Day 323 – Tesla’s And Cufflinks

I was pondering today about building a sales force. I have done this more times than I care to count, not all successfully. Inevitably, when you talk about building a sales force you start trying to figure out what role that person will fill. The desire of most executives is to push all the customer engagement work onto the first sales hire. This is a mistake on many levels; the biggest issue as you start out is that most people have a completely flawed view of what a salesperson really is. The job turns into a catchall for all the difficult things associated with picking up and working through initial client acquisition. The people who thrive in that situation are usually the opposite of the people you think you need. We always think we need a hungry, aggressive, quick minded person, a task slayer by night and a whale hunter by day. What you have really described is a founder, which, if you are interested in this article, is probably you. You are the one you are seeking, and your desire to find someone to do it for you is nothing short of work avoidance. You are trying to avoid the hard part of the business, customer acquisition. The reality is you are avoiding the most important part of the business, the part where you learn what actually attracts customers to your offering and why they will pay you money for your service.

Is a salesperson what you need. Perhaps not; perhaps you just need a swift kick in the ass for trying to avoid the most important responsibility you have. There are some telltale signs that a salesperson might be needed; in most of my encounters with early stage situations these are hardly ever present. We can go through a few. The first and most important is deal size, the frequency of deals, and a sales cycle that is conducive to the compensation expectations you are hiring for. This is a simple consideration for the most part. Most sales compensation plans for early companies are usually fifty fifty scenarios. The type of salespeople you will attract at this level want some guarantees, and they also want upside on their efforts. Some people latch onto the pipe dream that they will find salespeople willing to work mostly at risk, but this animal does not exist in a business that does not have a demonstrable pipeline. I have only seen this when the sale is fast, easy to deliver, and the return and payout are rapid. Once again, the person who is taking the risk is not your salesperson, it is you. That is why you are called an entrepreneur and they are called a salesperson. Do not get it twisted, as my fifteen year old likes to say to me when I ask her to do her brother’s chore of taking out the garbage.

If you have business coming in and you can predict the average sales cycle, then you are getting closer to your first sales hire. This does not mean estimating or guessing what your sales cycle is; it means actually knowing. You have had enough sales to calculate a predictive average where you can take a trimmed mean. You have enough closed deals to track the time from when they started to when they closed, and you can identify the amount of revenue charged and earned. You can then remove the highest and lowest numbers so the mean is more accurate, because you are dealing with the most common scenario that a salesperson will encounter. You would be surprised how many of us startup people develop amnesia and suddenly think that salespeople are the key to growing the business. Nope. Salespeople help you scale an already growing business. Once again, do not get it twisted.

Now, one thing a business owner does have right is that there are multiple aspects of sales as a practice. There is customer acquisition, closing new business, customer expansion, and customer retention. Business owners are correct in thinking that sales includes all of those things. Some will argue that these are all separate and unique processes and need their own workflow and staffing. This is true in a mature company that has a pipeline of sales and a burden to manage each of those categories. A business owner instinctively knows that all of these categories will probably need to be handled by only a few people, and there most certainly will not be any departments created. However, they then proceed to think they can hire a cheap intern to do what they like to call “biz dev,” and lump all this into that category. Putting it all into one category is not the problem; relying on an inexperienced person to juggle all of that is the problem.

This leads me to the title of this blog. If you do indeed have a demonstrable pipeline that is measurable, and the results are predictable, then you are probably ready to scale, and that means hiring a salesperson. So who should be the first target candidate. This is a haunting question that has kept many of us up at night, but I will tell you what I think the right answer is. Teslas and cufflinks. You think you need a technical person who can match your prowess with the product or service. You think you need a fearless cold caller who will crash through any gatekeeper. You think you need a gorilla marketer with a social media follower count in the millions. You think you need a seasoned veteran with a pedigree of giant whales mounted in their proverbial dining hall. You need none of that. What you need is someone who does not care about your priorities. You need someone who will not answer your emails or respond to your task delegation. Someone who does not care about operational deficiency or what your PowerPoints look like. You do not want to see this person; you do not want them in the office before you get there. All the old concepts of the white bible carrying, QBR deck reading, clean shaven IBM sales persona are long dead. What you need is the person who bought the latest, greatest, most expensive vehicle, blows up your expense accounts, and has almost zero tolerance for talking to you. When you see them, they are wearing no suit jacket, but they have a nice watch and cuff links with the one thousand seven hundred dollar Stefano Ricci to go with it.

By the way, just so you know. I do not like these people. I have no fear they will know I said that, because they would never read or listen to this blog. They do not have time for silly things like reading a blog. They do not have time for much of anything. Life is hectic when you are living on your employer’s expense account. Everything I said is making any early founder sweat right now. This sounds like a disaster waiting to happen, and there are times when it is. When you hire Teslas and cufflinks there is a good chance that you will get a bad one. My batting average is .500 on this. You cannot get attached to them; you need to pull the trigger on their employment fast. Do not worry, you are not hurting their feelings at all. This is just part of the job for them. Getting fired is a way of life, and they are used to it. They do not like it, but they accept it as part of the job. They are not worried, because they are relationship people. They peddle in relationships, and that is what you are hiring. These are high-income people who live paycheck to paycheck and way above their means. They lease everything, and filing bankruptcy is not a matter of if, but when can I next? Now you have to ask yourself a very important question. Do I need relationships to grow my business or not?

This is the big question. Most entrepreneurs grow their business because of their relationships. When those tap out, so does their business. They fail not because they are bad leaders, but because they exceeded the capacity of their personal network and never built a machine to sustain sales growth without them. So here is the question. Do you need Teslas and cufflinks to grow. For some businesses this is an absolute yes, and if that is the case, do not hesitate. Hire two. One will fail; the other will bring you your next 10 to 20 relationships that you need to fuel your next stage of growth. If your business does not need the relationship, then it is most likely a lower value proposition with an easier entry point, and if that is the case, then you need to hire 20 Corollas and Oxford shirts. You have to get this right; you need to understand this distinction. If you do not, then you are going to fail. Do not hire prematurely. You must know your sales cycle; you have to understand that. Once you do, you should know the type of salesperson you need and roughly how many, because you know what your pipeline is. Whatever that number is, multiply it by two, because even the best in business rarely bat above .500