Insight April 20, 2017 TRN Team Writer

Startups, Avoidable Mistakes, and “Stretch VPs” – What to think about when you grow your team.

 Starting out:

Building and integrating a sales team is an inexact science and the number of variables can be hard to manage. Often when a startup is in its infancy most of the business development is carried out by the founder. This often works well and drives sales early on, as industry knowledge and a strong understanding of product features provide value to the customer. However, if there is not a structure in place problems become apparent once the need to scale is realized.

Avoid the obvious mistakes:

Mistakes usually occur once a startup has closed a round of funding and are set for rapid growth. Many founders believe that investing in business development personnel is the number one priority. This action is often driven by a need to provide a return on investment (ROI). However, just hiring a sales team will not always achieve the returns desired. A common mistake that founders make, which can become costly, is removing themselves from sales too early. This repeatedly results in founders failing to formulate a fundamental understanding of the customer, product market fit, and the complete sales process. Founders who do not have clarity in these areas run the risk of diluting the level of knowledge, resulting in an inability to transfer direct and necessary information to the new sales team.

Build a robust system:

Before adding a sales team, a robust and structured sales strategy that can handle increased information and sales data must be created. Often at this point founders forget to take a step back and strategically plan for the next stage of growth, which will limit the number of costly mistakes down the road. Investing in a reliable CRM and developing a pipeline strategy will solve problems such as sharing large amounts of information. However, this must also be chosen with the current needs of the company in mind. Frequently, new businesses overpay for systems which contain functions that are not needed for a startup sales team. The goal should always be to gain and retain relevant data which can be used efficiently by multiple members of a sales team.

Choosing the right hire:

Once the framework has been put in place and hiring is ready to begin founders must address two main objectives:

  • Continue having a hands-on approach to sales
  • Understand the correct sales job profile for a growing start up

If a founder is adamant on stepping away from sales, then a senior figure needs to be positioned in their place. This can be achieved in multiple ways depending on the exact need. One way is hiring a “Stretch VP”. These profiles often have the experience and skillsets to execute rapid sales growth and understand what is required to hit investor goals.

Once a leader is in place and volume is needed on the sales team then it is important to hire the correct profile. Be wary of hiring big enterprise profile, often they are not a good fit. Selling for companies with an established brand on a basic level often requires only figuring out how to provide the best value to the customer at the right price.

When selling for a startup often a customer must be sold in three stages:

  • Step 1: A customer must first be sold on the idea that they have a problem they are not yet aware of.
  • Step 2: A customer must be made aware there is a solution to the problem.
  • Step 3: A customer must be convinced that the company is credible at solving the problem, then and only then can a price be negotiated.

Big enterprise profiles struggle with these three stages and often can’t adapt. Founders are better off hiring a profile with scrappy experience. These profiles are resourceful and can often work independently to generate interest and inbound leads. Big enterprise hires often have greater resources available such as marketing who are delivering hot leads. A lot of hustle is needed when starting out and profiles that often have five or more years’ experience in an enterprise sales environment are almost always bad first hires for a startup sales teams.

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