Hiring Your Startup's First SDR

So you’re still conducting founder led sales or perhaps you’ve hired your first account executive.? You’ve heard that maybe you should hire an SDR next.

This post is intended to:?

• Help you determine whether you should pursue hiring an SDR
• Outline the role than an early stage SDR plays in a startup
• Detail how an early stage SDR differs from candidates from larger companies
• Give you some high level selection criteria and general onboarding guidance for your first SDR hire
• Show you how early stage SDRs are measured and compensated
• Sketch out a general SDR outreach motion and handoff process

Should I Hire an SDR?

Given that you’re conducting the majority of your sales process as a founder, let’s start by outlining when you shouldn’t hire an SDR:

• You or your sales person cannot handle additional new sales meetings.
• You are still exploring the idea maze and don’t have a well defined ICP or target market
• You do not have a repeatable sales process
• You do not have bandwidth to manage a more junior employee

An SDR is a force multiplier that allows you and your sellers to focus more of their time on higher marginal value activities, deeper in the sales funnel.? If you don’t have a well defined ICP or repeatable sales process, hiring an SDR runs the risk of crowding your calendars with meetings that have no hope of converting to customers.? You’re running faster, but in the wrong direction.

Alternately, if you find that you’re having good initial PMF and have a good idea of what your ideal customer profile is, an SDR could potentially enable you to run as many or potentially more, highly qualified initial customer meetings, while giving you back some of the time you dedicate to prospecting and cold outreach.

What an Early Stage SDR Does?

Regardless of firm size, an SDR is usually responsible for:

• Prospecting into (cold or warm) target accounts
• Identifying and connecting with contacts in said accounts who can likely benefit from your solution
• Getting a contact who has the power to get a deal done, agree that you might be able to alleviate some of their problems
• Arranging for them to take a meeting with your or your sales person accordingly
• Doing this between 15 and 30 times per quarter

An SDR at an early stage company can offer the additional value of:

• Providing a critical feedback loop around your PMF
• Honing your ICP and exploring new customer use cases
• Taking on some chief-of-staff type functions within your sales motion

Lastly, early or initial SDR hires don’t suffer as much from the principal-agent type issues that plague large sales organizations.? “Gaming the plan,” has more severe social consequences when you’re setting meetings for the CEO.

Ideal Candidate Profile

A typical SDR journey for a large tech company goes as follows:

• One to two years after graduating from university with a bachelor’s degree, our candidate is hired for an outbound SDR role.
• Once in role, they are provided with messaging scripts, target accounts/territories/verticals, and thousands of dollars in monthly spend in the form of sales automation, prospecting, and customer intent software seats.
• Sometime in their first month, they attend a week-long in person company bootcamp, learning all there is to know about their company, their product, the competitive landscape, and how they alleviate pain for their prospective customers.
• After coming off of their one to three month ramping period, they hit their peak performance ceiling around month seven and hover around that productivity mark until month 14.
• Fortunately for them, our SDR is part of the 50-80% of SDRs who meet or exceed quota and they are selected for promotion to the SMB account executive team.

You, dear founder, have none of this and you should approach the way you select for your SDRs accordingly. ?Resist the urge of hiring SDRs from large companies—the agency and initiative your startup needs, was managed out of them during their 12 years of schooling and 4 years of undergraduate education and has not returned by coloring inside the lines at BigCo.

Instead, it’s crucial that you as a start-up leader select for potential over experience when hiring your first SDR.? Ideally, you hire an SDR who has thrived at another early stage startup, but regardless of background, we recommend you select for candidates who exhibit strength in the following areas:

• Drive and Autonomy
• Conscientiousness
• Extroversion
• Growth Mentality
• Curiosity

Selecting for Your First SDR?

Now that you’ve decided to open the job req., you’ve drafted a job description and you’ve pushed the job to your careers page and perhaps LinkedIn.

You have some candidates who’ve expressed interest in the role, how should you conduct the interview process?

We suggest you break the process into the following steps:?

1. Resume Review?
2. Phone Screen
3. Work Sample/Exercise
4. Hiring Manager Interview
5. CEO (or panel) Interview
6. Reference Checks

Keep screens and initial interviews to 30 minutes—this is not an executive hire or co-founder search and you should be able to get the majority of what you need from a live conversation in less time than a traditional 45 or 60 minute interview.

Decide ahead of time which attributes you’re trying to measure during each phase and adopt a scoring system to more objectively compare candidates.? For a given area of measure, we recommend the framework of “Strong Yes, Weak Yes, Weak No, Strong No” or a 1-4 scale.

Lastly, if you’re comfortable using them, mental aptitude and sales personality assessments can be powerful tools in helping you select for the best early stage SDR possible.

Onboarding

You’ve selected a strong SDR candidate who you believe will be a great fit for your company and mission.

How should you compensate and incentivize them and how should you onboard them?

Compensation Considerations

When it comes to building this comp plan, you will likely need to offer more in TC than established companies in order to get recent graduates to take a risk on your company.??

Additionally, SDRs will be much less likely than other early hires to value any equity you offer.? Cash targets will be their primary focus and you can true up their equity if they thrive in role or get promoted.

SDR compensation has been moving away from the historical norm of a 50:50 base/variable compensation ratio, to the more frequent 60:40 or even 70:30 ratio.? Since this is an early stage role, your SDR will be wearing a lot more hats than they would be at a larger company.? If you find that you’re frequently having them help the business in ways that are outside their core job description, consider giving them a larger base pay percentage to reflect this wider remit.?

Performance Targets

Traditionally, SDRs are compensated on one or a mix of the following categories:

• MeetingsOptions include: scheduled, held, or “successful” with met qualification criteria.
• OpportunitiesOptions include: created, accepted, or advanced to a given opportunity stage.
• Closed Won BusinessAs a lagging indicator, this is usually leveraged as a quality incentive and is generally a small percentage of the deal (1%, a nominal amount, or capped).You may want to make more use of this lever if you have an especially fast time-to-close and/or a particularly small average deal size.

What’s right for your business will depend on multiple factors, including:?

• Your average deal size
• Whether you’re selling to SMB, mid-market, or enterprise prospects
• Buyer type
• Your opportunity close rates
• Your TAM
• You or your seller’s capacity to engage with more new business?

Visualize your buyer journey or customer funnel, from marketing and cold outreach through closed won business.? You should seek to compensate your SDR for helping a prospect to a given stage in that journey which balances generating the most value for your business with what the SDR actually has control over.

The target categories and quantities you set initially likely won’t be right for your business on the first pass.? Start by benchmarking what your or your seller are able to do in terms of prospecting, meetings, and opportunity creation and scale those numbers to a dedicated full time role.? Give yourself the flexibility to update your SDR’s targets as you complete some feedback loops, run into challenges, or see more success than expected.

Resist the urge to create an overfitted comp plan with too many variables and instead limit yourself to one primary target variable, with perhaps a secondary target that rewards quality behaviors.

Enablement

Even if you’ve successfully hired a driven and self-guided employee, they’ll still need some direction from you and your team.

Enablement plans for large SDR organizations can be expansive and cover the entire SDR lifecycle. For your early stage company, we’d encourage you to think about the the following four categories when bringing your new SDR up to speed:

1. Company SpecificsProductCompetitive landscapeYour unique value proposition(s)ICP
2. Go-to-Market StrategyOutreach messagingObjection handlingCall and email best practicesTerritory/vertical and customer persona selection
3. OperationsQualification processHandoff processDocumentation requirements
4. Sales Tooling/Techstack

You don’t need to have an entire plan fleshed out before bringing your SDR on board, instead partner with your SDR and make them a co-owner in creating and completing their enablement journey.

Throughout this process, you should be setting your SDR up to make an impact on your business as soon as possible.? The feedback loops SDRs get from shadowing sales calls, listening to current customers, and directly engaging with prospects over the phone and at live events will help get them up to speed faster than any static documentation or recordings.

SDR Outreach Playbook

In time, you’ll have a relatively comprehensive SDR playbook (whether it’s fully documented or not), but for now, you’ll want to make sure your SDR is empowered with the basics:

• Target account and prospect selection
• Email, phone, and voicemail best practices
• Effective outreach sequence/cadence structure

Account and Prospect Selection

Early stage SDRs frequently help with building account lists and selecting target contacts, but it’s crucial that you or your seller review and guide their selections.? SDRs rarely understand how buying occurs within organizations, don’t appreciate who actually has the power to get a deal done within a company, and frequently fall into the mentality of “they could possibly buy from us,” when we instead want the more pragmatic approach of “is it likely that they could buy from us?”

The best partnerships between SDRs and sellers or founders involve frequent daily collaboration on target account lists, progress updates around contact engagement and next steps, and the sharing of objections and bottlenecks.

Be deliberate with the titles and attributes that you want your SDR to pursue.? A good thought experiment is to challenge them to think like an account executive.? You may be paying them off of a qualified meeting, but would an account executive set up the same meeting, knowing what the SDR does (or doesn’t) know?

Outreach Best Practices

• EmailKeep your emails “above the fold,” by limiting them to 3-5 sentences.??If you have more to say, reserve it for future emails to the prospect.Subject lines—there’s lots of good advice and data on subject line composition online, but in general, keep it brief and consider asking a question.Do not send the same email to multiple prospects within the business at once (or non-customized outreach more generally).??Any guilt or responsibility they might feel about responding to you disappears if they think of you as a robot and not as a real person potentially deserving of a response.??Avoid general statisticsExecutives don’t believe your numbers and you’re just wasting space in your email.? Instead use specific customer anecdotes if you can.Do not resort to gimmicks.??You might get a laugh and maybe even an email forward, but you still won’t likely get a response.Do not ever say something to the effect of “this is my last outreach.”You’re merely making a liar of your future self.Think about the authentic emails you get from real people who you engage with.? What do they typically have in common?They’re briefThey have a relevant observationThey have an effective question or call to actionYou should strive to compose your prospecting emails like this as well
• CallsCall with the actual intent of reaching your prospectIf your one goal this week was to reach a particular prospect by phone, you would act a lot differently than if you were merely trying to place another call.Respect your prospect’s timeGet right to the point of why you’re callingBring a compelling observation or event as to why you’re trying to connect with them nowLet them know the 2-3 ways you typically alleviate pain for someone with a role like theirs and ask for the right to explore further.Keep your phone number consistentIf you want to use your own number, an area code for your company’s HQ or the area code for the prospect’s HQ, fine, but changing your phone mask or proxy every time you try to reach a prospect is irritating for them.
• VoicemailsDO leave voicemails.??As we’ve moved away from desk phones, many SDRs have stopped leaving voicemails entirely, don’t do this.Instead use a brief voicemail (30 seconds or less) to call attention to emails and InMails you’ve already sent the prospect.

Sequence Structure Best Practices

There are lots of good examples for effective SDR outreach sequences online.? The best ones generally have the following in common:

• They are spread out across 2-4 weeks
• They are composed of 8-13 calls, emails, and other tasks like InMails, LinkedIn connections, and sometimes video steps.
• They strike a balance between reusable structure/value propositions and unique observations you’ve made after researching the prospect and company.
• They strive to add value or bring new observations to each step in the sequence.
• They have a definitive call to action or request an introduction to someone who may better benefit from a partnership discussion.?

Handoff Process

Qualification

The initial meeting qualification process you require for your SDR can be modest or relatively flexible, but in time, you’ll want to have some structure in place to make the most of the meeting for both you or your seller and the prospective customer.

Organizations can vary from having very firm minimum qualification requirements, employ an elaboration scoring system, or have something as simple as only requiring a satisfactory title at target company.

The most frequently used qualification criteria is BANT:

• Budget?Does the prospect have the financial resources to purchase the solution or product?
• Authority?Is the individual an influencer or decision-maker in the buying process?
• NeedDoes the prospect have a clear business need or pain point that the product or solution addresses?
• TimingWhen is the prospect planning to make a purchase or implement a solution?

Other companies choose to forego budget and timing for an initial meeting.? Additionally, SDR organizations frequently document or require qualification around the following:

• Firmographic Criteria:Company SizeDoes the company fall within the target size (e.g., number of employees, revenue, or number of a specific role like software engineers) for the product or solution?IndustryIs the company in a target industry or sector?LocationIs the company located in a geographic region the business serves?
• Technographic CriteriaWhat technologies or platforms does the prospect currently use that might be relevant to the product or solution?
• Current SolutionsWhat is the prospect currently using to address the problem or need?Are they using a competitor's product? If so, are they looking to switch?Are they facing any challenges with their current solution?
• Buying ProcessHow does the company typically evaluate and buy solutions?Are there any anticipated obstacles in their buying process?

Scheduling

Establish with your SDR how you would like prospect meetings to be set up and what role they play in helping you or your sales person prepare for the meeting.

Being asked the same string of qualification questions by both an SDR and a sales person is a poor experience for your prospect.? If you require stringent notes from your SDR, respect the prospect’s time and ensure you or your seller read and reference them.

When thinking about the scheduling process, put yourself in your SDR’s shoes.? How do they know when you or your seller’s calendars are free for a new business meeting?? Are the calendars kept up to date?? Do they know when you’re traveling or have higher priorities than taking new meetings?

Lastly, workshop an ideal scheduling workflow with your SDR and be sure to update or iterate this process to best serve your prospects and needs of the business.

Follow up

Lastly, consider whether it would be valuable to have an SDR help manage portions of the meeting follow up process.? If this constitutes a sizable part of their workflow, consider incentivizing them for their work or including this as part of their MBOs.

In Conclusion

Hopefully this post has helped you to better understand whether an SDR could benefit your sales motion and what processes and frameworks you’ll likely need to implement for a company at your scale.

If you want to go deeper on any of these topics or would like additional help around standing up an SDR organization for your team, let’s get in touch!