# Scorecard ## Sales hiring - Optimize for the deal size - [Everything is Sort of the Same at a Given ACV (Annual Contract Value](https://www.saastr.com/everything-is-sort-of-the-same-at-a-given-acv-annual-contract-value/)) | SaaStr - There’s one thing I can tell you in SaaS, at least: **Almost Everything Except the Product Itself is Sort of the Same at a Given ACV (Annual Contract Value) Level.** - If your deal size is, say, $5k per year, there’s a certain way you sell. A certain way you market. A certain way you retain customers and prove support. A certain way, even, that you build software. A certain way you deal with a high velocity of leads, and a need to close a ton of deals each month. - With $20-$50k deals, it’s different again. You can spend more time with prospects. You close fewer deals. Customers will expect more services, more account management, more configuration. - At $100k+ deals, it’s different again. You’ll need to get on a plane, most likely. You may need solutions architects, more sales engineers, more support. Marketing can do things that seem very expensive, but don’t need much yield to be High ROI. Your engineers can build complex features that only a handful of customers use. Your VP Product will really get to know individual customers. - ⇒ I’ve learned I can pretty much predict what you’re doing, and what you will be doing in your SaaS company, and help you staff up, if I just know three things: 1. your stage, 2. your current Average Deal Size / ACV, and 3. your target Average Deal Size / ACV for next year. - So I’d pick candidates for all your top positions, even VP of Engineering, that have worked extensively and ideally primarily with customers/products at your target deal size. - Hire the smartest, bestest people you can. Of course. - But then, **hire people who can sell, who can market, who can ship software, who can retain customers, and who can build features, that match your target average Deal Size for next year**, for the next level of your company. - If you’re smart, you can pick that up in a month or two. But the skills it takes to sell to a $10k customer? That can take years to really acquire. ## Sales - What do you look for in a sales hire? - Mark Roberge - **A great Salesperson can be bad at your company if the context is completely different.** - **HubSpot Sales Hiring Formula** - Coach-ability - Curiosity - Intelligence - Work Ethic - Prior Success - **VP Sales’ job** - Hire & Coach, not doing the job of the reps. - **Sales feedback** - Give them one by one. The best coaches will identify the thing that is the most important, not the 50 things that are not working. ## 7 Traits Of A Great SaaS Sales Rep - [InsightSquared](https://www.insightsquared.com/blog/7-traits-of-a-great-saas-sales-rep/) 1. **Fluent with Technology** 2. **Understands the Value of the Product** - While your product might be amazingly innovative, prospects may not see it that way at first. Many people will believe they’re managing just fine with their current workflow, and have no need to upgrade to SaaS software. Prospects often don’t have the budget or see a pressing need to change the status quo, and that’s where sales comes in. - Great SaaS sales reps can convince prospects of the true value of your product, and how it will revolutionize the business from within. They can easily prove true ROI of a SaaS product, and convince prospects that they’re losing out on a huge opportunity if they don’t buy. A strong value proposition is the key to SaaS success, and top reps know exactly how to position and pitch a product to achieve maximum impact. 3. **Knows the Ideal Customer Profile Inside and Out** - Great SaaS sales reps know to look for specific characteristics when talking to a new sales prospect — including size, industry, and technology stack. If a prospect isn’t quite the right fit for the business, the best reps are completely comfortable disqualifying the prospect and shutting down the sales process before it goes too far. 4. **Values Long-Term Customer Success** - Great SaaS sales reps are always looking out for the success of the overall business, not just themselves and their quota. Even if it means missing their goals, top reps won’t lie to prospects in order to close the deal. These reps realize that every SaaS deal isn’t a one-time payout and know the vital business importance of payback period for every customer. 5. **Always Minimizes Discounts** - In SaaS, discounts are even worse than in traditional sales. Because of the financial structure of SaaS deals, discounts compound over time and will hurt the business long into the future. - For example, if a SaaS rep offers a 10% discount to a prospect today, that discount will apply not just to this month, but to every month going forward. It’s not really a one-time discount, it’s a recurring discount that cuts into profits every month. - Top reps will hold firm, and refuse to discount because their product is worth the price they’re charging. 6. **Understands Venture Capital** - Great SaaS sales reps can reassure prospects that their business will be there tomorrow, next month, and years from now. They understand who is venture-backed and what it means for the business, and how it can help them sell their product more effectively. 7. **Creates Strong Connections** - Most SaaS businesses focus almost entirely on inside sales, with reps calling and emailing prospects daily. SaaS reps often have to close deals without ever meeting prospects in person or shaking their hand. This means that reps have to build strong interpersonal relationships just using email, phone calls, and maybe a video chat or two. - Not every SaaS sale rep will naturally have these specific skills from the start, but if you hire reps that are talented and learn quickly, you can teach them to adapt. Build your sales team to embody these top SaaS sales reps qualities, and you’ll be on the path to building a powerful SaaS business. # Sales Interview Process ## [Mastering Sales](https://www.tonyrobbins.com/podcasts/episode-9/) - Sales Hiring Technique - Tony Robbins’ interview with the late Chet Holmes - **For every phone interview:** - **You:** “Why should we interview you? We are looking for the best” - **Candidate:** “Well you know I love sales, etc.” - **You:** “You probably are not the best.” Then shut up - **9 out of 10 candidates will say again:** “Well you know etc.” - **You:** “Thank you for your time” (after 5 min) - **What you’re looking for:** is the person who gets stronger when rejected “you know in my last company I brought X revenue, did better than my older peers, etc.” ## [Sales Interview Process](https://youtu.be/aIAbNeqn9K8?t=1441) – Mark Roberge – Ex-HubSpot CRO - **Interview starts in the lobby. Let the candidate lead** - Does the candidate break the ice? - Did the candidate do any research on me? *You should do research and know me, the interviewer* - Does the candidate execute a genuine, natural set of questions about me, my weekend, the company, etc.? The candidate or you asking questions? - **Why are you interested in working at this company? Where do you hope to be in your career in 5 years?** - *Easy questions to warm the candidate up. Well-articulated career goals never hurt.* - **I see you are an account executive at {insert their company}. How many account executives are there? What was your rank? Is that based on bookings or revenue? Is it based on the year or the quarter?** - *Assess “Prior Success”. Top 5% is strong. Top 25% is the bar. If the candidate is not in the top 25%, the candidate must be very strong in other areas.* - **What was it about your approach that allowed you to achieve such a high rank? Why weren’t you #1?** - Understand their perception of their strengths. - Beware of external excuse making for the second question (i.e. bad manager, bad territory, bad product). A strong self-critique is preferable. - **Let’s do a role play. I will play the VP of Marketing at a small security software company. You will play a salesperson at HubSpot. Let’s assume I downloaded a whitepaper from your website on Inbound Marketing, leaving my email and phone number, and this lead was provided to you this morning for follow up.** - Test whether sales candidate has a naturally curious sales approach. - Show curiosity? Ask great questions? Why you entered the trial? - Observe how the salesperson starts. A 10-minute pre-amble on their background and company is not good (show up and throw up). - A series of thoughtful questions about the prospect’s goals in downloading the white paper is good. - **During the role play, ask a challenging question about how SEO or inbound marketing works?** - Tests candidate’s preparation and learning curve - Ask questions about domain knowledge until they can’t answer. If they can remain confident - *Stop the role play* **How did you do?** - “Excellent” is not a great response. - A detailed analysis of what the candidate did well and could have improved on show humility and the openness to coaching. - **In every interview, I provide candidates with one strength and one area of improvement.** *Deliver coaching* - Tests openness to absorb coaching. - You can see if they take note or what they do with the feedback. How receptive they are. - **Repeat the role play** - Tests ability to apply coaching. - To see, if they improved or they are stressed out. # Sales Hiring Advice ## Building an Enterprise Sales Team - [Sequoia](https://www.sequoiacap.com/article/building-enterprise-sales-team/) - **Don’t hire a salesperson before your product ships.** It’s really important to have someone in the building who knows what customers want so you can nail that final 10% of your product and often founders think a sales person can help them do that. But it never works. Sales people can only sell. - **When your product is ready to ship, hire a moderately experienced rep, possibly someone who was recently promoted to a low-level sales management role.** That person will remember how to sell and will have slightly higher maturity and skill levels. - **Don’t hire a VP of Sales until you have 10 to 20 customers.** A great sales exec will wait to make sure the dogs are eating the dog food before signing on. If you try to hire someone before that you won’t see the best candidates. - **When you do hire that first sales exec, pick an up-and-comer regional sales manager who has managed 40 reps over a very experienced sales person who has managed 1,000 reps.** The latter is likely an administrator, which you won’t need. Give your new hire the title of VP NA Sales. This gives you the option of hiring a VP WW Sales later. - **Make sure you have lead gen in the company early on.** It is a crime to have telesales or direct sales people (both of which are very expensive) and not have enough leads. Hire a very transactional lead gen person who can measure leads and cost per lead. - **Hire a VP Marketing shortly after the VP Sales.** VPs of Marketing are tough to find. They are often either on the path to CEO or retreads. Be careful of the latter. - **Hire a full-time controller early on once you have $1M-2M in revenues.** At that point you have something to count and the company will start to need some of the control systems in place that make for clean contracts and overall good business practices. - **Experience is a great thing, but don’t be fooled into picking someone because of his or her resume.** Beware of people who have a set playbook. Each company is different and someone who comes in thinking that they know the answers won’t be looking for new answers – and definitely won’t be asking questions. Also, be careful of anyone who has had numerous jobs with 2-year tenure since it is easy to hide incompetence for a short period of time. - **When doing a retained search, talk to the search person once a week and do not get managed into a final candidate.** There should always be new candidates entering the funnel in case the final candidate turns out to be a bust or walks away. Prepare a 10 slide pitch for the search exec and for anyone meeting candidates. It is important that all interviewers say the same overall messages about the company. Make sure that you get to references that someone on the team directly knows. Do not trust blind references. ## The Zero B.S. Method To Recruiting A Killer Sales Force – [Andreessen Horowitz](https://a16z.com/2015/09/16/the-zero-b-s-method-to-recruiting-a-killer-sales-force/) - **Start with data: the b.s.-killer spreadsheet** - Before the interview, have recruiting (or you can) **ask the candidate to submit their W2** and fill it in with information that foots to their W2 — the previous years payroll — **including commission in the last X-years they’ve been a sales rep**. Put that data together by year and preferably quarters and **then calculate numbers of deals done**. Then let the spreadsheet show vs. **tell their average and median deal size**. You will find it often paints a different picture than the one people highlighted on the outside. It’s like an x-ray: Immediately, a pattern — **is this a consistent killer performer or a lucky puncher**? — emerges around their performance, which helps determine their likelihood of success in your particular business and its dynamics. - Why not just ask them for this number instead of making them go through your spreadsheet-calculation exercise? Because people, and especially salespeople, will tell you just what you want to hear. I am not saying they’re lying! It’s just that most people end up remembering the best or most salient — but not necessarily the most representative — information. Or, they will share average deal size, which is not as interesting as the median, the actual range of how many deals they did, and deal-flow distribution over time. - **What if some people aren’t comfortable filling out the spreadsheet?** Or they feel it’s above them (“I am a rockstar senior sales executive, why do I need to belittle myself by filling out all these forms”)? My answer: No need to apply, then. - **Start with dedicated sales recruiting to get the best sales force** - You cannot afford to have a recruiter that doesn’t “speak sales”, no matter how intelligent, since they will lose those rockstar candidates for you. - Build your company’s “sales school” sooner rather than later. It’s the only way to scale. - **Approach hiring just like you’d approach building pipeline** - It took me a long time before I understood the value of “sourcers” in sales recruiting, but it’s not dissimilar from having a SDR (Sales Development Representative) team for a sales force. - **Conclusion** - One of the things I am most proud of is that a year into the sales of SuccessFactors — a company that had existed for over a decade by then — the cloud sales team we built was still mostly intact. Yet it was one of the highest-performing sales teams at the time, so they were constantly being hounded by recruiters. I believe it’s because we’d taken the time to include them in the company’s future and keep them motivated. But it really began with how we hired them: “The interview” was the first level-setting baseline, thanks to the type of guidelines shared here. ### Interview + Questions rockstar sales reps ask - When you begin the interview with data, as described earlier, the bullshit interview suddenly turns into a richer, more grounded conversation. Especially if that candidate has filled out the spreadsheet in advance, you can go over the greetings and basics in the first 5 minutes and now have 55 minutes left for a much richer, more grounded conversation. - **Questions rockstar sales reps ask:** - How large is the market, and the “territory” being carved out within that? Who else is there? - Are there customers you’ve already successfully sold this product to? - How quickly did the last 3 reps get to quota? - How many sales reps within the company are on 100% quota? - How many reps didn’t make it? Why? - How many of the sales reps hired are still there? - How are renewals converting in the last 10 deals sold? - Are the reps selling the same type of product? - How many price concessions have had to be given to meet quota? - The really aspirational, motivated sales reps will go even further: Is the product having an impact? What’s the runway for the product? And so on. # First Sales Hires ## When an SaaS Startup Should Hire a Sales Person - Jason Lemkin - [CXO Talk](https://www.cxotalk.com/video/when-saas-startup-should-hire-sales-person) - **I think in an ideal world, you as the CEO or a co-founder should close the first 10 customers him or herself**. Ideally at least the first five of those 10 unaffiliated customers, you’ve got to go out and close them. Otherwise you don’t know. You cannot even hire the most junior sales rep if you haven’t done it before, that’s a recipe for disaster. - **So close 10 yourself and as soon as you are comfortable that you know how to do the next 10, hire two reps**. Go out and hire two reps, and don’t hire one because you have got to AB test especially if you haven’t done before. So hire your first two reps at 10 customers, and then hire your VP of sales that you can wait once it’s repeating, not necessarily repeating at the world’s fastest rate, but every month it’s repeating. Usually that is somewhere around 1 million, 2 million in revenue. So it might need to push it to 500K in revenues and maybe you have deferred to 2 million. But don’t hire the VP of sales before there is at least some engine going, because the job of the VP of sales is to make that engine run faster. ## A Founder’s Guide To The First Sales Hire - The Startup - [Medium](https://medium.com/swlh/a-founders-guide-to-the-first-sales-hire-afe5a8650868) - **It’s not unheard of for a startup with no real revenue, but a minimum viable product (MVP), to hire a salesperson.** There’s some logic for a startup in this position to hire someone with 1–5 years of experience, to test the market and get feedback, particularly if the founder(s) must shift focus to other aspects of the business. But the reality is that startups with zero revenue may have a hard time attracting strong, tenured sales talent. - **First sales hires are most common when a business has paying customers and some revenue traction already.** This is where your options open up a bit and the decision tree becomes more complex. One avenue is to hire a junior salesperson, someone with 2–5 years of experience. With this option, a founder can continue to execute demos and close deals, but allow the junior sales hire to handle outreach and lead generation. This would allow the founder to increase sales capacity, delegate some of the more mundane parts of selling, and still maintain control of the sales organization. - **Sales hires must also feel comfortable with the pace of work, the level of resources available, and the amount of hustle required**. This alignment is important for fostering a positive culture and can be crucial to the success of the company. When things go sideways, as they inevitably will at some point, you’ll need to know the people surrounding you are as committed to the mission at hand as you are. - At my last company, we were in the process of raising our Series A round of financing with limited runway, and our lead investor walked away from the deal days before closing. This left us with barely enough money to make rent, and we had to go back out to the market to start courting potential lead investors again, a process that can take months. In that moment of crisis, our team of twenty decided that we would forgo our salaries until we secured a lead investor, so that we could keep the lights and servers on. Next time you’re meeting with a candidate, ask yourself, will this person put company and team first? ## Hiring Your Startup’s First Salesperson - [Tom Tunguz](https://tomtunguz.com/when-to-hire-a-salesperson/) - In a month, the average salesperson has the time to convert 60 leads to customers. Assume a sales person works 20 days per month for 9 hours per day. Assume each sales call takes 45 minutes of time, 15 minutes of preparation/followup and each sale requires 3 calls (introduction, product demo and close) and voila - 60 leads. - **But not all leads convert.** Typical conversion rates for inside sales teams are roughly 20%. Of the 60 leads, only 12 will likely convert to customers. Those 12 customers need to produce about $121 of MRR quota each which implies a pricing floor of $1400 per year. Changing the figures in the funnel, in particular, the close rates and the ratio of OTE to bookings, will alter this figure and the sales' teams profitability. - **Our sales person must contact 60 qualified leads, users with intent to convert to paying customers, to achieve quota.** To satisfy that monthly demand, the product and marketing teams must attract enough new users and qualify leads through the funnel. Otherwise, the salesperson will lack the leads to be successful. - Freemium businesses convert about 2 to 4% of new user accounts into paying customers. More traditional enterprise sales tend to convert 10 to 15% of leads (people signing up on the home page asking for information). - A freemium business needs to generate about 3000 users that could pay $800 per month to gin up 60 qualified leads each month. And a traditional enterprise software startup needs to create 400 signups. **Until your startup is filling the top of the sales pipeline with roughly these numbers, you risk hiring a salesperson too early.** - **When your startup’s software can command a high enough price and when your lead volumes reach a certain threshold, you should have the confidence to hire your first salesperson.** ## The first magical sales rep - [That First Magical Sales Rep (Updated) | SaaStr](https://www.saastr.com/that-first-magical-sales-rep/) - **I remember the first time I realized my first successful sales rep was a Sales Magician.** I was at Dreamforce, and right on the street, one of our customers grabbed me by the arm — forcefully. The customer said, “Hey are you with EchoSign?” “Yes,” I said. “I LOVE Joe. We all LOVE Joe. I’ve never met someone so passionate about e-signatures!”. Our sales magician. - **Now later, you won’t need too many of these magicians.** Often, there is just 1. After reps 2-3, you start to train them. You find a VP of Sales, and she puts in places processes, and deal reviews, and collateral, and so much more. The Sales Magician is rarely rep #4. And remember, later, the organization may not even need magicians. So make sure there is always a key role for your Sales Magician, later. - **But in every great SaaS success story, there is often a Sales Magician.** Ask almost any SaaS CEO. This special hire that was the first great sales rep, when the others before her … failed. And she often came from a background no one would have quite predicted. - [Jason Lemkin - Twitter](https://twitter.com/jasonlk/status/1189225395155017735) : - **Every successful start-up had a Magical Sales Rep in the early days:** - often from a non-traditional background - > really< got the product, + every use case - knew how use the product to >truly< solve prospects' problems - clever enough to work around big gaps - part evangelist - **look further ... look beyond the resume ...** - ask yourself, **Would I Buy From Her? Truly?** - ask yourself, **Do I Want to Buy from Her Already?** - **Does She Truly Get It?** - Then take the risk. Make the hire. - Find your magic. ## [Your First 5 Sales Hires to Jumpstart Pipeline Generation - SaaStr](https://www.saastr.com/your-first-5-sales-hires-to-jumpstart-pipeline-generation) 1. A Digital Marketer or Content Creator 2. A Pair of Sales Development Representatives 3. A Quota-Carrying Sales Representative 4. A Revenue Operations Lead 5. A Customer Success Representative ## [How to Scale a SaaS business: 5 Growth Tips with Jason Lemkin + Algolia - SaaStr](https://www.saastr.com/how-to-scale-a-saas-business-5-growth-tips-with-jason-lemkin-algolia/) 1. **On finding product-market fit in the early stages** - Jason identifies product/market fit (PMF) as the stage where a startup that has struggled to get customers suddenly sees growth but they don’t know why. - The next stage in achieving product-market fit is to create a dialogue with paying customers about the gap in features. Understand and zero in on that one feature that will make them pay more. “You’re paying me $500 a month. What could I build for you to pay me $2,000 a month? If your customers love you, they will want to buy more from you,” said Jason on talking to them (over and over again) to develop PMF. 2. **On acquiring customers consistently** - You may not have that magical sales person, but as a founder, you simply have to sell. - The idea is to identify your superpower(s) and double down on it. Most SaaS startup founders have shiny object syndrome— they want to try events, blog articles, partner programs, outbound outreach all at once. This will spread you thin, not allowing you to focus on one channel entirely. It also becomes difficult to track and invest more in the channels that are working well in terms of lead generation. 3. **On hiring your first (and second, and third) sales person** - Think about whether you would buy your product from this person. - For your first sales “magician”, you want someone who knows your product really really well – way more than salesperson #100. “I often find that quirky, innovative, super smart people who may have been in a different industry do great in these positions,” says Jason. 4. **On hiring a CRO or CMO** - In most cases, companies are looking to hire a VP of Sales but confuse it with CRO or CMO. The Chief Marketing Officer (CMO) or Chief Revenue Officer (CRO) is not an expanded role for the VP of Marketing or Sales. 5. **On coping during a global crisis** - “I am not saying you are not going to hurt. But stop focusing so much on the downside and put all of your efforts into the segments that are winning”, Jason advises startup founders. ## How To (Successfully) Source Your First 2 Sales Reps - [SaaStr](https://www.saastr.com/how-to-successfully-hire-your-first-2-sales-reps/) 1. **Use Recruiters and other paid channels. Or At Least, Don’t Be Cheap Here.** At least to help. Pay them, and be very responsive to them. They’re on a contingent basis, so don’t leave them hanging. 2. **Use one of the various video recruiting sites as well.** Post a video telling them about how great your product is, the rep sends back a video telling you why he or she can sell your product until the cows come home. 3. **Insist on 2+ Years of Experience at Your Deal Size.** Don’t go too green or inexperienced, at least, not at first. Get 2-3 years of on-point SaaS experience, i.e. at a SaaS company that sells at your approximately price point. At least, get 18 months as an AE (not just as an SDR). 4. **Don’t worry about on-point domain expertise.** Don’t try to hire someone out of your vertical or niche. You can help the rep there. Instead, try to find someone great. 5. **References Really Do Matter Here — from Customers Too if possible.** Sometimes, references are just a Check the Box exercise. Not here. If his or her last boss doesn’t say the rep was great, simply pass. ## How to Ensure Your First 2 Sales Reps Actually Work Out - [SaaStr](https://www.saastr.com/how-to-ensure-your-first-2-sales-reps-actually-work-out/) 1. **Would YOU buy from this rep?** Yes, you the founder/CEO. Later, as you add reps 3-300, you’ll find it takes a village 2. **Does he or she have at least 18-24 months of experience selling SaaS products successfully — on quota?** Later, you can hire all types. Later, folks that haven’t sold directly before, you can hire them into entry-level roles or SDR roles. 3. **So what do you give on then?** - The reality is, what you’re probably giving on is The World’s Best Closers. You may hire very good reps… but not the absolute top of the pack. - And that’s OK, in early days. Because hiring someone that is Good, that You’d Buy From and Trust, That Has Been Trained in SaaS Sales… is going to work. ## The Top 10 Mistakes Made in Hiring Your First Sales Team - [SaaStr](https://www.saastr.com/the-top-10-mistakes-made-in-hiring-your-first-sales-team/) 1. **You hire a sales rep to sell before you can prove you can do it yourself.** You have to prove it’s sellable first. You can’t outsource this. 2. **You hire a VP of Sales to sell before you prove you can do it yourself.** You gotta prove the process is at least just barely repeatable before you hire someone to turn up the volume and spin the wheel faster. 3. **Any of your first 2-3 sales reps are folks you personally wouldn’t buy from.** Because then you’ll never trust them with your precious handful of leads, and they will fail. No matter how well they did in the last start-up. 4. **You insist reps n°4-400 are folks you personally would buy from.** It takes a village. 5. **You underpay.** The best salespeople want to make MONEY. 6. **You don’t fire reps that fail in one sales cycle.** If you can’t close anything in one sales cycle, you never will. 7. **You ask your VP of Sales to Carry a Bag for too long.** Her job is to recruit a great deal and hit the overall plan. Not sell herself, not mostly. Have her own the whole number, the ARR plan. Not an individual quota, not for very long at least. 8. **You hire someone that last sold Nu Skin.** This can work later, but not in your first reps. They need to understand how to sell vaguely similar products at vaguely similar price points. 9. **You hire because she worked at Salesforce/Box/DropBox/wherever.** Hire because they can close. Vaguely similar products at somewhat similar price points. Not because they are one of 4,000 reps at Salesforce that sell a product with $6,000,000,000+ in revenues, a proven brand, and huge infrastructure behind it. 10. **You allow any great reps to leave.** You should strive for 0% voluntary attrition, not to fire the bottom 1/3d. That’s for Boilerrooms. Great sales teams stick together. Great sales teams inspire each other. Great sales team attract a higher and higher quality of reps as time goes on. ## When you hire your first sales rep just make sure you hire two - [SaaStr](http://www.saastr.com/when-you-hire-your-first-sales-rep-just-make-sure-you-hire-two/) - And there’s only one problem with that: no matter how well that rep does, you won’t learn anything. **You need at least 2 to learn.** - **Here’s why:** - **If your first rep does poorly, you’ll have no idea why.** The rep will blame you, your crappy product, your crappy company, your crappy lack of marketing. Which may all be correct. But if the rep is a bad fit, that may be the real reason. You just won’t know. - **If your first rep does well (our experience), you’ll still have no idea why.** Does the product sell itself? Is it the rep’s suave phone skills? Is your deal size, and are your customers, representative of the ones you’ll really get in the future? Or is this rep only good at a a certain type of customer — and are you leaving other potential customers behind? You just … won’t know. ## The ultimate sales hiring guide for B2B startup founders! | [The Close.io Blog](http://blog.close.io/sales-hiring-101-for-startups) - **Why hire two sales reps at a time? Four simple reasons:** 1. Friendly competition 2. Less dependence on individual performance 3. More data for future sales recruiting 4. More firepower - Don't worry about setting up commission structures at this stage in your sales hiring yet. It's too early. - **"If you were to start a company, instead of getting a job right now, what would you do?"** - I love this question. It started as an accident, but that ambiguous ending is there for a reason. Tell me what the startup does, or what you are going to do in that startup. Or both! Just tell me something with some real passion. If you have passion I'll deconstruct your idea to get a sense of how you think. If I don't like your idea or thought process, even better, because the candidate can then explain why they want to pursue that idea! # Compensation - [A Very Simple Sales Comp Plan For Your First Sales Reps | SaaStr](https://www.saastr.com/a-very-simple-sales-comp-plan-for-your-first-sales-reps/) - $500/mo is $6,000 a year so that’s a big enough deal size to support a traditional SaaS inside sales rep: - **Pay 20% of the expected ACV (annualized contract value) in total comp — but that might mean less commission until they’ve covered their base cost for the month**. - **If a month-to-month deal churns / lasts < 12 months**, you can claw back a proportionate amount of the bonus. But it won’t matter that much. - If cash is an issue, you can pay reps monthly commissions on monthly deals instead. But try not to do this. - To make, say, $140,000 — they’d need to close $560,000 over the course of a year (4x), or 116 total deals over the year ($560,000/$6,000 ACV) … i.e., close about 8-10 deals a month. - [My go-to Compensation Plan for sales reps and VPs | LinkedIn](https://www.linkedin.com/pulse/my-go-to-compensation-plan-sales-reps-vps-dimitris-glezos-2gcge/) - A good Base Salary and OT-C ratio is 50:50 for VP Sales, about the same but no more than 60:40 for Account Executives and up to 70:30 for Sales Development Reps. - Quota - **Set a quota (or sales target) that's ambitious yet achievable — the kind they can hit 4 out of 5 times**. This is important. The quota should be a stretch but not a fantasy. Both you and the person need to have an 80% confidence they can hit it consistently. - Commission structure - **The simplest way is to pay commissions linearly**: for every $100 someone brings, you share, let's say, $10 with them.