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5 Mistakes Founders Make When Hiring Their First Salesperson

Posted by Dharmesh Shah on February 25, 2015 7 Comments

Your MVP is complete. Some seed funding is in the bank, or maybe even a Series A. You’re anxious to see if your product flies off the shelf. It’s time to make that first sales hire.

This is a big step. The right call can establish the rocket-ship revenue chart every founder dreams of. The wrong call can be bring down the company.

At HubSpot, I hired over 200 salespeople. I made a lot of mistakes. I figured a few things out. Over the years, I have leveraged this experience to help dozens of startups with this critical first sales hire decision.

Here are five mistakes I see many founders make when hiring their first salesperson.sales-acceleration-book

Mistake #1: Hiring a senior leader

“Yes! We just recruited the director of sales at the public company we are looking to disrupt.”

No! Trouble awaits.

Often startups get greedy and go after the big name leader in their space. Here is the issue - this leader has not sold on the front-line in years. The first question she will ask when joining the company is “where is my assistant?”. You need someone who is closer to the front line and is willing to roll up their sleeves and get their hands dirty.

 

Mistake #2: Placing too much weight on industry experience

Me: “What is the top criteria you are looking for in your first sales hire?”

Startup Founder: “Experience in our industry”

I receive the above answer 99% of the time. It does not sit well with me. The answer sounds logical. Domain experience is certainly straight forward to assess. However, all too often, startups put too much emphasis on candidates’ industry experience and miss real weaknesses in their abilities.

Don’t get me wrong. We hired plenty of sales people at HubSpot from our industry. However, believe it or not, it was a minority case. Most folks came from outside of the marketing software space and even outside of software and tech altogether. I would rather have the below average performers stay with our competitors. Go find the rock star from a dying industry and bring them into your space.

Mistake #3: Placing too little weight on go-to-market strategy experience

When your first sales hire joins the company, the go-to-market strategy is typically not developed. Who should they call? Big companies? Small companies? Should they focus on closing the C-level decision maker or getting the end user into a free trial? Will they sell direct or through a partner channel? Will deals require an in-person visit or can they be completed over the phone? Will they work with inbound inquiries or outbound cold calls?

Most sales people and sales leaders will simply try to replicate the go-to-market strategy from their previous employer. It worked then. It should work again, right?

Not necessarily.

As a founder, consider your buyer, your product, and your company strategy when determining your company’s ideal go-to-market approach. Be sure your first sales hire has experience with that approach or is at least willing to adapt and learn.

Mistake #4: Overlooking sales process development experience

“Yes! We just hired the top sales person from our Fortune 500 competitor. This salesperson was ranked #1 out of 1800 sales people. She is going to crush it here.”

I agree. This salesperson is talented. However, these will be her first questions when she arrives at your company:

§ “Where is the pitch deck?”

§ “What is the sales process I should follow?”

§ “Where is the list of top 10 objections and how I should handle them?”

You’ll be scratching your head, “I thought that is why we hired you”.

When this top salesperson started at your Fortune 500 competitor, she attended a month of training, walking through the blueprint of success. She is great at following the blueprint. In fact, she is the best.

However, can she build the blueprint? Probably not. You need someone that can work in a far less structured environment and at least lay out the foundations of the company’s first sales process.

Mistake #5: Hiring a “product pitcher” rather than a “consultative seller”

Believe it or not, the most valuable result from your first thousand sales calls will not be the early customers or revenue these calls produce. Instead, it will be the plethora of feedback from the market, allowing your team to continue to understand your buyer persona, iterate on your product, and perfect your market message.

Unfortunately, many salespeople will approach these early calls as an opportunity to dump as much information about the product and its beautiful features on the prospect, an approach we call “show up and throw up” in the industry. Chances are, your features and message are not quite right. The salesperson will fail to engage the prospect and throw up his hands, “it’s not working”.

The key question is “why?”.

Alternatively, a consultative seller will leverage the first sales calls to learn about the prospective buyer. They will learn about their goals, learn about the strategy they have to pursue these goals, and learn about the challenges they are facing in these pursuits. A consultative seller will be able to come back to the team with the same “it’s not working” result but they will understand why. As a result, the organization can continue to refine its approach and tighten the product/market fit even further.

I hope these five mistakes help you hone your skills as you embark on the exciting phase of scaling sales. The next logical question is where can I find candidates that avoid these mistakes. Here are a few ideas.

1. A recently promoted sales manager at a reasonably sized business. They are not too far from the front-line but also have some experience in sales process development.

2. A failed entrepreneur with formal sales training in their past. They usually score high in the consultative selling arena and experience with unstructured environments.

3. A top-performing salesperson that was around in the early days of their previous company’s growth. They may not have built the process. However, they certainly watched someone do it and had a hand in it.

Any other ideas?

This is a guest post by Mark Roberge. If you liked this article, check out Mark Roberge’s new book that launched this week, “The Sales Acceleration Formula”, about his experience in building the HubSpot sales team.

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Overcoming The Odds: 10 Tips For Getting Into A Top Accelerator

Posted by Dharmesh Shah on January 5, 2015 10 Comments

Just as the CEO is the investor’s interface to a business, the application process and form is your interface into top accelerators like Techstars and Y Combinator. The best programs are super-selective--less than 1% of applicants get in, making them pickier than Harvard, Stanford and MIT. So as our New Year’s present to you, here is the scoop on how to improve your odds of getting in.

We can’t speak directly for any programs other than TechStars Boston, which the two of us have known and been involved in for years, but these hints should improve your chances significantly just about anywhere.opportunity-calling-iphone

For now, we’ll focus on advice straight from Techstars management (they’re like the admissions team – it’s their job to pick the best people from the pool of applicants). Oh, and in case you’re too busy working on your startup to read through the rest of this before submitting your TechStars application, you can apply here.

1. Team, team, team.

Above all else, it’s the TEAM that is the variable that determines success for early stage companies, and evaluation of the team is the #1 factor for acceptance into TechStars. Spend time proving how well you work together. It’s not just intelligence and drive, but chemistry as well. Business ideas are a dime a dozen, but great teams are the key to startups. Why should we expect you to be able to woo customers if you can’t attract great teammates?

Some pro tips when it comes to team chemistry: The easiest way demonstrate that you like each other is to actually like each other. It always starts with people you respect and enjoy spending time with. If one of these things is not true, you have a problem and it will show up to the trained eye. For example, if you have a co-founder that is brilliant, but you really don’t like her – that will show up. On the other hand, you might have one of your best friends from high-school as your co-founder, but perhaps he’s not that sharp or capable. What happens in these situations is that you’ll try to talk over him, interject and correct him or flat out ignore him in the meeting. All bad signs.

In short: Team counts. Find people you both like and respect. Don’t compromise on either of these.

2. Amaze us.

In spite of our best efforts, our eyes can start glazing over after a few hundred applications for each TechStars class, so make yourself stand out! Whether you were the captain of your college hockey team, memorized pi to 100 digits, or you’ve garnered a million users during your beta launch, we want to see evidence of how you’re special. Tell us how you’ve creatively overcome problems in real-life for fun, profit, or pure goodness in the past and what things you have loved doing. Show us why we will be idiots if we don’t make you an offer on the spot. Make us remember your application!

3. Apply early.

Applications for the next Techstars class in Boston, Boulder, London and Berlin are accepted here [LINK FORTHCOMING], with the Boston application open from January 5th through March 15th for the session starting in June. Applying early allows us to look at your application with depth and focus, whereas leaving your submission to the last few days makes it harder for us to give it the same attention. Even if you think you’ll have, say, much better numbers or demo videos if you wait 8 weeks, we still encourage you to apply early; you can always share updates and developments with us at any time. Think of your application as the start of a conversation.

4. References and recommendations matter. A lot.

Recommendations spark our interest and instantly catapult you forward. A strong reference from a member of the TechStars network, perhaps a mentor or a founder from a previous TechStars class, will definitely help you get recognized. Hustling to get an awesome recommendation is a great indicator of the drive and resourcefulness we want in our class.

5. Don’t be just one more wannabe on the same tired meme.

Trust us, we see more social/local/mobile/group purchasing/photo apps than we thought possible. While we know that it’s execution and not the idea that counts, we want to know that you’ve thought hard about how to get an edge on the competition. What’s your unique superpower or approach that differentiates yourselves from the dozens of other startups trying to fill the same need?

6. Do your homework.

Know what kind of companies we’ve accepted before and what problems we love to help solve. Show us not only why you’re a great fit, but how you approach the problem from a new and innovative standpoint. Letting us know how and where TechStars can help you is a plus as well. Information like telling us which mentors you want to work with, or explaining why the TechStars network can accelerate your company, is extremely valuable to us when choosing a new TechStars class. Want to know who we listen to? Start here. [Link to mentors]

7. Show us traction.

Although we accept applicants at various stages of development, we want to see that you’ve got momentum working for you. Whether you’re a team of three with a product in beta, or a company of 12 with $1 million in annual revenue and seed funding already in place, convince us why your idea is awesome and how it’s capable of scaling. Based on the stage of your company, this may involve including Google Analytics in your application, demo videos, or simply explaining why your four beta users are truly invested in improving your product. The more traction you show, the more we are impressed.

8. The video is important.

We take the video on the application seriously as a way to cut down our pool of applicants down to the 100 or so that make it to the semi-final meetings. Although production quality isn’t a focus (iPhone videos are fine), helping us get to know you and your product in a more personal way is important to get your message across. Your video will shed light on your ability to pitch your company not only to the people reading your application, but also to future mentors, VC’s, and users. Tell us your story; inspire us!

9. A bit of branding effort helps.

Work on creating some brand around you and your startup.  Once the team starts to dig into your application, we will do exactly what you would do if you were in our shoes.  Check out the website, check out your online profiles.  Check to see if anyone is already talking about your startup or product.  You don't need glowing reviews from the New York Times this early in the game, but any signals that you can send that this is going to be a successful company and the train is already leaving the station will help you.  If you're not great at design, find a friend to help you.  Better yet, recruit a design-oriented co-founder.

10. Sweat the details...but turn in the application.

Make sure your application is in tip-top shape. Avoid typos, inconsistencies, and obscurity at all costs. The quality of your application is our first indication of how you work, so make sure to present yourself in the best possible light. But as in sports, you don’t make the shots that you don’t take. Get it done and turn it in!

Here’s the link to the application again: TechStars application

Pro tip: Have someone else proof-read and edit your application. This can do wonders (especially if they’re good). It’s amazing how many things we miss when we’ve read and re-read the same document a dozen times.

Want to know more? (Remember #5 above.) Ty covers applications with HubSpots’s Dave Gerhardt in the latest TechInBoston podcast. Good luck!

After a long career as a serial entrepreneur and angel investor, Ty Danco is now a Director at TechStars Boston. His personal opinions can be found on his blog tydanco.com or @tydanco.

Dharmesh Shah is the co-founder and CTO of HubSpot, an active early stage investor, and blogs at OnStartups. You can follow him @dharmesh.

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