Navigating the First Sales Hire: A Critical Choice for Startups

In last week's Harvard course on Entrepreneurship (ES 94), I taught a case study on Drift, a Salesloft company . Drift is a B2B SaaS software company founded by David Cancel , a seasoned entrepreneur with a strong track record of success. He has established multiple software companies and achieved notable exits. Drift was an early innovator in providing websites with a plugin that allows users to chat online with sales representatives. The case study examines Drift when it was an early-stage startup offering a robust freemium product used by tens of thousands of companies. However, the startup faced a significant challenge: users were not upgrading to the paid version, which impacted its revenue plan. This is a common issue for B2B SaaS startups with a freemium business model, making the case study particularly relevant.

In class, we explored how to determine which features to include in a paid tier versus a free tier, analyzing both consumer companies like Spotify and B2B companies such as Slack and Amazon Web Services. I mentioned that some of my companies are currently facing this challenge, including Queue , HouseWhisper , and heyLibby.ai . These freemium tech products must carefully decide where the free feature set ends and the paid one begins.

However, the heart of the case study is the decision about who to hire as the company's first salesperson. This choice is crucial not only for generating revenue and shaping the sales team's culture, but also for providing valuable customer feedback to the product team. The case study presents three potential candidates Drift was considering for the role: an experienced sales leader who has managed large teams, a high-performing individual contributor who consistently exceeds targets, and a versatile salesperson with practical product strategy experience.

I won’t disclose the case study's conclusion, as I plan to teach it in the future. Nonetheless, selecting the right first sales hire is critical, and the case study showcases the strengths and weaknesses of each candidate. Which profile would you choose for your startup's first sales hire?