Why it’s critical to build a repeatable sales process before hiring sales people – by Geoff Mair
The software’s been tested and shipped. The Series A Financing is in the Bank. Now it’s time to hire the Sales Team and watch the money flow in. What could possibly go wrong?
The short answer is, a lot.
Countless SaaS startups have failed because they hired a sales team before they completed customer discovery and built a repeatable sales engine – they hit the gas too early. These companies either assumed that they had product market fit even though they hadn’t defined a repeatable sales process by actually selling the product a bunch of times. Or they assumed, incorrectly, that hiring experienced sales people would lead to a repeatable sales process with product market fit because sales people would define it.
Either way, hiring sales people prematurely is a leading contributor to the top two causes of startup failures – never finding product market fit and running out of money. So getting this right is critical.
The most successful product companies treat product market fit as an iterative process where they are constantly finding it, expanding and re-finding it so it’s always difficult to say with absolute certainty that you have product market fit. But there are some good indicators that you are at least close enough to product market fit to start hiring dedicated sales reps.
You should have already sold the product to a number of customers – 5-20 depending on the deal size. Beta customers, unpaid pilots and short commitment trials don’t count. It’s one thing to get a customer to try your technology and give you feedback and something entirely different to get them to pay fair market value and commit to using it on an ongoing basis. Don’t kid yourself.
You should have a good understanding of how you’ll source leads and what constitutes a good lead vs. a bad lead. Some sales reps are really great at finding their own leads but most aren’t so it’s best not to bank on them figuring out lead gen while they are trying to sell.
You should know the steps you need to take and the messages you need to convey in order to get a customer to buy your product. You may not have lots of marketing materials and a fully defined sales process, but you need to at least understand your customers buying preferences and what messages resonate with them. And you need to understand this from experience having sold your first set of customers and noting the similarities in how they bought, what sales steps worked and what messages they reacted to as you were presenting your product.
If you don’t have a good idea of what this repeatable sales blueprint looks like, then don’t invest in sales until you do. You’ll be wasting valuable time, money and resources better spent iterating until you’ve cracked the code.