From “Founding Sales: Sales for founders (and others) in first-time sales roles” by Pete Kazanjy founder of Atrium Sales Analytics. Follow Pete on Twitter and LinkedIn.
Consider checking out How to Use This Book and Who This Book Is For sections to start.
What inspired this book?
In Spring of 2010, our startup, Unvarnished, launched to a massive cataclysm of press coverage, venture capital interest, and general gnashing of teeth.
As the world’s first serious attempt at a community contributed reputation system for professionals, or a “Yelp for professionals”, we were featured on the Today Show, covered by many national newspapers, and enjoyed traffic spikes that would be the envy of any newly launched startup.
By January of 2011, had we concluded that our concept was a failure, and we needed to try something new.
At the behest of our board members, Josh Kopelman and Phin Barnes of First Round Capital and Saar Gur of CRV, we started looking at other potential ways to solve the same problem (that is, hiring well is hard, and there is likely a data centric way to help with that).
And while our first concept was a failure, the next one wasn’t.
In April 2011 we started building TalentBin, the earliest versions of which was an employee network-based referral recruiting product to help recruiters better pro-actively mine the networks of their staff to assist in recruiting their hardest-to-fill openings.
Rather than sit in a cave, pretending we were building the next great thing before revealing it to the world, we were dead set on getting outside, and getting this in the hands of our intended customers as early as possible.
And that meant selling.
Unfortunately, we didn’t have any sales professionals on the team. Or anyone with any sales experience, really. We had my cofounder, Jason, who started his career as a software engineer, before progressing to, variously, interaction design, then product management, then product management leadership, with a sprinkling of professional poker playing in between. And we had three engineers, who, while very smart and hardworking, weren’t about to bang the phones all day every day.
It quickly became apparent that the sales piece would fall to me, and not because of my overwhelming qualification for the role—my background was as a product marketing and marketing generalist, with some product management for kicks. Rather, everyone else had things that only they could do, so I had better get my ass in gear.
What followed in the ensuing three years was a massive exercise in painful growth and learning as TalentBin went from hypothesis, to early minimum viable product, to strong product-market fit and sales scaling, to acquisition by Monster Worldwide in early 2014.
And for me, this meant a transition from a “generalist business founder”, to TalentBin’s first evangelical sales rep, trying to get someone, anyone, to use our product, for free, through summer and fall of 2011, to our first smiling and dialing account executive, asking for the sale with real money and a straight face, starting in fall 2011, to the first beginnings of sales management as I brought on our first Market Development Rep to fill my calendar in January 2012, and then haltingly adding account executives and market development reps through 2012, all the way through robust, repeatable, scalable B2B SAAS sales, with account management and customer success apparatuses, in 2013 into 2014. When it was all said and done, we had a team of ~20 sales and customer success staff, and were cranking along at a $6m/year run rate.
It was not without its misfires, train wrecks, and victories, individual and team. Most importantly, there were countless learnings at each step of the process.
The goal of this book is to share those with those who are beginning, midway, or even at the end of a similar journey.
Who is this book for?
Importantly, like any good sales conversation, first, we’re going to qualify this opportunity. This book is specifically targeted for founders who find themselves at the point where they need to transition into a selling role. And not the “founders are always selling” chestnut you constantly hear, but actually turning their attention to revenue generating activities.
And not just any revenue generating activities, like monetizing your software with ads, or freemium $9.99 a month recurring revenues. Those are all fine on their own, but not our focus here. Rather, this book is specifically for founders who are leading organizations that have a B2B, direct sales model that involves sales professionals engaging in verbal, commercial conversations with buyers.
Moreover, many examples in this book will be targeted specifically to the realm of B2B SAAS software, and specifically as regards new, potentially innovative or disruptive offerings that are being brought to market for the first time.
In short, direct sales of the sort a B2B SAAS software startup would engage in.
With that said, if you are looking to be a first time salesperson, transitioning in from another type of role, or fresh out of school, in an organization that meets those characteristics above, you will get value out of this book.
Similarly, if you are a first time sales manager, either of the founder type, or a sales individual contributor who is transitioning into that role, again, in an organization who meets the criteria above, you will also get value from this book.
Why do I think I am uniquely qualified to tell this story?
Then there’s the open question of why I am even qualified to be dispensing this sort of advice.
Aside from the above existence proof of success—albeit not hundreds of millions of dollars in revenue—I believe that a book written for non-sales guys (and gals!) becoming sales guys requires the point of view of that very same non-sales guy who became a sales guy, then sales leader.
While I did not learn at the knee of more senior sales professionals, inside an existing organizational framework, say by starting as a Business Development Rep at Salesforce, before moving into a Jr. Account Executive role, and progressing from there, I believe that this was actually a benefit, in that it compelled the derivation of many best practices, which both aids with strong internalization (when you derive the answer, it sticks with you much more robustly), and opens up opportunities for innovation as everything is “on the table” for questioning.
While this approach was time costly, and opportunity costly, in that I made many mistakes that likely would have been avoided by just cloning an existing reference architecture from a Salesforce or SuccessFactors or Box.net or Oracle, I also was able to approach the craft of selling, and later, the scaling, operationalization, and management thereof, with the sort of fresh, child’s eyes that, coupled with a product management and engineering mindset, beget new innovation, and adoption of the state of the art.
Which, as I have since become both a sales leader at a larger, legacy sales organization, and have become “the sales guru” that many startups and venture investors in my network come to for help, I think we ended up winning the tradeoff, in that we were able to innovate and adopt new, better approaches, cherry pick the best stuff from established sales orgs, and avoid any of the baggage that often accompanies calcified processes from sales organizations who, say, grew to scale in the 80s, 90s, or 00s.
Who helped?
Lastly, by no means was this a solitary enterprise. On our sales team we celebrate what we liked to say was an “engineering mindset”, and that we were “the product managers of our sales apparatus.”
So chief among those who helped accelerate these learnings and overcome our errors were my sales staff, particularly Brad Snider, our first account executive, Rob Perez, our second account executive, whom we poached as an overlooked Sales Development Rep at LinkedIn, and Manny Ortega, who began as a particularly operations-minded Market Development Rep before transitioning more fully into a sales operations role before our acquisition. And on the customer success and enablement side, we went through a similar set of learnings spearheaded by our head of customer success, Adam Abeles.
The First Round Capital CEO community was also invaluable, in that I was able to glean learnings from Q&A from the likes of Angus Davis, CEO of Swipely, and sales automation typhoon, Sean Black, former head of sales for Trulia, and later CEO of Crunched, amongst others.
And then there were certainly other organizations that we poached approaches from heavily. LinkedIn, ironically, as a primary competitor, was a particular pace setter with regard to certain sales operations practices, from whom we heavily borrowed, not to mention the writings of Aaron Ross, whose Predictable Revenue was influential in the later architecture of our sales org as it went from being me and a sole market development rep, to scaling up to a larger market development apparatus. Lastly Eric Ries’ The Lean Startup and Steve Blank’s Four Steps to the Epiphany were both influential in the beginning of our product development and hypothesis construction—in fact, I consider Founding Sales a cultural descendant of both books.
How to Use This Book
Importantly, this book is written in stages, in that your sales efforts, like your product development efforts, will typically take a stepwise path where subsequent stages build on the prior stages.
You can read through the entire book if you want—the table of contents has estimated reading times, and all in it shouldn’t take more than a few hours. That said, usually you should only go as far as the stage that you’re at—in that worrying about things like, say, Sales Hiring, before you even have your sales narrative, slides, or outreach collateral in place, is going to be a premature optimization, and likely a distraction.
The goal of the book is to be a resource you can come back to frequently, like a textbook, when you need to refresh yourself on something, or when you’re about to enter a new stage of your sales maturity process, and need to see what’s coming next.
The Two Stages of Your Sales Efforts
While the entire early stage sales transformation involves massive learnings, these learnings will largely fall into two distinct buckets. First, “figuring it out” and then second, once figured out, “scaling it”. This is related to the notion of “product-market fit”, that Eric Ries, Steve Blank, and Marc Andreessen have made common-parlance in the software industry. The first is before substantial product-market fit, mainly. The second is after. Both require different sales approaches, and applying the approaches designed for the latter, while you’re still in the first bucket, can be disastrous.
In the first epoch, it’s a tight, iterative process where you’re evangelically “selling” (there may not even be money involved) your solution (or, perhaps even “would-be solution”, before you’ve even started building it) to would-be customers, and sorting out if indeed they have the pain that you’re looking to address, how big that pain is, and what they’d be willing to pay to resolve it. This stage involves its own set of approaches, which, largely won’t be very scalable, but will support those early learnings.
The second epoch comes only after you’ve passed the first (importantly, for reasons we’ll discuss more in depth later). This is when you know your solution is viable, solves customer pain, for which they are willing to pay money, and now it’s simply a question of scaling the number of humans who are doing the selling, and, by extension scaling all inputs and outputs associated with that activity. This book will be split accordingly, with the first part coming first.
And while much of what will be discussed in the coming pages will be largely prescriptive in nature, the goal will be to present the sections in a way to provide a framework for understanding and thought, to aid you in your own solutions. Yes, taking what has worked before, and adopting is wholesale will shorten your learning curve, but if you don’t understand the underpinnings, there’s always the risk of engaging in Cargo Cult sales activities, where you don’t quite know why you’re doing the thing you’re doing, but it worked over there, so it must work over here, right? Lastly, by no means is what follows the end all, be all of early stage direct sales. So if you can adopt an engineering mindset as regards your sales approach, and consider yourself the product manager of your go-to-market, stealing best practices where they make sense, rejecting that which is no longer applicable or doesn’t fit, and building anew where needed.
Part 1: Experimentation Mode—pre-scaling when you're just starting out.
Evangelical Sales is Not Scaling Sales
When you’re first starting out, there are many things you will do in your “sales” role that don’t look anything like sales you see in the movies, at a large sales organization, and so forth.
The goal of the first section of this book will be to discuss what those stage-appropriate activities look like, to ensure that you actually get to the second part—scaling what works.
One hallmark of this section will be doing the activities yourself. A lot of first-time founders think that once they’ve built a product, they can “sprinkle some sales pros on it” and poof, it’ll work. This is an incredibly destructive misconception, largely popularized by both founders and funders who don’t actually know terribly much about sales, and are falsely pattern matching off of bad blog posts, movies, and sales books targeted for, and behaviors they’ve seen at, later stage organizations. This misconception has historically resulted in delayed, or never-reached product-market fit. Steve Blank talks about it substantially in his Four Steps to the Epiphany. Much like startups are not just littler versions of large organizations, startup sales is not a smaller version of large, established sales orgs.
There’s an old saying that an organization can’t really start scaling until they’ve fired their first VP of Sales. This conception falsely presents this as a failure of that VP of Sales. Rather, this is more a failure of the founders and funders in thinking that they could hand a sales professional, who’s not a product manager, a nascent product, and magically she would be able to sell the hell out of it.
At this stage, your “sales” is in large part evangelical product management and product marketing, and this is why you, as a founder, need to be involved in it. There needs to be as little abstraction between the person crafting, and taking the message of your value proposition and probing its utility to would-be customers, and the people who are working on deciding what to build, what to build now versus later, and doing the actual building. Because the loop between articulation, presentation, listening, and building needs to be a tight one. If it can be the same person (no abstraction), then all the better, within the bounds of time constraints.
In the case of TalentBin, Jason, my co-founder, led our product efforts, and engineering management, as we were building TalentBin, but as he and I are largely symbiotically attached at the brain, it was very easy for me to come back to the office, and discuss where our product hypotheses were good, where we should double down, and where we were wasting engineering investment. One might argue that we could have done a better job of getting “outside the building,” by me pulling Jason along more often, but we were able to get by with this approach, as long as one product-minded founder (me) was involved in the early sales processes.
Second, in addition to doing the actual work, yourself, a lot of that work will be activity that “doesn’t scale.” Like doing on-site sales visits for a product that will end up selling for less than $1,000 a year. The economics of that would never work at scale. Or manual implementation and professional services for early customers. Or manual lead generation via mindless copying and pasting from one tab of your browser to a spreadsheet in the other. Things like these are not scalable, but at this stage, it doesn’t matter. Y Combinator’s Paul Graham has popularized this notion with regards to consumer products, and it applies here as well. At this stage, this is largely an exercise in information gathering, and as such, is an investment exercise, as much as a revenue-generating exercise.
And while we’ve spoken above to the benefits founder-led early sales, and non-scalable activities, I want to take a second to flip it, and speaking specifically to the perils of premature professionalization and scale-mindedness of your sales apparatus.
Those who think they can just “sprinkle” some sales on it are going to be in for a big surprise. You will likely hire that first Account Executive or VP of Sales, probably from an organization that builds something competitive to your offering, and maybe even the incumbent. For instance, had we embarked on this ill-advised path, we would have likely hired an Account Executive or Sales Manager from LinkedIn. Once hired, he will then call on some of his existing accounts, and secure some early pilots, or worse, maybe even bounce off the purchasing decision maker, and not be able to tell you why. He’ll tell you what the customer said, but likely not what the customer meant. You won’t be able to tell between pure sales failure and product failure. And all sorts of other unpleasant things.
This is because, with exceptions, sales professionals are not product managers or product marketers. They are in the business of taking a known-good solution, and taking it to market, in a repeatable scalable way. They’re good at finding prospects that match a known-good persona. They’re good at persuasively presenting a known-good solution that fits a known problem. They’re good at having many concurrent customer conversations related to that known-good offering. They’re good at enlarging deal size, sniffing out deal influencers, and handling objections. But you don’t need that yet.
You need evangelical sales, which is a mix of product management and product marketing. So hiring a “rep from central casting” from a mature organization with a known-good, scalably solid solution won’t get you what you need. Save her resume for when you get to the second act and are ready to scale because she’ll be awesome then. For now, you need someone who can take a partially baked product, formulate a coherent narrative around it, present it, and then iterate. You need you.
Moreover, if you are unwilling to do these “unscalable” things to start, and instead assuming that because Reference Org ABC doesn’t do those things, that you can’t and you shouldn’t, you will encounter all manner of bad things. For instance, instead of having information-rich transfer with your would-be customers, you’ll be too focused on executing via telesales and miss critical insights. Or you’ll waste time trying to intuit what customers mean based on their activity on your website. Or by buying lists of prospects that are poorly targeted rather than prospecting your own lists, you’ll waste your time, energy, and money having bad conversations with irrelevant targets.
Another common anti-pattern founders in early stage go-to-markets fall into is simply not selling, full stop. That is, they falsely believe you can simply hang a shingle out for your offering, and magically customers will come and find you. And moreover, they’ll simply buy without you having to talk to them! Even better! The myth of the “sales rep-less” go-to-market is a persistent, seductive, and nefarious myth in the technology industry that trips up many a founder, especially those who hear stories of how Dropbox or Twilio or whatever large successful company has no sales staff. Of course, when you search on LinkedIn in those organizations for sales staff, they are indeed crawling with them. But don’t tell that to the founder who would love to tell himself the story that he doesn’t have to learn how to sell!
A lot of this bad behavior is driven by misconceptions and misplaced expectations on the part of founders. For instance, they think they “can’t do sales” because they’ve never done it before. Or that they’re not “salesy.” This is absolute bullshit. Sales acumen is not inborn. It’s just another skill to be learned. And if you can’t roll up your sleeves and learn a new skill set, then woe betide your startup, because startups are just one long chain of learning new things and solving new problems. Sales is no different. Just another problem to be solved. And if and when you make it to scaling mode, knowing the ins and outs of the sales individual contributor role will make you a better hirer, manager, and auditor of your growing sales force.
At the earliest stage of your go-to-market, your success will depend on an evangelical sales mindset, focused on rich, customer interaction and information gathering, and not being overly concerned about scale thinking, and “professionalization.”
So roll up your sleeves, because this is your job now, tiger.