by • November 10, 2012 • Pitching & sellingComments (2)309

Why tech founders can’t hire in early salespeople

Spoiler: You can’t hire out sales because in the early days it’s about learning, not selling, and hired guns can’t bring back bad news.

At their peak, Groupon sales reps made 1250 calls per week to close 4 sales[1]. Once Groupon knew the math of that equation, they could throw money at the problem and scale a sales team. Until you have the roadmap nailed down, you can’t scale sales (it would be like throwing money at a big search campaign before you know your lifetime values and conversion rate).

Your sales roadmap[2] is a asset built up over time which undergoes the same innovation & refinement of a tech product. It takes time to get the roadmap solid. It’s as big of a deal as getting your viral loop working — it’s how you’re going to acquire customers at scale.

As a tech founder doing sales, you’ll find yourself constantly fantasising about hiring in a sales guy to take all your pain away.

The problem is, early stage sales isn’t about making money. It’s about finding out what people care about and figuring out what the sales roadmap looks like.

When you’re figuring this stuff out, there’s going to be bad news. Lots. And when hired guns bring back bad news, they either get fired or ignored. It’s the same reason you can’t outsource customer development. The bad news needs to be discovered by the founding team in order for it to be integrated strategically.

The founders have to do the early sales. Get help from wherever you can, but make sure to be in the meetings yourself. The goal is to discover and refine a repeatable sales roadmap. As soon as you’ve got that, you can hire it out. But while you’re still learning what works, it’s all you[3].

[1] Probably not true in all locations and not sure it’s up to date. This is based on conversations I had with Groupon folks in the London office over a year ago when they were at the height of scale fever.

[2] The roadmap is your funnel — the series of steps a prospect goes through before converting. Your pipeline is the leads who are currently within the funnel.

[3] The three workarounds are (1) to suffer through it, (2) to add sales guys to your founding team, or (3) to choose an idea which doesn’t rely on sales.

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2 Responses to Why tech founders can’t hire in early salespeople

  1. Michael Hann says:

    If you’re going to read one book on selling, make sure it’s SPIN Selling by Neil Rackham. Rob recommended this to me and it’s helped an unbelievable amount.

  2. Doug Johnson says:

    Excellent post. The great founders never stop selling. (Ellison, Jobs etc) But if you can’t rebut the competition like Larry Ellison it doesn’t mean your start up is doomed to failure. I think there is a strong advantage to adding a sales person to the founding team. (Or at least making them an early hire.) The important point is that some customer complaints can be rebutted. Some must be addressed by new features. If your team doesn’t include a pro who knows how to rebut objections, you will waste development resources, and take longer to find your repeatable road map.