Sequencing Steps from Founder Selling to a VP Sales
A practical guide on navigating from founder-led sales to scaling a sales team
Having advised over sixty startups in and around the Point Nine community on making the transition from founder-led sales to hiring a sales leader, we’ve learned this is a very, VERY hard phase for founders to navigate. Not because it can’t be done predictably and with low risk, but because most advice founders receive on the topic comes from people who haven’t actually done it themselves.
“Just hire a VP Sales. Don’t worry, you can just fire them if it doesn’t work out.”
Heard this before? We have. It’s terrible advice and doesn’t take into account the stress this puts on the business.
“Just hire Account Executives and SDRs. It’s that simple.”
Yup, also terrible advice. How many times have we seen this fail for one reason or another, most often due to a lack of experienced sales leadership.
In this post, we’ll give some practical advice from a large sample size of learnings on how to make the transition from founder selling to a VP sales. we’ve tried to take a very practical approach to increase the likelihood of success by sequencing things correctly and using a lot of hypothesis testing. We’ll also unpack why much of the commonly given advice just doesn’t work.
1. It’s All One Grand Experiment
We don’t know everything. Yes, I said it. Despite the confidence needed to sell, we need to acknowledge that in most cases, early sales teams have limited evidence that the product they’re selling has strong product-market fit. Most startups (and their investors) operate on a belief in the team’s ability to find and scale around product-market fit, but this is very rarely obvious from the start. No one is better positioned than a founder to run early tests here. As we grow our conviction based on seeing things work (or not work), we can then start to iterate and run more tests.
While we often don’t have a large sample size of sales data to work with when a founder is selling, we usually have at least a few clients. This can be a gold mine of data or at the very least a strong starting point.
Who are these customers? How did we get them? How do we get more? These are the questions we need to answer (obviously) and use to begin to form and test our hypotheses.
Hypothesis testing by running leads through our sales funnel gives us the results of our tests (both good and bad) that allow us to learn rapidly and iterate toward a repeatable and then predictable sales process.
2. WTF Is your ICP? (I stole this title from Christoph’s WTF is PMF article)
Your ideal customer profile (ICP) isn’t the total addressable market (TAM) you lied to your investors about, but the true group of companies who will LOVE your product NOW. This may be a very short list, and that’s fine — starting very narrow and expanding the definition to include a greater pool of prospects over time is the only way to be successful.
The ICP is our starting point for testing early hypotheses about our future sales funnel. Who are our happy customers? What qualities do they share? How do we qualify prospects in or out of this bucket? Let’s make this concrete and build this list of accounts and personas.
Selling is hard. Servicing customers is hard. Let’s start with shooting fish in a barrel with a very short list of well-defined prospects and not cast a net across the whole ocean and have to sort through that mess. We start with limited resources, and often it’s just the founder(s) doing the selling, so we better be selective and use our time wisely.
To illustrate this point I’ll share a quick anecdote from JC Taunay, CRO at Travelperk. He is an incredible sales leader and one of the best I’ve ever met. I was fortunate to host an enterprise sales panel at our recent Point Nine Founder Summit in Lisbon, and when I asked JC what the most important part of building a sales engine from the early stages is, he said, “Narrow your ICP. Narrow. Narrow and define as tight as you can get it. Stop talking to inbound leads who aren’t in your ICP. Don’t reward or pay reps on deals outside the ICP. In fact, forbid them from speaking with anyone outside your ICP.” He went on to say, “You can fire me if you don’t agree with this, but I will not build a successful sales machine if I can’t build the momentum with playbooks in a tightly defined ICP to start.” He’s built many world class sales orgs doing just this. I’m in love. Narrow and define your ICP.
Here’s JC emphasizing his point on constricting the ICP as Moritz Claussen of Cargo.One and Jason Liang of SuperAnnotate look on.
3. Run sales experiments against your ICP
If you’re still reading, then you agree we first need to define our ICP. Once that’s done we can start to lay the foundation of our sales engine.
How did we get our first few customers that fall in our ICP? Sometimes we have customers who fall outside our ICP, and that’s fine… ignore them for now. While we probably leveraged our network to get our first few customers, maybe we got some inbound leads or maybe we made a cold (or warm) outreach to a prospect and hooked a new client. Any information on what value we used to lure a prospect into our sales funnel (and got them to stick around to become a customer) is extremely good data on what we need to test.
Let’s start with testing some simple outbound principles on prospecting into our ICP. This is often a mix of LinkedIn, cold calling and cold emailing. What we want to do is test our best guess “value proposition” against our ICP. Can we share this value proposition (think direct marketing using humans) with a prospect to get a reaction and engagement? Can we repeat the process and get some initial meetings scheduled? If we can do this, then we have a signal on how to add leads to the sales funnel.
Once we have sales meetings booked, we take the prospect through the sales process toward a sale. There is an enormous amount to unpack with this phase of the sales process, but if leadership has closed a few customers already, then we should be able to add new customers over time by replicating what’s worked in the past.
4. Hire a sales Pioneer (examples at the end of the post)
You’re probably asking yourself, “Thanks Seth, but who’s gonna do all this hypothesis testing, pal?” Well I’ll tell you.
When we work with companies, we try to get some movement through the pipeline as soon as possible with whoever is willing to invest time into it. Often there isn’t enough time available for founders to run enough prospects through early tests to give us a high degree of conviction that we’re starting to figure it out.
In this case, we recommend hiring a Sales Pioneer. This isn’t a VP or Head of Sales and it isn’t just any Account Executive (AE). I call this the top 5% of AEs. A true pioneer. We’ve helped hire many Sales Pioneers, and they have a unique mix of sales skills, ambition, grit, and entrepreneurial spirit. I didn’t know it at the time, but I wouldn’t be writing this had I not been hired as a Sales Pioneer 14 years ago (we definitely didn’t use that term or understand the impact it would have on my career at the time).
Candidates often self-select into this role as they need to be a “full stack” sales rep and willing to do everything from building lead lists and prospecting (cold calls, email, linkedin) to managing and closing deals. While working alongside a founder is sexy, most AEs aren’t willing to focus on building the SDR playbook and hustle to book meetings once they’ve “made it” as an AE. The Sales Pioneer almost always needs to have startup experience or they struggle to understand working in an uncertain environment where the unknowns are unlimited. Usually a year or so of experience as an SDR and then two to four years as an AE is a good profile. Too far removed from the SDR world and they often aren’t great at building and executing as an SDR. Too little experience closing as an AE and they aren’t able to introduce sales wisdom to upscale the fledgling sales operations.
5. From Outbound Signal to Outbound Conviction
While we may have some ICP inbound leads flowing into the funnel, knowing how to generate more pipeline is essential to scaling. As we test our hypothesis on how best to generate sales leads, we need to look for signals that we’re doing it well. More signals equals more conviction, and based on this we can more aggressively add resources to our sales experiment.
The key to the Sales Pioneer’s success is starting off by building an SDR playbook. The reason we don’t recommend hiring SDRs as a first hire is that SDRs often don’t have enough experience to quickly test and iterate on an SDR workflow the way an experienced AE can, and thus inexperienced SDRs struggle to find and exploit a signal. On the other hand, many AEs don’t want to book meetings to create a pipeline and won’t provide a signal on how to iterate toward an SDR playbook. So hiring SDRs to figure out the SDR playbook is a fool’s errand, and hiring AEs who aren’t willing to work out the outbound motion will bleed cash from your startup.
The Sales Pioneer can and will build the SDR playbook by focusing on outbound strategies to start. By employing general best practices, hard work, and an iterative approach, this Sales Pioneer can help generate meetings and measure signals that can grow into conviction. These booked meetings are scheduled for the founder or whoever’s been selling to the first few clients. The Sales Pioneer attends all these meetings and shadows the founder/seller. The Sales Pioneer can assist in managing some of the sales cycles and will likely add some wisdom to the sales process.
As more meetings are booked, the SDR playbook matures, and there are more shadowing opportunities for the Sales Pioneer. Once the Sales Pioneer has learned enough, he or she can start taking lower end or less qualified meetings to practice selling and move on to more qualified opportunities with the founder now shadowing the Sales Pioneer. If the opportunities generated from the Sales Pioneer are progressing through the funnel, then our signal can give us the conviction to hire one or two SDRs. Who’s going to train them? (you probably guessed) The Sales Pioneer.
6. The Math of a Sales Funnel = Repeatable becomes Predictable
As you execute with your Sales Pioneer and then with your first few SDRs, you have an ever growing pool of data. The conversion rate from prospects enrolled in the outbound cadence/sequence to discovery calls booked is a great indicator of whether you’ve figured out the SDR playbook.
If you can repeat a process and book meetings and then have someone else do the same thing, what was repeatable becomes predictable.
One important thing to pay attention to with discovery calls: how many progress to the next phase of the sales funnel. That’s a good signal, but obviously conversion from first call to “closed won” is what builds true conviction.
If the SDRs can book meetings for the Sales Pioneer and he or she can close those deals using what they’ve learned from the founder/seller, that also becomes predictable. Layering in the average sales cycle length and average contract value gives some very valuable information on the economics of the sales funnel.
Combining all these funnel metrics starts to tell the story of the ratio of SDRs needed vs AEs for the AEs to achieve their quotas. Quota setting across the team is a bit of an art and a science early on, but the early results help inform how future goals are set for both SDRs and AEs — and eventually the Head/VP of Sales.
Once you have these conversion numbers with a large enough sample size, you now have the keys to both raise more capital (based on this math) and more importantly the keys to scale.
7. Let’s get that VP Sales and Scale!
OK, slow down for a moment. Why we don’t recommend hiring a VP Sales as a first sales hire is that a sales leader is very expensive if they can’t scale revenue quickly. But if we’ve followed the earlier steps and things are working, the question now is how fast can we scale revenue? As we now have a blueprint of a sales engine and a lightweight team to run the sales motion, are we ready to put both feet on the gas and scale? How much conviction we have on the scalability of our sales engine determines what we do next.
We have three viable options:
- We promote the Sales Pioneer into the Head of Sales. The pros are that the Sales Pioneer has the most experience with building and leading our sales playbook and infant org, but they may have limited leadership experience and likely limited or no experience scaling rapidly.
- We hire a VP Sales. A VP Sales has demonstrated that they can scale a sales org because they’ve done it previously. Maybe they did it with a Head of Sales title, but earning a VP Sales title is done by performing most or all of the requirements of a VP Sales with recruiting, hiring, onboarding, managing, hitting goals, and scaling rapidly. Note that just because their previous employer calls them a VP Sales does not ensure they are actually a VP Sales.
- We hire a Head of Sales. This Head of Sales is a junior VP Sales in that they haven’t done all the things required of a VP Sales already, so there’s a bit more risk in them having to figure things out as they go. But a Head of Sales is more likely to roll up their sleeves and sell alongside the reps as they are more junior and have more recent sales experience that they can leverage to build the sales engine. They also need to earn the VP Sales title and to do so they will leverage their strengths.
The costs associated with these roles align with their experience and the risks involved in where they are in their career/experience. So if you have high conviction that it’s time to scale, then you can afford a VP Sales because they will help you scale and drive increased revenue. If you’re confident you can scale a little, then start with a Head of Sales and save some money, but know they may not be able to take you as far as an experienced VP Sales. In short, know the tradeoff you’re making.
In Summary
You don’t need to reinvent the wheel. The processes we’ve outlined above work and sequencing steps correctly is key. If you hire the right people with the right skills at the right time to do the right job, you will build a sales engine. Don’t be influenced by the “too good to be true” charismatic salesperson who will solve all this for you and allow you to “finally get out of sales.” Founders must lead the initial selling efforts and coach the Sales Pioneer. The best performing early stage B2B SaaS orgs have a founder entrenched in the selling process until the engine is running. Avoiding this area or leaving it to someone else to figure out is perilous to your company.
Find another founder, advisor, or experienced sales leader who’s actually lived this phase of a business to help you navigate these first few steps in building your sales engine.
BONUS: Below are a few examples of successful Sales Pioneers we’ve worked with at P9
The “Hidden Gem” Sales Pioneer: Teddy Ludmer at Pento
When Teddy joined Pento she’d had 7 years or experience at her previous company and while she’d been promoted regularly her titles looked mostly like Account Management roles. But when we dug in it was clear that despite the Customer Success titles, she’d actually done an SDR job and an Account Executive job and had leadership experience in both. When she joined Pento she helped pioneer the outbound prospecting efforts, excelled as a top Account Executive, took team lead roles and has even pioneered a new role for herself in Partner Management at Pento where she’s thriving.
The “Classic” Sales Pioneer: Alex Dale at PetsApp
When we interviewed Alex his experience fit the Sales Pioneer very well. SDR for 2 years. SDR Team lead for 9 months. Account Executive for 18 months. The company he’d worked for was far more mature than we were, but he explained how he helped build the SDR processes and how he led the team once he’d mastered the role. He didn’t have a ton of closing sales experience, but he was successful selling a more complex solution with longer sales cycles and we believed (as he did) that he could learn to sell a more mid market offering quickly. He executed the Sales Pioneer playbook to perfection as a Senior Account Executive and helped build up a strong sales organization and culture at PetsApp.
The “Leadership Leap” Sales Pioneer: Caleb Robertson at Whereby
Caleb Roberston made the transition from Sales Pioneer/Account Executive at Whereby to successful Head of Sales and demonstrated that while the Sales Pioneer role certainly has its risks it also has its rewards. Before Caleb joined Whereby he’d been an SDR for 2 years and an Account Executive for 6.5 years and he’d held various team lead roles where he gained leadership experience. At the time he joined Whereby he likely had enough experience to land a Head of Sales role at another startup, but he joined as an Account Executive to build up the sales engine from scratch by prospecting and closing himself. He then took that momentum into the Head of Sales role and given his background he was set up to succeed where he could operationalize his sales processes and build and lead a team that could execute what he’d previously done as an Account Executive.
There’s clearly no silver bullet with the Sales Pioneer profiles, but hopefully these Allstars give you a few ideas on where to get started.
