Overcoming Common Sales Challenges in Early-Stage Startups. How to achieve Sales Market Fit.
Today, I want to discuss the numerous challenges you may face when leading sales teams in early-stage startups.
Startups are different creatures by definition, and we all know it.
In today's market, it is even more challenging with shrinking capital and high expectations to achieve profitability.
I have worked in multiple startups and led sales teams in most of them, ranging from bootstrapped to past series D funding.
As the company size decreases, selling and managing salespeople becomes more complicated. However, I have found that the most difficult tier is past Series A.
Why Series A? Because you have finally secured your first round of funding after struggling for years to achieve product-market fit.
Now it's time to start delivering results, and everyone is watching.
I often speak to CEOs and founders who struggle with hiring their first Head of Sales. Unfortunately, these hires usually leave after a few months.
(Interesting article here from Gong regarding the average VP of Sales tenure)
I don't blame the Head of Sales or the CEO for this. Building a repeatable sales process in an early-stage organization is a massive task, and the odds of failure are higher than the odds of success.
You need to start selling your product in a repeatable way with a new team of people after the founders have already sold it, and everyone is watching.
While it’s not easy, there are things you can do to hit the ground running. Here is a 5-step framework you can use to accelerate your Sales Market Fit.
Hiring
Hiring should be your priority. The only way to successfully lead people is to have the best people. It is your responsibility to recruit them. Spend time sourcing candidates, having coffee, and networking with top performers.
Make sure to use hiring frameworks, including A-players Scorecards, listing the critical skills you need from each candidate. Also, use Screening, Chronological, Role Play, Motivational, and Peer interviews.
Hire slowly, make sure to have the buy-in of your team, and remember: cultural fit is more important than negotiation skills. Hire leaders, people who can lead even if they are not called managers.
Coaching
In the book “The Sales Acceleration Formula,” Mark Roberge said, “At HubSpot, I wanted to change the title of our sales managers. Instead, we should have called them sales coaches.” Great managers must be great coaches. Have a system in place for coaching.
Use open floor coaching, sales blitzes, demo sessions, and role plays.
Make sure to have a ready-to-go coaching program for your teams, both for the people who need to grow and those who need to excel.
Use 1:1’s effectively to help individuals grow within their roles.
Driving Team Performance
While you have to be compassionate, you need to make sure to keep your bar very high.
There is no room for poor performances. Indeed, if you are building your first team.
Two moments are crucial:
Having a system in place to promote your people
Having a system in place to let people go. You should have a reward system (promotions) that allows the top performer to flourish and grow.
It is also crucial to have Performance Improvement Plans (PIPs) in place if somebody is struggling.
Use your CRM to display all the main KPIs and dashboards. Revenue, Pipeline, Activities, Conversions—track 2-3 KPIs for each category and make them available to everyone.
Explain the expectations and hold people accountable.
Send a weekly Slack to all the leadership with the main KPIs.
Communication
Clarity is key. Communicate goals, metrics, KPIs, who does what, who is responsible for what, who made what decisions, and why.
Use Slack, email, or whatever works for you.
Make it all available on your company’s Notion for open access.
Own decisions, apologise if you made a mistake, and move on.
Another important piece of comms is with your peers: the Head of People, Product, and Engineering. They are all nervous during the early days, and you, the sales leader, must keep them informed.
They should trust you and understand that you have their back.
Don’t forget stakeholder management: managing up is as important as managing down.
Change Management
Great leaders help their organisations overcome challenges and change course.
But change is hard, and anyone managing a team needs a proven playbook to help them rally their employees as they acclimate to new ideas and initiatives.
You are constantly in changing mode. Embrace it and let your people do the same. The best way you can do this is to install this approach within your sales culture. Build teams that are strong and agile.
Summary
Sales Market Fit is crucial for early-stage organizations.
Managing a team can double or triple the complexity beyond series A. There is a huge expectation to sell the product that was once sold by the founders.
To achieve this, you need to build a system that works consistently in a repeatable manner. Failure is acceptable, but it should be done fast and learned from.
Although challenging, building the first sales team can have a significant upside for your organization. You and your team can transform the entire organization. Engineers can build better products, HR can hire more people, and investors and founders will be happy.
As the captain of the ship, salespeople are critical during the early days. While all functions are essential, salespeople are the ones we rely on. They rely on us, and it’s a symbiotic relationship. If they perform, we perform.
Build your sales team in the right way and your legacy will live forever.
