections. It was an easy fix, just come up with a list of simple, logical retorts. There's many calls that we talked out of a ditch. -It's like when you solve yourself out of a cluster-fuck in 2048 :)
4) I'm not a very extroverted person, I don't have a marketing background. But I've actually come to like the calls. The first call of the day is always the hardest. The initial dip into a chilly pool is unpleasant, but you get over it much quicker than you would think. I talked to many interesting people just through cold calls. At first I scoured my network trying to find someone to delegate this task to, now it's part of the daily work schedule.
5) Ask for the close, just let them say "No". Don't dance around it. In the bigger picture who cares that one person said "No".
TL,DR Technical Cofounders can operate telephones; thus they can make sales calls. Make a structure, log objections, find patterns. (It's fun.)
You don't think anyone but white guys can be salespeople? I'm just curious why you'd choose such an image, especially given the fire Y Combinator is under for systematically excluding and under funding women and minorities.
Also, they are not fat-positive and I don't think I saw a single transgendered person in any of them.
But I think you have a point about the choice of image.
Good B2B sales people are like wide receivers, they can run like the Hades, provided there is a ball and it gets thrown to them.
If the receiver has to run into the outfield & then come back to say we need to inflate this ball some more - worse, starts looking around for a pump - that's close to being finished.
The founder bears the responsibility of ensuring there is a properly inflated ball, and only then start to pass it. This is a great responsibility, coming on top of the taxing burden of creating a new product out of thin air & putting the show together.
It's good that the founder performs the initial sales function, but this is also where early adopters can mislead the product fit for (eventually) the real paying customers. At the least, do all the 'pivoting' before the wide receivers come into the game.