Startups, Sales, and Sales Hires

You have a startup, you seek funding and your investors appear singly focused on your sales. If only you only had more sales! If only you had a sales person. May be so, but it more likely not.
The best case made that I have read in this regard is reprinted below from Matthew Bellows, CEO of Yesware.
Beware the Sales Hire.To address the concerns of your investors you may need more results from a "Cofounder/Selling CEO" as referenced below. If you cannot do it, then find one, but it is a very different talent that a Salesperson.  Read carefully

You're Not Ready for a Sales Hire: 4 Reasons 

Hiring a salesperson too early is a good way to distract your team and waste money. But there are three signs when it is time.

Do you work in a start-up? Do you look around every once in a while and say, "You know what we need? We need to hire a salesperson to really get this company off the ground?" Well, you're probably wrong.

It's strange for me, a lifelong salesman who started a company to help salespeople, to advocate not hiring one of my own. But that's exactly what I'm suggesting, at least until you and your company are ready. Here's why:

1. Salespeople need something to sell.

Some thing—not a concept or a prototype. In general, salespeople stink atproduct development. They excel at revenue development. If you are envisioning a great salesperson rounding up customers for your idea, your beta trial, or your brand new service, then you are dreaming . Good morning sunshine!

2. Salespeople are expensive.

The better a salesperson is, the more expensive he is. If a salesperson feels your product isn't ready to bring to his contacts, she will hold back. Experienced salespeople are more protective of their contacts than the memory of their high school sweetheart. So for every day that your new sales gun thinks your product isn't awesome, she is paying a big opportunity cost by working at your start-up.And she is going to charge you for it either in money or in frustration.

And if you find a salesperson who offers to work for equity, ask her how many times she's blown away her quota.  Chances are she never has.  Don't make the hire. If you do find the exception to the rule, that person isn't in sales—she is a co-founder. Give her equity (that vests). 

3. Salespeople are hopelessly optimistic.

If you hire a salesperson, he is going to run at the job like a pole-vaulter. Heknows he'll clear the pole. But it's a rare salesperson who can keep the energy up if he doesn't get quick, positive feedback from potential customers. After a couple of weeks of failing, most good salespeople are going to start thinking about other poles they could be clearing. And the ones that just want to hang on to the job? Well, there's no quicker way to murder your company vibe than listening to your new salesman get dinged on 60 cold calls a day.

4. Salespeople are mostly risk-adverse.

Call it the curse of the fat bonus. A salesperson who has made $200,000 or $300,000 for a few years in a row is going to be counting the days until she can make that again. There just aren't that many money-really-doesn't-mean much-to-me-it's-the-work-that's-important kind of salespeople. 

So please, don't hire a salesperson to figure out what your customers need or whether they will buy some future product that might have some certain set of features. That's the job of the founding CEO. Yes, it's your job, even if you are an engineer.

How do you know that you are ready to hire a salesperson? Consider these three things: 

1. There's enough opportunity.

It will vary by company, but $1 million is the number I use. There has to be another $1 million in revenue that you can identify but that you cannot pull into your company because you are too busy selling to other people. If you can identify $1 million worth of prospects, it's a great time to hire a salesperson.

2. Your product is awesome.

What does that mean to a salesperson? It means you have reference clients—paying customers who the salesperson can leverage. When she sees your customer list, you want her to think, "Oh man, if the founder can get these customers, I am going to KILL IT here."

3. Your culture can handle an influx of sales energy.

If you have a tight, technical team, bringing in salespeople is going to change the atmosphere like a high-pressure system moving into the tropics. Batten down the hatches.

Hiring a salesperson too early is a great way to distract the team, waste your money, and bury a company. Hiring one too late means you won't grow as fast as you otherwise could. It's best to be on time, of course, but given the risks and rewards, it's much better to wait until you, your product, and your company have reached some of the milestones I've mentioned. Then make that first sales hire.

Matthew Bellows is CEO of Yesware, an email service that helps salespeople track conversations, create sales templates, sync emails with CRM and much more. @mbellows

Killing Your Startup

The post below should be required reading for any entrepreneurship class or prospective entrepreneur.  I've lived it this more than once but did not write it so poignantly about the experience. Anyone who starts "up" is more likely to end here than on top of the mountain simply because there are fewer black swans than we think and we can know only post facto.  The reality is even more grim, because after the difficult and seemingly heroic decision and the catharsis of thank-yous, the drudgery of closing takes months of endurance, one day at a time without the excitement of a dream in the making. It is not for everyone.


Some crazy dreamers have it in their DNA to do it more than once, learn from the experience, try again until they succeed (my bet is that Lucas Rayala is one of them). When they do they will value their success the more knowing how rare it is, but the pain he feels is very real nonetheless.
A note for students: in this shutdown, in the ashes, there may be the seed of  the phoenix's rebirth - If you go to the original post below and read the comments, you'll see that there is one entrepreneur, a stranger, that sees the value of Lucas' dream and efforts.  He offers to discuss collaboration to try and keep Lucas' dream alive. Always keep dreaming, the night is darkest just before the dawn starts.

Killing Your Startup on a Thursday Night

Lucas Rayala (Founder of Altsie)

This is what you do when you close down your startup: you call Rackspace and cancel the Windows SQL server plan. You email SendGrid and give them notice on your Silver SMTP Service Package. You close down your Wells Fargo Business Checking account and your Paypal Merchant account. Glamorous stuff. Harder than that: you email your cofounders and tell them you’re jumping into the deadpool. Your fingers will hover over the keyboard for a long time as you decide what to say. Because now shit is getting real.