Wanting to move away from founder-led sales? Avoid these common mistakes

Only 19% of tech startups get to Series A, and only 0.7% of tech startups get from Seed to Series C. If you’re trying to avoid this sorry situation as a tech founder yourself, you’re no doubt asking, why is this the reality, and what can I do about it??

An additional statistic worth noting is that 67% of tech CEOs don’t come from a sales and marketing background. This makes a lot of sense, if you’re founding a tech startup, you’re highly likely to have tech or product experience. I founded Sales for Startups in 2017 because I believed that a lack of sales experience shouldn’t hold great tech startups back from being successful.?

A lot of our clients have raised around ￡1m or more and are heading for Series A, but many of them as yet haven’t implemented a proper sales function. In effect, they’ve been handling the sales themselves, but are stretched thin and without the experience, they recognise the need to move away from founder-led sales to a more team-led approach.?

Here are some of the mistakes to avoid when making the move away from founder-led sales.

Timing is everything?

The first instinct for many founders at this point is to go away and hire someone to do it for them. Although this seems like a sound move, there’s many reasons why 73% of VP of Sales in tech companies leave within 12 months.?

Founders have a tendency to think of salespeople as ready to go upon hire - you give your new salesperson a target, point them towards your target audience and off they go. The reality is that if you as the founder have only sold your solution a few times, you probably don’t have the experience and playbook yet to enable your new salesperson.?

In technology, employee turnover is at a record high hitting almost 35% last year. 67% of departures from salespeople are voluntary, with over two thirds citing a lack of leadership or the incompetence of leadership as their core reason for leaving. Hiring mistakes are expensive, so need to be careful who we hire (SiriusDecisions).?

Our recommendation isn’t that you shouldn’t hire a VP of Sales, it’s a question of when you hire which is so crucial, and as a business and founder you have to be ready for that key hire, typically just at the point of raising Series A.?

Don’t detach from the outcome

To be effective at building a sales function, you really need to understand your market, and to do that you need to get real product feedback from your audience that can drive iterations.

We encourage founders to stay engaged in the sales process initially so they’re getting live feedback from potential clients and feeding it back into the product team - founders in the early stages are the glue between the market and product development.?

Really and truly making sure that as a founder you have nailed your sales proposition will help you in almost every aspect of developing your business, and it also means that when you do get to hiring a VP of Sales, you’re hiring one with the type of sales experience you need to drive up revenues in your business.?

Beware of hiring from your network?

Often when people try to move from founder-led sales, they go and find people within their network. It’s perfectly understandable for founders to want to surround themselves with people they trust, but when this approach goes wrong the impact can be significant.?

When you’re hiring a friend or someone you know, it’s possible that their skillset might not be quite right, but the relationship is overriding their competence as a sales professional. Even with the best go to market strategy, it’s incredibly difficult to make a great team from poor ingredients.?

What’s more, the structure of the team is really important, and you need to be clear both what this role is and is NOT doing for you. With someone from within your network or a friend, this line can become blurry, and you risk burning both your relationship and your revenues when things go wrong. Additionally, compensation can be a challenging conversation for both sides.

Sales for Startups frees tech startups from founder reliance, helping our clients develop both the playbook, their proposition and the team that can be relied upon for consistent sales, marketing and customer success.