How to make your first sales hire: A guide for SaaS founders

First things first, forget all those things you thought were ‘necessary’ when making your first sales hire. The first mistake a lot of SaaS founders do is to trust that a simple Linkedin post/Twitter thread etc is going to bring the perfect sales candidate right to their door when instead you should be looking at the following a few months in advance:

1. Assess the skills possessed by yourself and other founders.
2. Evaluate the effectiveness of your existing process.
3. Determine the areas where you require the most assistance.

Whether you’re hiring a salesperson because you need to close customers faster or because you need the first hire to build the foundation, the right SaaS sales hire will be someone who is planning to stay long-term enough to see the business grow and scale. You can read more about out how to transition from founder-led sales to hiring your first AE.

Rule #1:

If your goal is to build your sales strategy, we highly recommend going for someone who is experienced and has proof of hitting revenue targets. Most importantly, look for someone who has the will to build from scratch, knowing they don’t have all the resources right away but using what is given to build a strong process.

Rule#2:

If your potential sales hire talks a lot about available budget and making more hires, it only means that they will probably invest money in resources that your company probably doesn’t need at an early stage. Look for someone willing to work a little bit harder initially until a strong foundation is built before they start spending and hiring.

Rule #3:

At the interview notice how they respond when you ask about the last time they learned something new on their accord and focus indicators that show how curious they are about the company, the job, the industry, etc.

Rule #4:

Ask follow-through questions about how collaborative they were on projects and expect them to provide a detailed account of their most recent cross-functional project and how they actively contributed to its success. Ask them to give examples of how they leveraged key stakeholders within your organization to drive deals to completion and to demonstrate their track record of successfully bringing together diverse teams, even when they don’t have direct authority, to achieve a common goal.

Rule #5:

To succeed in their role, initial sales hires must go beyond surface-level indicators like quotas and delve into the underlying factors that impact performance. Challenge them to discuss a difficult decision they recently made by giving a thorough explanation of the analytical process they employed. Inquire about their ability to effectively use data in their job, expecting them to provide specific examples of how they leverage data to inform their decision-making.

Rule #6:

Dig deep into their level of autonomy, motivation, and reliability. Ask pointed questions about their reaction when they identify issues in other departments within the organization and ask for an example about a time when they voluntarily stepped up to tackle a significant task outside their area of responsibility. Additionally, challenge them to articulate their vision of ownership within a sales role.

Rule #7:

Look for candidates with a proven ability to thrive in fast-paced, ever-changing startup environments. Raise the bar by posing tough questions that assess their capacity to handle multiple priorities and navigate unpredictable circumstances. Challenge them to provide concrete examples of how they have successfully adapted to change in the past, expecting detailed insights into their adaptability and resilience.

Candidates coming from different stages will have different sets of skills.

Our recommendation is to find someone who has current or past experience working at a similar-stage startup as yours. Those kinds of candidates will have a better understanding of where your company is at and how your processes work.

Someone from a bigger company might struggle with getting their hands dirty, while someone from an earlier-stage company might not have the skills needed for guiding the scaling process down the line.

Review References

At this crucial stage, it’s essential to find someone who has a proven track record of delivering results. Taking a chance on an untested candidate can be too risky when you’re aiming to establish a robust sales structure that will drive growth for the next few years. As part of your hiring process, make it a priority to obtain at least two references from each qualified candidate. This step will provide valuable insights and help ensure that you’re making the right hiring decision.

Hiring True Leaders

Take a good look at their experience handling budgets and managing headcount. If you’re hiring your first sales leader, it’s important to prioritize finding someone who has some experience in choosing the right tech stack, making budget decisions, and hiring the right people. On the other hand, these skills may be less crucial if you’re hiring for an individual contributor role. However, if you do decide to bring in a true leader, be cautious not to focus too heavily on the strategic side of things. You don’t want to end up with someone more interested in gathering customer feedback and scaling over time rather than generating revenue right now.

Our recommendation is to seek out candidates who can demonstrate at least some of these skills. As your company grows, it will become invaluable. And hey, we probably don’t need to remind you that making hiring and budget mistakes can be pretty costly for early-stage founders. So choose your first sales hire wisely!

Look back at their previous roles

To gain a comprehensive understanding of whether someone would be the ideal fit for your sales team, it’s important to consider not only their current role but also their past couple of positions. Even if their current job doesn’t involve building the foundations, they may have previous experience in establishing efficient processes and building a lead generation engine from the ground up.

The most promising candidates possess relatively recent experience and are eager to put in the hard work and dedication, rather than solely focusing on strategy and management.

Determining the appropriate equity

Before finalizing any equity offer, it’s important to reflect on the role and type of hire you’re making. Will this individual serve as the guiding leader for your company’s future, or might you need to bring in a different sales leader later on? If this particular hire isn’t the long-term leader to lead you toward your goals, it may be prudent to reserve some equity for a future sales leader.

To gain further insights, we recommend seeking advice from other founders in your network, consulting with your venture capitalists. Also, reach out to a specialized recruiting company like Cognatio Solutions, that possesses knowledge of equity offers from various startups they collaborate with.