4 ms·

Bullets to Dodge When Scaling Your Sales

24 points by relaunched 12y ago

Terr_ 12y ago
I can't remember the company-name, but wasn't there a story about how their sales/marketing folks hyped the improvements in upcoming Product 2.0 so much that all their long-term-focused customers decided to skip buying Product 1.0, and they went out of business?
- relaunched 12y ago
  I'm not surprised, but that story doesn't ring any particular bells. Marketing always has to be reigned in; they'll promise whatever they need to to sell and leave us in a world of shit to actually deliver it.
- baudehlo 12y ago
  Yes, Osborne Computers: http://en.wikipedia.org/wiki/Osborne_effect http://en.wikipedia.org/wiki/Osborne_effect
- deleted 12y ago
  [deleted]
lanstein 12y ago
If anyone has questions about building a sales team, I'm happy to discuss over coffee if you're in SF. I was the first sales hire at PagerDuty. Email is in profile.
- relaunched 12y ago
  That's a really great offer. I'm no longer in the bay area, but make it back a few times a year. I'll be sure to reach out when I'm around.
PeterWhittaker 12y ago
The "hire a sales architect instead of a sales builder" point may be the best one in there: A good sales architect will so do things that several (all?) of the other points are subsumed in their work. This [1] article from Harvard Business Review provides an excellent overview of the different types of sales staff needed at different stages. Too many companies go for "coin operated sales" too soon, instead of getting "agents" who will work with product management to develop and refine the sales process. [1] https://hbr.org/2006/07/the-sales-learning-curve https://hbr.org/2006/07/the-sales-learning-curve
notahacker 12y ago
The first two suggestions are very easy to argue against: (1) Focusing on more than one segment costs a lot less than focusing on the wrong segment. Especially when you're relying on anecdata to support your hunch that Customer Group X will actually be the easiest to sell to. It also means that even if your hunch that big enterprises are the companies that most desperately need your service is completely correct, the length of their sales cycle can still kill your startup stone dead. If they're not thrusting extremely divergent development and marketing-spend requirements on you, a diverse pipeline and customer base is a good thing. (2) A good "builder" is much easier to identify than the more elusive "architect" and will get your company revenue positive faster. Better CRM practices might salvage a handful of sales and fraction of your renewal rate in the long run, but they don't drive growth. And if your salespeople can't devise, adapt and share their own "scripts" your "architect" is wasting your money by hiring bad salespeople. Plus the salesperson that stresses their ability to make you five sales a week is much easier to hire and fire than the enigmatic architect with their flair for bike shedding, premature optimisation and effortless grasp of which stats prove the success of their process and which prove the failings of individual salespeople. Plus the builder, if they're still landing and collaborating on big deals, probably won't mind having to report figures into a newly created SVP Sales Ops at some stage. Before then, a software startup probably has plenty of analytical and process-automation skill on the rest of their team... I'll throw in a couple of others though (i) Don't hire salespeople and especially sales leaders specialising in the wrong type of market. Some companies succeed by soaking the market with sheer volume of calls. Some succeed through impressing the customer with sophisticated insight (even if the product itself is quite simple the sale can be highly conceptual and vice versa). Some depend on knowing how and when to pitch against the competition, and being very aggressive (up or down, depending on situation) on pricing. A small sales team can't specialise in all three, and a sales leader focusing on one in optimizing for one will, for better or worse, tend to drive salespeople specialising in the others away. (ii) Don't assume it's of sufficiently low importance to be left to interns to do it (unless "sales" means handing out flyers, or sales admin). Fresh graduates with the focus and drive to actually succeed in sales will be willing and able to find jobs that pay real money. There are a lot of entry-level positions out there for them and your no-name startup is an obstacle rather than a stepping stone to getting them. You want the primary point of contact with prospective customers and main revenue driver to be someone that's good enough to deserve more than lunch money (or if you're pre-funding, at least capable of negotiating themselves an extremely large chunk of commission and/or a founder-level equity). Even if most of your sales are driven by inbound marketing: you wouldn't let a developer of well-below-average ability commit straight to your production server; don't give the bottom percentile of entry level salespeople commit privileges to your customer base

24 points by relaunched 12y ago

Terr_ 12y ago

I can't remember the company-name, but wasn't there a story about how their sales/marketing folks hyped the improvements in upcoming Product 2.0 so much that all their long-term-focused customers decided to skip buying Product 1.0, and they went out of business?

relaunched 12y ago
I'm not surprised, but that story doesn't ring any particular bells. Marketing always has to be reigned in; they'll promise whatever they need to to sell and leave us in a world of shit to actually deliver it.
baudehlo 12y ago
Yes, Osborne Computers: http://en.wikipedia.org/wiki/Osborne_effect http://en.wikipedia.org/wiki/Osborne_effect
deleted 12y ago
[deleted]

lanstein 12y ago

If anyone has questions about building a sales team, I'm happy to discuss over coffee if you're in SF. I was the first sales hire at PagerDuty. Email is in profile.

relaunched 12y ago
That's a really great offer. I'm no longer in the bay area, but make it back a few times a year. I'll be sure to reach out when I'm around.

PeterWhittaker 12y ago

The "hire a sales architect instead of a sales builder" point may be the best one in there: A good sales architect will so do things that several (all?) of the other points are subsumed in their work. This [1] article from Harvard Business Review provides an excellent overview of the different types of sales staff needed at different stages. Too many companies go for "coin operated sales" too soon, instead of getting "agents" who will work with product management to develop and refine the sales process. [1] https://hbr.org/2006/07/the-sales-learning-curve https://hbr.org/2006/07/the-sales-learning-curve

notahacker 12y ago

The first two suggestions are very easy to argue against: (1) Focusing on more than one segment costs a lot less than focusing on the wrong segment. Especially when you're relying on anecdata to support your hunch that Customer Group X will actually be the easiest to sell to. It also means that even if your hunch that big enterprises are the companies that most desperately need your service is completely correct, the length of their sales cycle can still kill your startup stone dead. If they're not thrusting extremely divergent development and marketing-spend requirements on you, a diverse pipeline and customer base is a good thing. (2) A good "builder" is much easier to identify than the more elusive "architect" and will get your company revenue positive faster. Better CRM practices might salvage a handful of sales and fraction of your renewal rate in the long run, but they don't drive growth. And if your salespeople can't devise, adapt and share their own "scripts" your "architect" is wasting your money by hiring bad salespeople. Plus the salesperson that stresses their ability to make you five sales a week is much easier to hire and fire than the enigmatic architect with their flair for bike shedding, premature optimisation and effortless grasp of which stats prove the success of their process and which prove the failings of individual salespeople. Plus the builder, if they're still landing and collaborating on big deals, probably won't mind having to report figures into a newly created SVP Sales Ops at some stage. Before then, a software startup probably has plenty of analytical and process-automation skill on the rest of their team... I'll throw in a couple of others though (i) Don't hire salespeople and especially sales leaders specialising in the wrong type of market. Some companies succeed by soaking the market with sheer volume of calls. Some succeed through impressing the customer with sophisticated insight (even if the product itself is quite simple the sale can be highly conceptual and vice versa). Some depend on knowing how and when to pitch against the competition, and being very aggressive (up or down, depending on situation) on pricing. A small sales team can't specialise in all three, and a sales leader focusing on one in optimizing for one will, for better or worse, tend to drive salespeople specialising in the others away. (ii) Don't assume it's of sufficiently low importance to be left to interns to do it (unless "sales" means handing out flyers, or sales admin). Fresh graduates with the focus and drive to actually succeed in sales will be willing and able to find jobs that pay real money. There are a lot of entry-level positions out there for them and your no-name startup is an obstacle rather than a stepping stone to getting them. You want the primary point of contact with prospective customers and main revenue driver to be someone that's good enough to deserve more than lunch money (or if you're pre-funding, at least capable of negotiating themselves an extremely large chunk of commission and/or a founder-level equity). Even if most of your sales are driven by inbound marketing: you wouldn't let a developer of well-below-average ability commit straight to your production server; don't give the bottom percentile of entry level salespeople commit privileges to your customer base