How To Step Back From Sales As A Founder: Getting The Balance Right
If you’re the CEO of an early stage startup, you’re probably still closing many, if not the majority, of the company’s deals, as well as having to keep all the other plates of the company spinning.
As the business grows, the only way you’ll be able to create a healthy, scalable company is to step away from day-to-day selling to concentrate on making sure all the other functions of the business are in great shape.
But if you step back too early, and you haven’t built an effective sales operation, you run the very high risk of a significant drop in revenue.. But if you step back too late, you run the risk of not giving enough attention to the other functions within the business that need your attention…
This is one of the most dangerous phases of a startup, where shifting away from sales too early or too late could have a catastrophic impact on your business.
Tom Glason is chairman of the London Revenue Collective and CEO and Co-Founder of Scalewise. He discusses this critically important topic with our very own CEO, Paul Fifield! Their combined sales knowledge and business expertise on stepping back from founder-led sales is captured in our live broadcast ‘Making the Shift from Founder-led Sales — Tom Glason in conversation with Paul Fifield’, as they share their experience and strategies on how to get the balance right as a founder.
Transitioning away from sales is never easy, especially as the Founder of your startup. You’re so invested in the outcome that it can be difficult to tear your attention and focus away from generating and closing deals.
As the founder of any business, you never really stop selling. You’re always going to be selling to investors, new employees, partners, recruiters and many other people in a broad sense.
But in terms of selling to customers, and putting your Account Executive hat on, you can only keep selling for a certain period of time if you want to scale effectively. The real question is, how long is that period? The two most common mistakes that CEOs make are: 1) they don’t stop selling when they should and; 2) they stop selling when they shouldn’t!
Here’s some critical things to bear in mind as you plan out how and when to make this transition:
Hiring your sales team
So when should you start hiring your sales team? It’s still critical that you don’t leave founder sales too early. A rough estimate of when to start bringing in new sales people is when you hit about 200k in revenue.
It’s important to remember that you’re busy, and selling isn’t easy. Generating top of funnel activity to create new leads is very time consuming, but is critical to the success of your pipeline. So the very first hire should be a Sales Development Representative to help build that top of funnel while you continue to close deals.
This is a very cost effective way of starting, as SDRs are the least expensive sales hire you can make. At the beginning, they can prospect to other potential customers as you, and send messages as you on LinkedIn to help build your pipeline. It’s worth considering hiring an SDR with at least 6 months to a year of experience as this will dramatically reduce their ramp time.
Then, once you’re ready to hire more salespeople, you have a consistent pipeline ramped by the SDR, because you’ve fixed that top of funnel challenge.
Also, it’s important to do deals from a cold start as a proxy test for your product, your market fit and your messaging, and an SDR will be doing that for you. Founders rightly leverage their networks, but the warm leads can be misleading compared to what will happen when you have conversations with totally cold prospects.
Just bear in mind that although SDRs will be the least expensive in terms of salary, you’ll need to spend a decent amount of time helping them to understand how to pitch the business, running roleplays, shadowing you on calls and meetings as well as coaching them to be able to talk about your solution with the same credibility that you’ve developed as you’ve built your business.
Develop a hiring road map
Developing hiring roadmaps are key. You need to create the roadmap for others to succeed as you move onto other things. But you shouldn’t just leave them completely. They should be joining you on calls, and then they take on some of the admin. Maybe they do some of the follow ups, or they build out templates.
Once you’ve got some traction behind the SDR, your next key hires will be a Marketing Manager and a Content Writer. That second hire, Content Writer, is often one made two late in many early stage teams. When to make this hire will vary depending on your stage and traction in the market, but a rough guide is halfway between your seed and Series A.
If you can afford it, hire two sales reps. It’s easier when onboarding. Plus you can create healthy competition between the two, and you’ll be able to see what good looks like. It helps you track performance.
Creating sales targets for early stages reps is tricky. An all-employee options plan really helps. Or you might want to guarantee half their OTE. You can compensate on behaviours such as activity metrics, rather than deals.
At this early stage, you’re looking to get those winning clients to use as case studies, so you might not want to compensate your new sales teams on revenue.
Here at SIA, we make sure that we include a test as part of the hiring process. It’s important to have some kind of test that sees whether the person has the fundamental ability to do the job.
For SDRs you can ask them to write a short article (say 300 words) on a piece of technology that excites them. You can also ask them to create a short video, no more than 2 minutes, in which they teach you something, on any topic they like. These are both great tests of the key skills they will need in their jobs.
We also have a peer interview in the process, as well as a test for a cultural fit — they’re going to be pivotal to the subsequent hires that you make. Ultimately, your sales team need to also be aligned to your values.
Create a support structure
A lot of founders get into a mess because they don’t have operational support in their team super early. Ops help with functions — they’ll help with your data, your funnel, and lots of other areas. If you bring this person in late, they might spend about a year tidying up systems and processes. Revenue Operations can also help support a big team.
Here at SIA, we have a consultant, who helps us build the infrastructure. One bonus is that when you get to a million pounds turnover, you’re in a great position for Series A funding, especially if you’ve hired a rev ops.
Often, a founder is looking to hire a senior sales leader, but they have a really small team, and they go far too big, far too soon.
The big challenge is if you shortcut too soon, it just doesn’t work. What can happen is that your sales leader can’t get traction, and then you’ve wasted a year and potentially 100k in direct costs and probably a lot more in opportunity cost.
All of the sales you’ve lost during that time were also huge opportunities to learn. So there are losses all around. This can be disastrous to a company, so it’s really critical to keep this in mind if you want to stay afloat.
Even when you’ve stepped away from sales, you can’t leave your team in the dark. 30–40% of your time should still be dedicated to supporting your team.
How do you make sure your hires are successful?
- A sales playbook is a fundamental asset. Do as much before you get your sales team on board.
- Have total clarity on your Ideal Customer Profile (ICP) and Ideal Personal Profile (IPP). Who are the people within those ICP companies that you are targeting? Make sure you know the four or five people who are involved in the buying process, and flesh out those prospects.
- What is the qualification criteria for your prospects? Structure your discovery documents so you can elicit the pain points from your prospects.
- Start creating templates for the emails you or anyone else in the team has used which have worked well. Think of anecdotes and stories around you solving their pain point. Help your reps refer to these stories, even in the third person.
- Have a really good deck for any occasion. Not just a ‘show up and throw up’. Talk about your vision in there, with some deep dives into your core narrative.
Tom Glason, alongside our Founding Coach, Ben Wright, leads an exciting course called ‘Managing the Complete Sales Cycle‘ — If you want to understand the key concepts of top performing sales professionals, this course will equip you with the tools you need to build maximum momentum in your deals and exceed your targets.
Members can enroll onto the next cohort here.