By Frederic Kerrest
“Nothing happens until someone sells something.”—Arthur “Red” Motley
When you’re building a new business, sales is one of the hardest but most critical things to get right. A good salesperson will drive your top-line growth—but getting those early hires wrong can be disastrous. After you’ve found some investors, built your product, and hired a few employees, you have to be intentional about finding, hiring, compensating, and retaining your sales team.
This week on Zero to IPO, we talked to Therese Tucker, the founder and CEO of BlackLine, and Madison Maxey, the founder and CEO of Loomia, about how to attract and retain sales talent that will propel your business forward.
Your first sales hire will have different priorities and, therefore, should have different strengths than your 25th sales hire or the sales leader that will be with you when you go public. Unless you come from a sales background, you might not know what a successful person in that position looks like at each stage of your company’s life cycle.
Tucker experienced this dilemma firsthand. One of the early sales leaders she hired was an incredible coach, but he wasn’t a great fit in the long run. When an employee on his team was struggling, he’d work 1:1 with them and sit in on every sales call. But as BlackLine scaled, that approach became unsustainable. With a growing sales force, the team couldn’t be successful if its leader narrowly focused on helping one employee at a time.
Tucker said this experience taught her a valuable lesson: you need to know what you don’t know. Tucker’s background is in engineering—she wasn’t an expert in sales. Many startup founders find themselves in the same boat, which is why it’s critical to bring in outside help. At Okta, when we hired our first sales leaders, we tapped our network to help us find the right candidates and to do a final round screening before we made them an employment offer. Over a decade later, I try to pay it forward—I love to jump in and help up-and-coming entrepreneurs with final round interviews of potential sales leaders.
Just as your company will need different salespeople for each stage of business, you’ll need unique incentive programs too. For example, when Maxey founded Loomia, she struggled to convince experienced salespeople that it was worth their time to join her team. Loomia was an early-stage startup, and Maxey couldn’t offer them the best salary or the highest level of prestige.
Maxey was encountering a reality many executives and recruiters face—outstanding salespeople can work wherever they want. To overcome this challenge, you need to get creative. Both Okta and BlackLine offered prospective salespeople stock options to convince them that joining a small company will ultimately pay off and to give them a sense of ownership.
YOU NEED TO CREATE AN INCENTIVE SYSTEM THAT ALLOWS YOUR SALESPEOPLE TO PUSH THE ENVELOPE SO THAT BOTH THEY AND THE BUSINESS CAN GROW.”
It helps to change your metrics and incentives as you grow. When your company is building a product or service that’s unproven in the market, your salespeople will struggle to close deals. If early on you measure their performance by the revenue they bring in, they won’t succeed. You need to create an incentive system that allows your salespeople to push the envelope so that both they and the business can grow. Instead, offer incentives for the number of demos they schedule. With a demo, you’ll have the opportunity to connect with interested buyers and collect valuable feedback that may improve the product. Eventually, you can start measuring success by the number of proofs of concept, and as the business scales, you can track their number of closed deals and revenue secured.
Although each salesperson has different strengths, there’s one thing many have in common: a competitive nature. There’s a reason why ex-NCAA or professional athletes often make good salespeople—they’re competitive and they like to win. Startup leaders should lean into this personality trait.
I always advise entrepreneurs to hire your first salesfolks in groups of three to drive competition from the get-go. You should also create a sales club, which is a tactic sales leaders have used for decades to motivate their teams. Every year, the top-performing members of the club receive a prize, which could be a vacation, a bonus, a nice dinner or an expensive gift. Before you know it, every member of your sales team will be working as hard as they can to be recognized. At BlackLine, Tucker even has “a club within a club,” reserved for the highest performing members of the sales team.
Publicly recognizing your top-performing salespeople will also go a long way—doing so could be as simple as putting their names on a whiteboard, or as elaborate as holding a ceremony in their honor. However you do it, the team’s competitive nature will motivate them all to succeed and make it to the top.
Hiring three salespeople at a time also helps you learn more about the best sales strategy for your startup. Each member of the cohort will have a different approach, so you can test how each style works, and ultimately how they impact both your culture and your top line. If one person isn’t doing well, it might be an individual issue—but if all three are struggling, you’ll see where your processes are falling short.
Your business can’t survive without a robust sales program, but identifying good salespeople can be a challenge—especially when you don’t have sales experience yourself. The key to hiring the right people is to adapt your approach as you go. Be open to looking for different types of salespeople and offering unique incentives as your business grows. And regardless of what stage your business is in, remember to always incorporate a competitive element into your sales program.
Frederic Kerrest is the executive vice chairman, chief operating officer, and cofounder of Okta. You can listen to Zero to IPO and the full “BlackLine and Loomia” episode wherever you get your podcasts.