Hiring Two

When it comes to building a startup, the initial sales need to be done by a founder.

This goes on until you get to roughly $500k in ARR or ~20 paying customers (don't get cute, $99/month customers do not count).

This is fairly common advice.

The #1 reason I won't work with a company is because the founder wants to skip this part.

As a founder, you have a superpower. Your cold outbound is dramatically more effective than that of a salesperson. You do not have to be as good at sales to perform as well as a salesperson. Customers like to talk to founders. Customers want to talk to founders.

And from a product standpoint, you're getting extremely valuable feedback. You are learning in real time what the market wants.

But this leads us to a natural point. You have done this. You are now at $500k in ARR (possibly more). You need to buy back some of your time. And you have enough money to actually afford one of these reps.

Here's the catch: you need to hire two

This is a classic SaaStr post that you should read.

The argument is that it gives you an A/B test.

If you only hire one rep and they do well, you don't know why.

If you only hire one rep and they do poorly, you don't know why.

There's a third outcome that you want to avoid: when a rep is just doing ok.

Imagine you've hired a mid market rep on an $800k quota 18 months ago.

They're at a $200k OTE, and they're going to do $500k in their second year. End of year, they're at 62% to plan.

But they fit in well with the team.

There's a good argument for keeping them around. Not putting them on a PIP.

They are paying for themselves.

And you can delude yourself that the $600k that they bring in dramatically increases your exit value.

Except it doesn't.

You're creating a culture of complacency.

And tech companies that aren't dramatically growing their revenue year over year don't get good multiples at all.

You need the sales team performing. You need a bit of pressure.

There is a reason that sales teams love to hire ex D1 athletes.

Friendly competition is essential in sales.

Camaraderie makes slogging through the rejections easier. It makes it that much easier to pick up the phone and the additional cold call.

Done well, this is all positive sum. And remember: the wider game is zero sum. If you and your team don't go out and find that revenue, someone else is getting the money.

There's a good chance that money goes to your competitor (who gets the ARR, the logo, the case study AND the multiple improvement).

This is binary.

You either get it, or you don't.

And I'm guessing you didn't start a company just to watch other people get the money instead of you.

Read another post:

Get new updates emailed directly to you: