Startups: hiring, careers, sales people

Giff Constable management, startups

prizebullThis week saw two interesting and related posts on startups and hiring/careers.  Mark Suster wrote about who you should hire into your startup, and Chris Dixon wrote about the ideal startup career path.

Mark’s message is to hire hungry, smart people who want to get to the next level in their career, not the ones who have already arrived. Chris writes, “if your goal is to start a company, it is mostly a waste of time to work anywhere but a startup – with the possible exception of a short stint in venture capital.

These two statements are related. Working for a big company can give your resume “brand power” making you more hireable, and in some cases more fundable, but it will not teach you about startups.*  Even venture capital won’t teach you what it means to be in the trenches.

Their posts got me thinking specifically around startup sales.

Hiring Sales People
If you are a business person (rather than a coder) and want to start a company, I highly recommend getting direct sales experience (I’ve done marketing, bizdev and sales, and usually wear all three hats, but the latter was most transformative for me as an entrepreneur).  Doing this for a big company can be very useful for your career, but doing so for a startup will be more applicable to your entrepreneurial goals (especially if it’s young enough where you can wear a few different hats).

In general, sales people from big companies are used to a different market environment and set of resources behind them.  They are used to coming from an important brand name, not cold calling as a “nobody”.  They are typically used to selling products that have already been fleshed out, have achieved market success, have lots of marketing backup and customer references.  Their sales process itself might be very complex, but the sales person gets to focus mostly on the relationships because the product itself, and everything around it, has already been figured out.

movingtargetA startup, especially one creating a new market, has none of that.  The product is a moving target, pricing and business model are being defined as you go, the market isn’t always aware it needs your innovation, marketing materials barely exist, customer case studies are only a handful, etc.  In other words, you have a completely un-commoditized product and a sales cycle that is complex on multiple levels.  If you drop a sales person successful with “figured out” products into this new, unstable environment, you risk them quickly becoming incredibly frustrated, consuming vast amount of company resources as “support”, promising the wrong things to prospects, and pointing a lot of fingers.

I agree with Steve Blank that you don’t want to hire much of a classic salesforce before you have product/market fit (instead try to find product marketing or product management people who are scrappy, personable, and aren’t afraid to sell, cold call, etc). Even when you are starting to get confident about product/market fit, be careful with hiring:

  • Don’t hire someone who is used to a relatively simple product/ process for a highly technical sale or a complex, multi-step enterprise sale, even if they are really personable.
  • Don’t sacrifice hunger for a rolodex. You want someone hungry, determined, ambitious and willing to hit the streets for you.  A rolodex is very useful, but not enough.
  • As a startup, you never have as much time to mentor people as you wish, so also be careful with someone completely green.  They can work out beautifully, but only if 1. they love your product, 2. they are smart and willing to listen / apply lessons, 3. they are ready to work really frikkin’ hard.  They don’t yet need to have learned to be a “closer” — as CEO in the early stages, you will be the best at that as long as something is fully teed up. I’d rather have someone green who fits this bill than someone experienced but lazy.
  • Don’t overpay for a sexy candidate — by which I mean compensation should be heavily commission based, and if you agree to a high guaranteed commission level for the first 6 or 12 months, give yourself an out in your employment agreement so you can more easily fire them if they end up sitting on their ass collecting that money (which I, sadly, watched happen at an enterprise software company early in my career).
  • Take quick action if someone proves ineffective in your environment — both the company and the sales person will be better off parting ways and finding fit elsewhere.

Of course, if you find someone completely awesome that belies standard guidelines, be willing to follow your gut.  Guidelines are by nature generalized, but people are individuals.

Additional Points of Interest on Hiring & Careers
Mark Suster also repeats the saying “A players hire A players, B players hire C players, C players hire D players.”  It’s an expression I heard at my first job 15 years ago at Trilogy, and something I still believe is absolutely true.  I’ve learned to listen to my gut when it comes to hires.  Every time I have been uncertain about a hire and went ahead anyway to meet growth needs, I have come to regret it.

*Greg Battle, an interesting guy I met in college and who I recently rediscovered on the net, also had this to say about careers:

I’ve been fortunate enough to work in a startup capacity at many big companies, so it’s not necessarily a choice of one or the other. Big companies launch new products, divisions, and lines of business too. Saying you “love startups” isn’t enough either, as there are so many steps in the startup business cycle, from founding, alpha, beta, pre-funding, growth phase, pre-IPO, etc.. When thinking career, you have to consider the nuanced nature of each position, independent of the catch-all bucket you may place it in.

I think Greg is right to remind everyone not to oversimplify. Every startup I’ve been part of (going on 6 now) has been different, with many different lessons.

Previous thoughts on startup sales: Don’t Be Afraid to Lose