Growing a sales team: a guide for startups
Things have been going well. You and your founder have been hustling hard spreading the word about your business. You’ve got your solid sales team – there’s only two of them, but they are your rocks. They know your service inside out. You engage in high level discussions and they give you great input. You’ve developed a tight team, and the cash has started to flow, and your accountant is happy. Your market is out there for the taking, and you’ve found the golden nugget. You were even able to purchase a bean bag chair – it’s lime green.
Then you receive the call.
One day, you open the paper and see your competitor has just expanded their sales team. In the world of technology, the winner usually takes all, and you can’t let that happen. Try being the little guy against Salesforce – it’s not happening. At 1:30 am, one of your investors calls you and tells you to make moves, fast, or you’ll get pushed out.
“You’ve got revenue coming in, but without an aggressive growth plan, a plateau is on the horizon,” he tells you. “Just go out there and hire ten more sales people. You’re welcome.” Do you take his advice?
Don’t make the same mistake I did.
At a smaller scale I’ve been there. I opened my first company two years ago – a telecom company called TelClarity. When I put it together, I outsourced lead generation to another firm. We had a nice setup – all day they were slamming phones, sending out millions of cold emails and harassing every CFO and CIO this side of the Mississippi. The result? A ton of activity, a lot of exciting opportunities, and some revenue. But did a huge spike in activity mean a huge spike in revenue? In fact, after a bit of initial traction I started to see diminishing returns and then it nearly came to a stop. The problem was that I was trying to scale, but I didn’t have the fundamentals of messaging down and couldn’t tell you what my value proposition was other than “I save money on telecom.” In retrospect, it seems crazy, but at the time this was true.
After a bit of a struggle things changed, but it wasn’t until I had refined my messaging, understood who my buyers were, and most importantly, what my value proposition was. When I scaled the next time around I did it without hiring a single salesperson and used automation to talk to a considerably smaller group of potential customers in a much smarter way.
The thing about business is it’s never black or white. Hiring a big team too fast is usually more of a burden to your business than a help. Think of the training times, the onboarding, gauging input from so many more people, and now you’ve got mouths to feed and salaries to pay. It’s kind of like jumping from a Volvo to a Ferrari just because you got a raise. The insurance alone is going to make you sell that thing in six months… and maybe giving the engine a tune-up and putting in a new sound system is all you need to make the ride a bit more exciting. Plus, you’ll sleep better at night not having to worry about the financing. Watching a workforce jump from two to fifteen in three months, only to have them laid off 6 months later makes me shake my head. All of those people’s careers have been affected by poor planning and leadership from the company’s management. For a CEO, that’s heavy collateral to have weighed on your shoulders.
The same can be said for designing a sales team. Today, factory work in North America is mostly no more – the era of the creative class is here. But the principles for running a business don’t change. By focusing on your internal talent, giving them an arsenal of tools, tricks, training, and encouraging innovation, you let them train up to get the black belt in sales. Maybe you add a sales person or two, but fast expansion of headcount is risky business. Investors want to see return, but they may not know the intricacies of running your business, so take advice with a grain of salt.
People, Technology and process are crucial.
There’s a fine blend that is evolving between technology, science and sales. If people from the technology side can inform the behaviour of sales departments, this is where efficient, intelligent workflows can evolve. I moved from telecom to automation precisely for that reason – I enjoy equipping companies with arsenals for the creative challenge, and the opportunity to create solutions for a number of industries. It’s an exciting niche to be in. By being at the cutting edge of the automation, an outsider like myself come in exactly where needed and hand off the reins once the system is set. Ask yourself: would you rather invest in saving employees five hours a week, or hiring more employees? If you said yes to the latter, we’ve got a difference of opinion.