Lenny’s substack on product has over 600,000 subscribers (!) and Lenny asked us to join his podcast to talk about building a sales team — from the perspective of a product-first founder or exec.
It was a pretty strong conversation and we took a lot of our learnings over the years and focused on how to learn to do sales right if you come from a product-first background:
It’s good.
Per Lenny:
“In our conversation, we discuss:🔸 How long a founder should be doing sales
🔸 Signs it’s time to hire full-time salespeople
🔸 Why you need to hire two salespeople
🔸 How to comp your salespeople
🔸 How to interview salespeople
🔸 When to hire a VP of sales
🔸 How to avoid salespeople flaming out
🔸 How to scale your sales org
🔸 How to improve the relationship between your sales and product teams
🔸 Much more
Some key takeaways:
1. Hire your first salesperson when you have closed the first 10 customers and are spending more than 20% of your time on sales. Don’t be swayed solely by impressive resumes or acronyms; instead, seek out those individuals who you would personally buy your product from.
2. Instead of rushing to hire a VP early in the startup phase, wait until you have established a repeatable sales process and witnessed success with initial sales reps hitting quota. Hire a VP of Sales to help you scale from three sales reps to 300 reps.
3. Make sure your VP of Sales actually wants to sell, not just manage.
4. Prioritize the early success of sales reps by allowing them to keep 100% of their initial sales for the first three months. This provides an opportunity to assess their capabilities without immediate financial pressure.
5. If your salespeople are making substantial money, it’s a sign that the company is succeeding and the equity of both the reps and the founders is increasing in value. Therefore, don’t be discouraged if your sales team members are making significant earnings, as it correlates with the overall success and growth of the business.
6. Involve sales in product development to ensure alignment between customer needs and product roadmap. Initiate a weekly meeting between the VP of Sales and the VP of Product to discuss the budget allocation for feature requests and prioritize it. This regular interaction ensures that both teams are aligned on priorities and helps prevent last-minute disruptions.
7. Unlike building a product team, there is no efficiency when building a sales org: half of your headcount will be in sales at $10m, $50m, or $100m in revenue. This means building a sales org requires a different approach. Jason recommends that founders follow the “rule of eights” when scaling their sales org: 8 sales reps need a manager, 8 account or sales executives need a director, and a VP may have 8 senior reports.
8. A common mistake founders make is expecting to close the deal in the first or second meeting. Instead, you should play the long game. Ensure that there are clear next steps after every meeting, even if it’s doing a demo for someone else in the company. The best salespeople don’t throw a Hail Mary—they advance the ball into the red zone. Once you’re in the red zone, that’s when you ask for money and close the deal.”
Much more here. It was great!
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Jason Lemkin, Khareem Sudlow
