5 Reasons Why Early-Stage Startups Don't Need Full-Time Sales Leaders
You may think: I'm biased.
Yes, I run a fractional sales business, and I'm writing about going fractional for your VP / Head of Sales role and ditching the full-time.
But the reality is that I'm not convincing you here to hire a fractional executive.
I want to show you what I have seen in my career and why hiring a full-time person too early may be terrible for your business.
Let's give a bit of context first.
Let's define early-stage startups: startups below €3M in annual revenue.
The smaller they are, the less they need full-time sales leaders.
But the reality is that with the revolution of fractional workers, the new technologies and the current state of tech, even bigger organisations may benefit from fractional executives vs full-time.
In general, some do need full-time sales, and those qualify as companies that have achieved the following:
Strong PMF on a specific TAM/division/product. Where you consistently create, move, and close pipelines with >30% win rates.
You have a current sales team of 5+ people.
You are pacing to surpass €3M ARR.
I have seen both sides: I was a full-time Head of Sales in early-stage startups.
I am now a fractional leader in early-stage startups.
I can clearly see now the good and the bad, but most importantly, I can see, from a founder's perspective, why it doesn't make sense to hire full-time sales leaders too early.
If you are <3M ARR, find external help or do it yourself.
Here are the most common and recurring 5 reasons why early-stage startups don't need full-time Sales Leaders:
1. Cost
During early times, hiring a full-time VP of Sales is expensive. If you are lucky, you must be ready to spend >150K per year until God knows what. VP of Sales is expensive. Also, this will likely be your highest-paid salary and how that stacks up with the rest of the managers and C-levels at your stage.
2. Founder's Expectations
As a founder, you may have already sold your product. But the reality is that your company is still too small to detach yourself from the sales organisation, and you might be too involved and hijack the job of your VP of sales. VP of Sales, by definition, likes space and ownership.
3. Ramp-up Time
During the startup period, you have to be fast. Over-structuring might be fatal. You want a plug-and-play solution ready from someone who has done this multiple times. Ramping up a VP of Sales takes 4-6 months, which is a lot of time at your stage. Onboarding and getting to know the rest of the teams are all things that will delay the actual execution.
4. Feedback
Giving and receiving feedback at this stage is crucial. Feedback from the market and feedback for/from your teams. The initial relationship between the co-founder and the full-time VP might be biased. Biased from the employment relationship, from fear of making mistakes, hurting their feelings or the fear of losing them. You need a direct relationship, with candid feedback flowing both ways. An external might be better for candid feedback exchange during those early stages.
5. Foundations
Like a house, you have to build foundations first. CRM, dashboards, outbound, tiers, inbound KPIs, hiring and onboarding. All of them can be done in less than three months if done right and fast with an external help.
Summary
The fractional revolution is upon us, and fractional employment will keep growing in the coming years.
GTM teams will face more challenges, with the increased difficulties, budget restrictions, and lack of talent.
Early-stage startups will end up competing with the giants in the same market.
Same market, unfair competition.
That is why early-stage startups need help.
They need help from a part-time/fractional executive who can execute fast and with high standards.
Another interesting concept of fractional rise and full-time decline during early times is building foundations.
Use the early times to build your foundations: Sales cycle, outbound, CRM, coaching, and hiring the founding members.
Also, that part can be taken care of externally.
It's difficult to predict what's happening and how 2024 will look for GTM teams, but if you can build a lean and execution-driven startup with fractional executives, do it.
You will have time to hire full-time later and build an incredible team.
But the time of growing headcount and growing revenue are over.
