In the careful parlance of business, plugging skilled salespeople into a startup is ‘mission critical’.

A more direct translation would be ‘hideously expensive’ and ‘easy to botch’.

In the MacGyver environment of a startup, salespeople need a swiss army knife of skills: biz-dev, marketing, strategic know-how and a sprinkling of technical savvy. Failure is common and high performers are needles in the proverbial haystack.

“Sales professionals will be the most difficult hiring decisions startups make,” says Teresa Spangler, VP of Strategic Business Initiatives at Headway Corporate Resources. According to Teresa, whose company helps organizations of all sizes find sales talent, sales attrition over the first three years tops 30%.

“60% of sales hires don’t make it past their first year”—Spangler

For startups, squandering money and time on a bad sales hire is a cost they simply cannot afford.

“The cost of losing a first-year sales hire is more than $120,000”

WISDOM FROM THE TRENCHES

So what’s a startup to do? Red Canary sought the advice of Kevin Dwyer, (former) CEO of Toronto-based Shoplogix. Kevin built a very successful sales organization at Shoplogix and has contributed to six startups over his 30-year career.

“At the end of the day, if you’re not turning revenue, the rest doesn’t matter.”- Kevin Dwyer, former CEO, Shoplogix

FINDING SOFTWARE SALES TALENT

Kevin Dwyer,
CEO
Shoplogix

The first place Kevin looks when he needs to fill a sales role is his own Rolodex, a fraternity who have fought with him in startup trenches past.

“Having developed a strong network of people that have proven track records, whenever I change my jersey I look at [a] pool of candidates that have traditionally over-performed and over-delivered. I’m going to try to put those feet on the street as quickly as I can”.

Kevin suggests that for tech-leaning founders (and the VCs who fund them) bringing on an executive with an antecedent network of sales contacts should be a priority.

Headhunters, not job sites, are the next best dowsing rod for sales talent. In addition to scouting gold-standard candidates, headhunters act as quality control, filtering out weak links and using their networks to sift for true expertise.

Teresa Spangler recommends using headhunters to plumb competitors for possible talent:

“Go and get the people who are working for the 4, 5 and 6th place competitors – [like you] they [don’t] have the brand name to carry them – they love selling and they’re hungry. They will help to build [your] value proposition.”

FINDING SOFTWARE STARTUP SALES TALENT

Kevin Dwyer takes a no-nonsense approach to hiring software salespeople. To him, sales is binary – either the salesperson outperformed quota or did not.

“[Find] a CEO with the skill set to get the business launched…someone who has a rolodex and a network of contacts that can rapidly build out a revenue generating engine”- Kevin Dwyer

However, he’s quick to point out that previous startup experience and the ability to paint the big picture—not big numbers—are fundamental hiring criteria.

“This is a conceptual game, people are investing money in something they can’t hold or feel.”—Kevin Dwyer

Selling (startup) software takes a host of skills, says Kevin. Chief among them is the ability to conceptualize.

As he explains it, software salespeople are hawking intellectual property from a position where they have little to no support infrastructure or brand recognition.

Kevin, who spends roughly 90 minutes with a candidate, feels that getting someone to describe a complex sale says a lot about how they operate both personally and professionally.

Kevin’s Hiring Questions

• Describe (what happened with) a deal from start to finish. How did you source it? Qualify it? Cultivate it in a competitive environment? How did you put a bow on it and close it?
• What deal did you lose that you thought you won?’What happened? What did you do wrong, what would you do differently?
• Find out if they are willing to “ask for the deal”

Teresa Spangler of Headway Sales Talent Solutions takes a similar approach, reminding startups to look for salespeople that have marketing and financial savvy as well as excellent prospecting skills.

Teresa’s Hiring Questions

• What would you do from day 1?
• How do you prospect, how do you manage your time?
• What are your success criteria, how do you measure yourself?
• What’s the most complex sale you’ve ever made, talk about how that sales came through from start to finish

“I don’t ask trick, Mensa-type questions”. —Kevin Dwyer

The problem with interviews, however, is that many startups make mistakes well before the first handshake.

STARTUP HIRING GAFFS

One of the mistakes startups make, says Teresa Spangler, is that the leadership drinks too much of its own Kool Aid—assuming that their immature brand and possibly immature product will simply set the market on fire.

This leads to unfair expectations and systemically poor support of salespeople – not to mention a tendency to hire individuals who promise much and deliver little.

“The young entrepreneur has to remember: the salesperson is not a magic maker”- Teresa Spangler

Kevin Dwyer concurs, noting that “in the absence of a really solid pre-sales partner – [software salespeople] are going to fail”. In Kevin’s opinion, even the best startup salespeople need support and the time to cultivate business—particularly with a still-evolving product:

“[if] You’re not giving them a bulletproof product that’s ready for prime time…they are ill-equipped to deliver a solution within the customer’s environment.”

BUYING A PAPER TIGER

Another startup hiring mistake, Kevin notes, is hiring experienced salespeople who are good ‘on paper’—long in experience with big brands, big accounts and big quotas—but unaccustomed to operating without a robust support network and brand equity.

As proof of the dangers of hiring blue chip sales personnel, Teresa Spangler relates a story where she moved an inside sales team en masse from an established player to a growing company.

The team was so used to having a marketing machine that they were unable to even write their own email campaigns.

THE CHANGING LANDSCAPE OF SALES (why it’s good for startups)

Hiring the right salesperson is a tremendous challenge for growing companies.

Organizations large and small have to deal with smarter customers (some companies are now training employees on how to buy software) and sales cycles have increased 25% in the past year alone.

But all is not doom and gloom. Teresa Spangler sees the shift as an opportunity for agile startups to adapt quickly, pouncing on a market leader’s inability or reluctance to change their sales process.

“This is a great competitive advantage for an entrepreneurial company to come in and be thoughtful in how they hire salespeople. If they pinpoint their competitor’s selling errors they can move quickly and profitably”. – Teresa Spangler

Startups, she says, have the ability to be sales-focused at every customer touchpoint. Beginning with skilled sales people, startups can offer value and adaptability across the board.

The days of hiring a charismatic hunter with a mega-watt smile are over. Today’s software startups need salespeople with a cocktail of talents – and must recognize their own obligations and hubris to help them succeed.

“Customers are turning away from aggressive sales tactics and cold calls”.- Teresa Spangler

The risks are great: both buyers and the rules of engagement are changing, good sales talent is expensive and possibly the most important hire a company can make.

But great too are the rewards. Profit and growth await startups who hire smart and move fast.