Architecting Your GTM Motion

How to hire your first salesperson in a B2B Software Company (Part 1)

One of the most common questions We’ve been asked by founders goes something like this:

“My co-founder and I have been able to acquire the first batch of customers on our own and have an ARR of $XXX,XXX. We need to scale ourselves and hire a sales team...How do you hire a good first salesperson?” 

In listening and reading to what’s out there for advice, most people give founders advice that goes something like this: “Your first sales hire should be an “athlete” (aka - able to figure out a lot of things, hustle), be really hungry and love to make cold calls.”

Dig deeper.

While hiring for “allrounders” does have a lot of merit (problem solving, hunger and grit); I believe it avoids the most important piece of advice for founders. By giving the advice of looking for a generalist, you are missing a critical step to help sales succeed at your company. Instead of hiring for someone to figure it out for you, take a step further and think critically about how you will be successful with your strengths in the market. What is your ideal go-to-market motion and what are the skill-sets needed to execute on that strategy?

Choosing the Ideal GTM Motion.

If you’ve been reading-up on this topic, I’m sure you’ve seen people talk about Go-To-Market Motions in a bunch of different ways: 

“They don’t have a sales team...The product sells itself!”, “Their enterprise sales team is excellent and closes massive deals!” and my personal favorite “They are out-executing the competition, despite having a worse product!” Each of these claims is a huge compliment to the underlying company, but they can be pretty misleading for founders early on. The goal of this post is to help you 1) choose the correct motion for your business and 2) give you an idea of the skills needed to execute on those strategies. Let’s jump in…

A tale of two companies.

Here is a chart of two different companies and the corresponding metrics, strategies and mindsets that lend to their success:

After reviewing the above chart, hopefully you are starting to place your company into one bucket or the other. Things to consider as you think about where your company fits:

  • What is an account worth to your company? How long will it take to realize that value?

    • If you “land” in accounts with a small amount of money ($50/mo.), you may want to consider a technology sales motion and the strength of your early GTM Team should be demand gen, SEO, ads, etc.

    • If you feel that you could accelerate the value of the “land” much higher (at least $15-20k/year), then you are starting to get into solution sales territory.

  • What are your competitors in the space doing? How good is their marketing in relation to how many salespeople they have on the team? Are they doing it right or wrong? 

    • Oftentimes you can beat a competitor or carve out a segment by having a different approach on Go-To-Market. HubSpot (bottoms-up) vs. Marketo (tops-down) & NewRelic (bottoms-up) vs. AppDynamics (tops-down) are great examples of differing models in the same space leading to great outcomes. 

  • Is there something about our product that requires a salesperson?

    • If your product supports many teams at once (analytics platforms), you often need a salesperson to get all of the decision makers around a table to agree before they can purchase. This is hard to replace with technology and sales can be that bridge. 

  • Where do you want to position your company in the market? Is your product service-heavy?

    • We often see companies in these spaces choosing to focus on solution sales as it allows for more bespoke value-based pricing vs. transparent/transactional pricing. 

Is one type of company worth more than the other?

Naturally, founders will want to maximize their outcomes, but it’s important to make the decision for your GTM Motion based on what you feel most confident about executing against. For those that feel they can do both equally well, it’s worth noting that both paths have produced great outcomes. Tomasz Tunguz recently wrote a great article that explores this exact question. Here is the key quote:

Ultimately, the data shows great businesses can be built using both sales methodologies. We can’t prove with this data set that there are meaningful differences in any of four measures of startup efficiency including revenue growth, gross margin, profitability or cash raised. Perhaps that will change as the many private software companies go public and we can analyze more data from the relatively newer Bottoms Up approach. But for now, we can say both approaches produce equally efficient companies. - Tomasz Tunguz

Ok...so who do I hire?

Ok, if you’ve made it this far, you should have a feel for the motion in which you want to bring salespeople into. Keeping in mind that these are your first sales hires, here is the advice that I’d give for each motion: 

As discussed above, a technology sales motion tends to rely more on the strength of the marketing team to create sales opportunities. This shifts the role of the sales team to “fulfill demand” and be more of a conversion enabler. Companies that do this well: Slack, Atlassian, Salesforce, etc. 

While this is great when it works, it also makes it hard for sales to be the real “driver” of the business when marketing is having a hard time getting channels up and running. Alternatively in a solution sales motion, when marketing isn’t going perfectly, there is an expectation on the sales team to find and create their own sales opportunities. Since we are now having sales work higher in the acquisition funnel; we want to have someone that is a bit more senior and has a deep understanding of the target customer for our solution. In both motions however, we think it’s critical to hire for trajectory vs. experience at the early phases of the company. This approach allows you to have a lower total investment into sales as you learn how it works. Once you see either motion really taking off, you can think about adding deeper experience and management from there. 

Now that we have identified the type of salesperson that we’d like to add to the team, we need to set-up the perfect interview process to decide between different candidates. In the following article, we will be interviewing sales managers from both model types to ask them which questions they ask candidates during the interview process and dive deeper into the topic of hiring your early sales people. 

Hopefully this post will help you get started and if you have any questions, feel free to reach out!

Thanks,

Matt Althauser

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About Polychrome:
Polychrome is a new type of investment firm. We help our portfolio companies unlock the next level of growth through our GTM expertise. Check us out at polychromecapital.com