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A Technical Founder’s Notes on Sales Team Management

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Re: A Technical Founder’s Notes on Sales Team Management

#11

Post by jusben1369 »

pbreit wrote: post #7

Great article. I don't totally grok #2 about not turning over existing leads/deals to sales. That seems like a decent place to get started with minimal downside (as long as person has even the slightest discretion on shedding suboptimal situations). I also get concerned when sales learns that it can ask product for anything and get it. My experience is it's generally better to "sell what's on the lot". This avoids th…

Yes in general I thought this was a good article. But I also found some of it odd. In general sales people hate coming in with a clean slate. They want to pick up some existing customers and existing deal flow so they can learn quickly how the product is actually used (to help with positioning it accurately) and what the objections and issues are in the sales cycle. Perhaps the author was more implying "don't stick them with weird old BD/partnership stuff that isn't really 'real' to bog them down early)

Re: A Technical Founder’s Notes on Sales Team Management

#12

Post by jsonne »

angersock wrote: post #4

Interesting to see the justification for screwing engineers on the pay. EDIT: To clarify--the idea of commission is effectively an equity stake in either the revenue or profit (depending on the setup, right)? So, the sales folks see an immediate return on their work. The engineers, while salaried, have no such visceral link to the performance of the product...just some trivial paper and the thin sliver of hope they w…

Sales people have much lower base pay and it's made up for with commission. Engineers would probably dislike the ability of the product to sell as a condition of their salary. It's all a question of risk tolerance.

Re: A Technical Founder’s Notes on Sales Team Management

#13

Post by kwindla »

jusben1369 wrote: post #11
pbreit wrote: post #7

Great article. I don't totally grok #2 about not turning over existing leads/deals to sales. That seems like a decent place to get started with minimal downside (as long as person has even the slightest discretion on shedding suboptimal situations). I also get concerned when sales learns that it can ask product for anything and get it. My experience is it's generally better to "sell what's on the lot". This avoids th…

Yes in general I thought this was a good article. But I also found some of it odd. In general sales people hate coming in with a clean slate. They want to pick up some existing customers and existing deal flow so they can learn quickly how the product is actually used (to help with positioning it accurately) and what the objections and issues are in the sales cycle. Perhaps the author was more implying "don't stick t…

Yeah, the "BD vs Sales" thing is exactly what I was trying to get at. My experience is that companies hiring salespeople for the first time often don't have much of a sales pipeline yet, but do have a backlog of not-very-similar bizdev and partnership conversations going on. Salespeople who jump in on the bizdev "opportunities" -- which are not what a sales lead would actually call "opportunities" -- can spend a lot of time spinning their wheels. If, on the other hand, you've got a real pipeline and existing dealflow, by all means route that to your new sales reps.

Re: A Technical Founder’s Notes on Sales Team Management

#14

Post by kwindla »

bernardom wrote: post #5

Thanks, this is helpful. You mention having marketing by the time you hire the VP Sales, and you link to a few posts on hiring VP of Sales- do you have any links/thoughts on hiring marketing?

Jason Lemkin, again: http://www.saastr.com/hire-the-right-type-of-vp-marketing-or...

My experience is weighted towards building and selling enterprise products (so, selling to Fortune 500 companies). I actually think the VP of Marketing hire is even harder, for enterprise-oriented startups, than the VP of Sales hire. Most of the candidates you'll find with "big company" experience will want to do a lot of "big company" style marketing -- focusing on branding rather than lead gen, hiring expensive agencies, and positioning via high-profile partnerships. All of which strategems are problematic for startups, to say the least.

A VC friend of mine told me once that one of his investments had hired and fired 9 VPs of Marketing, I think over something like an eight-year span. (We were having a conversation about how hard it is to find -- and to evaluate before hiring -- marketing people who understand both enterprise selling and startups.)

Re: A Technical Founder’s Notes on Sales Team Management

#15

Post by kwindla »

yannyu wrote: post #8
nissimk wrote: post #3

Why should lead generation be outside the control of the sales group? Isn't marketing about a lot more than just lead generation? I always thought the best salespeople either come with there own long list of leads, or they are good at generating new leads, or both.

Even when lead-gen lives inside the sales organization, the salespeople who generate leads and the salespeople who close deals are generally not the same people. It's a different skillset to hammer the phones and repeat scripts than to gauge technical fit and negotiate. The reason to have lead-gen live in marketing is because modern lead-gen is often based on marketing initiatives. For example, a good source of leads…

What yannu said. Doesn't really matter whether marketing lives inside the sales org or not. It can work either way. (And your new VP of Sales will always tell you that marketing should report to her.) What matters is that you a) have enough and the right kind of marketing in place to fill the top of your sales funnel, and b) instrument and evaluate marketing performance at least as quantitatively and aggressively as you do sales performance.

Re: A Technical Founder’s Notes on Sales Team Management

#17

Post by bcoates »

jusben1369 wrote: post #10
angersock wrote: post #4

Interesting to see the justification for screwing engineers on the pay. EDIT: To clarify--the idea of commission is effectively an equity stake in either the revenue or profit (depending on the setup, right)? So, the sales folks see an immediate return on their work. The engineers, while salaried, have no such visceral link to the performance of the product...just some trivial paper and the thin sliver of hope they w…

Imagine if you as an engineer were told your total compensation was $150,000 per year. But only half of that would be certain. The other $75,000 would be dependent on how many unique features you helped ship in a month/quarter/year and how many of those were bug free. And you didn't have full control over the release cycle - there were a lot of dependencies with other orgs (devops/QA/product management) And as your c…

Sounds great. It would certainly beggar-thy-neighbor the deadweight over to companies that that give you the same check every two weeks no matter how little you deliver.

Re: A Technical Founder’s Notes on Sales Team Management

#18

Post by rcarrigan87 »

Some very good points. Most of this advice is more relevant for latter stage companies and it's an important distinction to make.

Founders often make the mistake of hiring closers (the kind of sales people this article describes) too early. They should really be looking for biz dev types who can go out and identify target markets, quality referral channels and refine the pitch to be eventually handed off to a true "sales person."

Re: A Technical Founder’s Notes on Sales Team Management

#19

Post by mpdehaan2 »

davideous wrote: post #6
angersock wrote: post #4

Interesting to see the justification for screwing engineers on the pay. EDIT: To clarify--the idea of commission is effectively an equity stake in either the revenue or profit (depending on the setup, right)? So, the sales folks see an immediate return on their work. The engineers, while salaried, have no such visceral link to the performance of the product...just some trivial paper and the thin sliver of hope they w…

Here's a good article on why Fog Creek does not pay sales commissions: http://blog.fogcreek.com/why-do-we-pay-sales-commissions/ We don't pay sales commissions at my company, and it works well for us. It does help the sales department to work more as a team.

Love the idea of sales not working on comission, as it also ensures more directness with the customer, and looking after their interest and what products are best for them. I still remember some calls with a software company back in the day and I really liked how they told me when a product wasn't for me, and when I should use the competition. And it was good advice. It increased my loyality to that brand a lot and I shared that story a lot.

Plus, you don't get things like the sales people making more than others for closing leads they didn't generate, which isn't a great feeling either. The whole team is responsible for the sale, and the sales guy may or may not have put more sweat into it.

Enterprise sales folks making 2-3x what senior engineers make - especially - isn't right - and it happens a lot. Pay should be equal to work expenditure, at risk of sounding somewhat communist. (let's not even start on 8 figure CEO compensation).

Re: A Technical Founder’s Notes on Sales Team Management

#20

Post by rcarrigan87 »

somehnreader wrote: post #16

How much commission is typical for sales people? Is it a percentage of the amount the deal is closed for? Is it a percentage of the customer LTV?

It really depends on your biz model and there are many variations. At my company we do 1.5% of the monthly revenue of each client the sales person has "closed." Typical monthly value of a client is around $20k and we have no cap on commissions.

Reps are also the first line of defense when it comes to customer service for their clients. This works great for us because the reps who provide the best customer service typically get most of their new clients from referrals from existing clients.

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