So, you’ve recently raised your Series A, you’ve celebrated (I hope), but are acutely aware of a new clock ticking…
You’ve made commitments to your investors and have new targets and milestones to reach.
And, depending on your go-to-market strategy, you’ll likely be hiring dedicated, full-time salespeople or a team of them to achieve these lofty goals.
Most startups experience challenges at this stage, since allocating the resources to the appropriate activities can be really difficult.
As you know, there are copious blog posts, guides, ebooks, videos, etc. about fundraising for startups.
However, we couldn’t find many articles that helped explain what you need to do next from a sales perspective.
So we decided to speak with our favorite startup sales veterans to ask for their guidance and advice on the following:
- How should startups approach sales after raising their Series A round?
- What sales mistakes do startups make after raising a Series A round?
- What advice would you give to a startup looking to scale their sales team?
Meet the experts…
We caught up with Scott, Adam, and Jack to ‘pick their brains’ on startup sales. They each possess extensive sales experience and are specialized in helping startups set up sales processes, close more sales and scale growth.
Scott Sambucci has more than 20 years of experience in building and selling technology products and leading three Silicon Valley startups to their first millions in revenue. He is a founder and CEO of SalesQualia, a company that works with and helps startups all over the world. He helps them find customers, grow revenue, and build sales processes. Scott recently published a book called Stop Hustling, Start Scaling and you can download it for free on the SalesQualia website.
Adam Springer has over 15 years of experience in sales. Over the years Adam accumulated enough knowledge and experience to be able to share it and help startups develop sustainable strategies and build their competitive advantages.
Adam Springer has over 15 years of experience in sales. Being the first salesperson for three startups, he brought them from zero to over a million in revenue in under a year then scaled the sales out to over $5 million annually. He is now the founder of StartupSales.io, working with early-stage startups to create sales processes that get you over $5 million ARR. You can listen to the StartupSales podcast here.
Jack Thompson is a Business Development Consultant with 15 years of experience in consulting. He works with C-level executives and businesses of all shapes and sizes from startups to multinationals. His current focus is marketing agencies and tech companies who are struggling to implement the right business development strategy.
Scott, Adam, and Jack were kind enough to offer their time recently. Below you’ll find a transcribed version of their answers as well as a video of their responses.
How should startups approach sales after raising their Series A round?
As Scott mentions, Series A capital is designed to accelerate the existing systems of lead gen pipeline and prospecting. Your investors are most likely expecting you to ramp up your revenue.
And if you have a sales-led GTM strategy, this typically means hiring your first (or second) salesperson.
Here are some best practices when approaching sales at this stage.
Understand your numbers
Before you do anything, you must know your numbers. Both Adam and Jack suggest that you look at your existing numbers as this will inform which direction you need to go in and how big to grow the team.
At a very rudimentary level you need to know how many people you need to speak with in order to close a deal.
Taking this a step further, I suggest that you understand the numbers behind closing just one deal:
- How many qualified leads do you have in your pipeline?
- How many qualified leads converted into sales qualified leads?
- How many meetings booked vs meetings held?
- How many meetings held moved to contract sent / signup?
- How many contracts sent were closed as won (and closed lost)?
Once you have these numbers you can start to plan out the resources you need in place to hit those targets.
These numbers tie into your sales process, which needs to be effective and easy to follow.
Understand your sales process
You must also understand your sales process. Jack explains that this starts with Qualification.
You need to have clear criteria of what defines your ideal customer profile. This means understanding the:
- Number of employees
- Technologies they use
And then you need to understand the individuals (buyer personas) within those businesses so that you are confident you are talking to the right people, at the right level, who have the experience, authority, and budget.
Other considerations for your buyer personas include:
- Job titles
- Where they spend time online
Jack also argues that “getting leads can be the easy bit, especially with the right support”. However, closing them is harder.
It is important to note here, that Lead Generation is just one of three core business activities.
Whilst this is not directly attributed to Sales, you need to ensure that you are set up to fulfill and deliver on the value promised to customers.
If your delivery team is not set up to support new customers and onboard them correctly then it is not scalable and your business will not grow.
Essentially, you don’t want to be pouring water into a leaky bucket.
Jack mentions that customer churn is a huge demotivator for salespeople. And if this is an issue within your organization, then you’re likely going to find it hard to retain your salespeople.
Assuming you have a clearly identified target customer, you understand your buyer personas and have the delivery team in place to fulfill these new customers, you should also have developed and tested your sales process.
Adam highlights that you must have these processes in place so that when you do hire, the salespeople that join your organization know what to do, when to do it and how.
Adam continues to explain that most salespeople can sell, but they need to have the playbooks, processes and enablement content in place to ramp up and hit their numbers.
In order to understand what process you need to create, you also need to be familiar with the sales funnel.
Pipedrive defines this: a sales funnel is a visual representation of the journey from your prospect’s first contact with you until a completed purchase.
Once you have mapped out the stages in your sales funnel, you need to decide on how you intend to engage with prospects.
These are the typical strategies that most companies follow:
- Selfservice / freemium / product-led
- Inbound Sales
- Outbound Sales
As Jack mentions, you need to understand what strategy you will deploy to generate revenue as this influences the KPI’s you set for the team, the process they need to follow and the collateral that is needed to support these sales activities.
If you don’t have the above in place, it will take you a while to ramp up a new salesperson and hit the targets that your investors expect.
Stay involved in the sales process
A common mistake that founders make is that they simply offload all sales to the new hire.
Scott suggests that founders must continue to stay involved in the sales process and do most of the selling at the beginning. The key is to avoid knowledge gaps and process gaps so the team can understand the nuance of the product and the market.
Founders need to think of building a sales team as a transitory process. As the founder, especially if you’ve been closing deals, there is so much knowledge that you possess about the product, the delivery, the market.
Over time, you’ve built up a repository of questions and rebuttals that are second nature to you now. But you need to remember that these are all new to your new sales hires.
Consider your team structure
Jack outlines that different types of sales models require different personalities. And depending on your model you may need more than one person.
Building a scalable sales function in a high growth post series A company may require you to hire:
- An outbound salesperson – whose role is to chase leads, make dials, hunt new deals and be responsible for generating their own qualified leads
- An inbound salesperson – whose role is to take inbound calls generated by Marketing/PR efforts, respond to emails, handle meetings and qualify deals in the pipeline
- A closer – whose role is to close highly qualified opportunities. The volume of deals are likely to be lower, but their role is to bring them across the line.
The above roles require different personalities and each has different motivations and objectives, which you need to be mindful of when recruiting.
What sales mistakes do startups make after raising a Series A round?
The road to building a scalable and repeatable sales process can be a bumpy one.
Most startups make one fatal mistake at this stage – they hire too quickly and often hire the wrong people.
As this is new territory for many founders, often unrealistic KPI’s and targets are set for the team. This not only puts unnecessary pressure on the team as a whole, it can also lead to unmotivated salespeople.
Hiring too quickly
Scott explains that hiring too quickly can have a detrimental impact on your sales success.
You’ve spent time raising capital and now you finally have the money, it’s time to build the team, but don’t fall into the trap of hiring the first person you know in your network.
Avoid the confirmation bias with a sales hiring process in place. As a busy founder, there are hundreds of other items on your to-do list but don’t rush to get back to them by hiring the first salesperson you interview.
It is hard to be patient, but the bigger mistake is hiring the wrong person.
If you take three months longer to hire the right person, that’s better than hiring the wrong person which could cost you millions of dollars in revenue and 12 months of lost time…
Adam also agrees that hiring too fast or too many people at once is a common mistake for startups.
Hiring 4 or 5 salespeople may not be the answer, especially if you don’t have the numbers (inbound lead flow, outbound processes booking meetings, etc) to support this or the processes in place to scale.
Adam also suggests that if you do have aggressive plans to expand your sales team you should first hire 2 salespeople, get them onboarded and then hire 2 more. If you’re planning to scale your team by 30 people, then you may want to consider hiring 5 people at a time – the point here is that you shouldn’t stretch yourself too thin.
Note: These numbers are of course dependent on your situation and are just used as an example.
You need to track the process along the way to make sure you are moving in the right direction. Rather than burning through your runway by hiring too many people and then having to lay off people further down the line.
Know your KPI’s and set realistic targets.
Jack explains that you need to truly understand the growth you are attempting to achieve. For example, if you want to grow by 30% this year, then how does that translate back to the KPI’s?
Do you know how many customers you need to close in order to reach these targets? How many opportunities do you need in the pipeline to close the new customer target? And how many leads at the top of the funnel do you require to convert into qualified opportunities?
This leads to Jack’s second point of not setting unrealistic KPIs or unachievable targets as this will lead to a demotivated team and mismanaged expectations and perception of your investors.
It is important to have stretch goals, but they need to be realistic. Ensure that the targets are challenging, but not overwhelming.
What advice would you give to a startup looking to scale their sales team?
When it comes to scaling a sales team there are many factors that founders need to consider, especially if this is your first time.
When onboarding new salespeople let them take some time to adjust and encourage them to connect with the wider team. Constant communication through daily standups for the first couple of weeks is an effective strategy to make sure you fill in as many knowledge gaps as possible.
Be mindful of the types of people you are hiring. Set up company culture and your core values and hire people that fit in with your company culture.
Lack of a clear and defined onboarding process
Scott explains that you can’t approach onboarding as an osmosis process. The onboarding process has to cover the information gaps from the founder to the new sales hire. You must keep these gaps small and fill them quickly.
You should also make sure that you hold daily standups with the new salespeople.
These can cover the following questions:
- What did you do yesterday?
- What are you working on today?
- Where are you stuck?
- Where can I help you with?
These daily standups help overcome the assumptions about the product, value proposition and your pitch, which can become magnified further down the line if you don’t make sure you calibrate on this quickly.
Also, involve the wider team throughout the onboarding process.
Make sure the salesperson is spending time with a product, engineering, and customer success.
Remember, you have been living and breathing your product for several years, so everything makes sense to you. But to a new person, it doesn’t.
By involving the wider team at the beginning it can help to:
- Build better relationships internally
- Accelerate the person’s learning and acceptance into the culture of the company
Hire multiple reps at the same time
Adam explains that good onboarding takes time and depending on your sales process this could take 2 to 3 months (or even longer for complex products).
He suggests that you do not want to onboard people one at a time.
As a founder or member of the team training this person it can take several hours a day to train. So it is a good idea to group new hires together during the onboarding process.
Another consideration in your recruitment process is to hire someone who has been at this stage before and has built these processes previously. An alternative is to seek external help from consultants or even sales accelerators.
Be aware of the team structure and company culture
As Jack explained previously, different sales roles require different personalities. Therefore you need to consider the likely impact of investing in a sales team has on the rest of the team.
For example, if you are hiring a number of SDR’s whose role is to make 50 to 60 outbound calls a day, where are they going to sit in your office?
If you currently have an open plan office with a mixture of engineers, marketing and customer success teams, how are they going to react to the noisy (but energetic) sales team?
The considerations are often overlooked but can have a detrimental effect on the company culture.
Is your business really ready to scale?
Jack also shares a very important consideration for the rest of your company. It isn’t just the sales team that needs to scale, the rest of the company needs to also.
He explains that there is nothing more demotivating for a sales team than bringing in loads of amazing work and being told it can’t be delivered.
You need to ask yourself:
- Do we have our customer fulfillment processes in place? Can we actually deliver on the value sold?
- Can our technology scale with a 30% increase in users?
- Do we have the correct operational plans in place? Can we forecast our hiring needs?
- Is the office big enough?
- Do we have the right communication processes and tools in place?
You need to answer the questions above and ensure that you have the correct processes in place for when you are scaling your sales team.
- Understand your numbers
- Understand your sales process
- Stay involved in the sales process
- Stay involved in the sales process
- Consider your team structure
- Don’t hire too quickly
- Know your KPIs and set realistic targets
- Create a clear and defined onboarding process
- Hire in bulk
- Be aware of your team structure and company culture
- Only scale your sales team if your whole business is ready to grow
Once you have built your sales process and have a clear understanding of your numbers and the have right Sales team members in place, you’ll be in a strong position to scale your revenue.
When you need a consistent stream of high quality and targeted leads speak to the TaskDrive team. We can help you build a list of net new prospects and enrich any existing data so your sales team can spend time on building relationships, booking meetings and closing deals.