10 Things to Consider About Being the First Sales Hire at a Start-up
Many sales pros want to be the first seller at a promising start-up. (Admittedly, it’s pretty cool.) But they often have no clue what they’re getting into — or even how to vet the opportunity.
Working at a start-up can seem glamorous, but it can also be more challenging than working for more established sales orgs. So, how do you know whether the opportunity to be the first seller at a start-up is a good one?
When doing your research on a potential career opportunity at an early stage start-up, here are 10 questions you should know the answers to before you accept:
How many deals have been closed so far?
You’ll want to make sure that the organization has closed ten or more deals before you join as the first seller. It can be a major red flag if they haven’t closed any at all, of course. But iIf the company has closed fewer than ten deals, you’ll really want to dig into the specifics of those deals to understand how repeatable they are.
How much involvement has the founder had in dealmaking?
You may have the opportunity to be the first sales hire, but you won’t be the first to close a sale. At the beginning, start-up founders have to wear every hat — including sales rep. And if they’ve met the minimum requirement from question one, ideally, the founder will have been involved in most if not all of them. As the company makes the conscious decision to transition from founder-led sales to a true sales motion, you’ll want to make sure the founder stays involved in the process. And if they haven’t been involved at all, that’s a red flag.
Who will I report to and how much involvement will they have in selling?
This is a question many sellers don’t think about asking. As the first seller, you should report directly to the early executive — ideally the founder — who was doing the “founder led sales.” Many times this is the CEO. This individual should have continued involvement in the sales process. It should concern you if the founder says or suggests they want to step back from sales entirely.
How many customers have pre-existing relationships with the founder or team?
Inevitably, some of a start-up’s first deals will come from within the founder’s network or a relationship with an early stage employee. This is a great way for early stage companies to test and probe product-market fit. But if all of the start-up’s first deals have come from pre-existing relationships, that should make you wonder about their viability. Preferably, only one or two deals should come from pre-existing relationships while the vast majority should not.
What kind of sales technology is in place now?
Start-ups are known for bootstrapping and hacks. But you don’t want to come into an opportunity and find all your prospect data is only in spreadsheets. Make sure they have a CRM in place, at least, possibly supported by contact data and call intelligence tools. In the early days, these are nice-to-haves but costs are coming down, so there should be a bit of budget to carve off for a couple productivity tools. Anything beyond that is a bonus (and means you can add the tools you prefer).
Who will support the operations/data side of things?
The first account executive will be hired before the first operations person, so expect the answer to be some combination of yourself and the founder or another existing key employee. Operations and data shouldn’t all be on you, but you’ll play an important role here until the company needs a full-time ops hire. Frankly, if you have no operational chops and don’t have the ability to learn the systems, how they work, and the ability to do some lightweight administrative work with them, you may want to wait until the team is a bit more established.
Where did the initial set of deals come from?
Almost as important as how many deals have closed so far is knowing where they came from. Ideally, the initial deals have been driven by a combination of market, network, or social awareness. If there are organically driven deals from social awareness, that is a great sight, particularly if those deals did not have some pre-existing relationship with an early employee. It’ll be your job to make that repeatable.
Is there a draft compensation plan? (i.e., How is success defined?)
Some founders will have a formal comp plan written out and others won’t. If not, the founder needs to be able to explain their philosophy around sales compensation. Also, you should have them commit to having a written plan completed within the first two weeks of your start date. The variable component cannot be an afterthought. (Read that sentence again.) The longer that goes undefined, the worse your situation gets. Remember, the founder may have never done this before, so it’s more important that they have thoughts on it. Then you can actually help them draft a plan in some cases that can be mutually beneficial. (RepVue’s salary information can help.)
What pain does the product solve?
The founder needs to be able to clearly explain the value proposition. This seems obvious, but you’d be surprised by how some founders have difficulty explaining who their product is for and why they would want it. If the founder can’t articulate that, you’re not going to be able to either. No product sells itself. Products meet a need for people with that need. Beware of founders that just think the fish will all jump in the boat.
What features are on the roadmap to expand the addressable market?
This is a great question to help you understand the company’s long-term plans and prospects. The answer should allow you to immediately understand how closely the roadmap aligns with the needs of customers and prospects. Even if the roadmap only accounts for the next quarter or two, you’ll get a sense for the founder’s ultimate vision and whether you want to be part of it.
BONUS! What happens to the deals after they close? Is there an onboarding process and/or customer success team? Who leads that, and how are you thinking about renewals and NRR?
The first AE at a start-up is there to close deals, but they might also be responsible for onboarding, troubleshooting, and retaining customers. Remember, the company may not have yet hit a renewal cycle for their earliest deals. This isn’t a dealbreaker, by any means, but it is good to know before taking on the role. Whether these responsibilities will fall to the AE or someone else on the team, the founder needs to have thought it through and be able to share it with you.
Doing Your Research is Not Just for Start-up Roles
An opportunity to be the first seller at a start-up is one that should be thoroughly vetted. Particularly when the risk of failure is amplified based on a lack of operational history. But it’s critical to fully vet any opportunity, at a start-up or in an established sales org.
Assess the culture, the compensation structure. Talk to potential customers, current sellers, and former employees if you can. RepVue has data on thousands of companies and their sales orgs. A newer start-up may not have any reviews yet, but you can compare what you know with other organizations that are.