A Startup's Biggest Pitfall Is Not Finding the Right Salesperson
A startup cannot survive without revenue, and more important, revenue growth that will impress investors. Often, this success rests squarely on the shoulders of your sales team. Therefore, your sales team will make or break your success. Members of your sales team are arguably the most important hires you are going to make. You have to get it right!
The problem is, more often than not, it is so easy to get it wrong. Especially as a first time entrepreneur that does not have past experience in hiring salespeople and knowing the right questions to ask that are specifically relevant for your business. I have previously written about the 1,024 types of salespeople that are out there, so it is critical you are perfectly clear on what you are looking for before you start recruiting.
To layer on additional pitfalls here, salespeople are salespeople at the end of the day. It is in their core DNA to tell you whatever they think you need to hear to close the deal. Regardless of whether it is really what they are comfortable with.
Not all salespeople thrive in an unstructured and chaotic startup environment. Not all salespeople are willing to roll up their sleeves and do the dirty work themselves, without a support team helping them, especially if they have a history of managing other salespeople.
The only way to truly know if you are making a well-educated offer is to ask the right questions as it relates to the above issues, and speak to references. Preferably ones you dig up on your own, and not the ones they provided during the interview process. The other key thing is learning how to “read between the lines” on their resumes. Even if they have all the right past companies or positions, if you see a lot of job hops in a salesperson’s resume, that is typically a very ominous indicator of future success (or lack thereof, in this case). So tread cautiously in those situations. This post I wrote on how to screen salesperson candidates may help you here.
The sad reality is, as well as you screen candidates and ask all the right questions, you are only going to get it right one in every three attempts, based on average historical experience. That means you only have a 33 percent chance for success in hitting your sales targets with every hire. That is why I suggest testing three salespeople during a 90-day probationary period first, before deciding on which one you want to move forward with.
The problem with that strategy is not many sales candidates are willing to play that game. Sometimes, you just have to take the leap and hope you got it right. Structure their compensation package in a manner that is heavily weighted towards pay for performance (heavy on commissions, light on salary, until they are proven).
The core issues at hand here are the following: startups often have limited capital, and the worst thing you can do is waste it on underperforming sales staff members; and the longer a bad salesperson is in place, the further out the timeline will be before material revenues will be had (especially in long sales cycle companies that can be up to two years in the making).
The combination of these two elements can often be the nail in the coffin for most startups -- wasted expense plus lost revenues being the ultimate recipe for disaster.
But, hey, if building a startup was easy, anyone would do it. So saddle up, and get ready for one heck of a ride in building your revenues.