Does this situation sound familiar?
Your product is about to go into beta. Your employees are all engineers or product people or designers. You, the CEO, are the lone business person. You know that you have to figure out monetization (you’ve been telling people your model will be “freemium” but you haven’t really done any work on nailing down the details). You’re not sure what your pricing structure should be. You might have a pre-beta list of email addresses you’ve collected from a sign-up page you drove people to. But, there are lots of things you don’t know and need to know:
- What’s the profile of a typical customer and how do I source and qualify them?
- Who to sell to (product manager? head of marketing? head of sales?)
- What to charge and what pricing tiers to offer?
- How long does it take to make a sale and what’s the ratio of leads/sales?
Basically, you don’t know squat about selling your product and what it’s really worth to the market.
The natural inclination is to hire a salesperson to “figure this out”. But this is where a critical mistake is often made, and I want to talk about a *generalization* I like to make about sales people when making hiring decisions.
I believe that there are two kinds of salespeople: Expeditionary Salespeople and Process-Oriented Salespeople. (In general, I’m skeptical of people who divide the world into two buckets, so I understand any skepticism that comes from my doing just that.)
They are both extremely valuable. But, they are valuable at very different times in your company’s life cycle. Hire one type at the wrong time and you’re almost certainly going to part ways or radically undershoot your potential.
Expeditionary sales folks are fantastic in early, ambiguous situations. They don’t mind selling an incomplete product. They relish in calling nearly anyone that they think might have a need for what you’ve built and in learning about product/market fit. The great ones don’t just report back to engineering “the customer wants X, please build” but instead use judgment and knowledge about what you’ve already built to map to what the customer is trying to do (but not necessarily asking for). They can make up pricing on the fly if necessary. In short, they almost look a bit like business development folks, but the key difference is that they thrive on the game of getting people to open their wallet and spend.
Let me give you an example. At JotSpot, our first sales guy was named Eugene Levitsky. I hired Eugene right about the time we were going beta. We had 15,000 email addresses of people who were interested in getting access to our service when it was ready. We suspected we were going to be a freemium offering, but we had no pricing structures in place. We had let perhaps 100 people use what we had built.
Eugene dove right in. He called on our first 100 users. He sussed out what they were using it for. He sensed when it was being used for something critical and started asking people for money (despite the product being in beta and us having no published pricing). He tested lots of different prices on the fly. He tried various pitches to convince people that what we were doing was valuable. In short, he made a ton of things up, he explored a huge range of prices and pitches, and he zeroed in on what worked. In the sales world, he was doing the equivalent of the rapid prototyping that great product organizations do. He was perfect for that stage of our business.
So, what are expeditionary sales guys bad at? Well, in general, they like *new* challenges. When something feels figured out, they get bored. They have greater resistance to traditional sales quotas and targets (but they know they come with the territory). They certainly don’t like formal processes because they feel “too rigid”. And, for the most part, they’re not thinking of how to build a massive sales “machine” with repeatable methods for identifying and qualifying customers, checklist-driven process for engaging with customers, and banging the phones or email queues to drive sales.
A time for change
There comes a time in the mid-life of your sales development, where you, the CEO, need to help transition from expeditionary sales to process-oriented sales. I’ve heard of the rare expeditionary sales person who can also take what they’re learning in the rough-and-tumble early days of selling and turn it into a more checklist-oriented, scalable sales process. But, I myself have not seen it. Most likely, you, the CEO, will have to pick the brain of the expeditionary sales person, and take what they’ve learned to craft a more repeatable, scalable, process-driven sales method.
And, you’ll likely have to hire a new head of sales.
(For those of you wondering what happened to Eugene, Google bought JotSpot before we were ready to move to a process-oriented approach.)
Process-oriented sales person
At this stage in your company’s life, you probably have a product that fits the market reasonably well. But, your sales costs are too high, your process feels sloppy and unpredictable, and the sales cycle is too long. In short, you need someone who thrives not on figuring out new things, but on optimizing the process in front of them. You want someone that truly enjoys building a sales *machine*.
Process-oriented sales folks love repeatable, scalable methods. They love efficiency. They track their teams with detailed metrics. They implement software systems. They crave predictable growth. They think about building teams and managing groups of people to a target. And they come from highly process oriented sales cultures like Oracle, IBM or SAP.
So, where do things go wrong? Things get bad in a two primary scenarios
1) You bring in a process-oriented salesperson early in your company’s life. This goes very badly and there are several symptoms. The person expects the sales “script” to be figured out. They expect you to know the position/profile of the person you’re selling to. Engineering is constantly upset because sales keeps saying that they *would* be selling if only the product had some set of features that it doesn’t currently have (expeditionary guys are masters of selling what you’ve got, even if it’s not a perfect fit, instead of selling futures). This usually ends with the salesperson leaving.
2) You hang on too long to an expeditionary head of sales when it’s time to move to a process-oriented approach. This is typically characterized by the CEO feeling like there’s not enough predictability in the business. There’s resistance to the CEO’s questions about finding patterns for the repeatable profile of the people you’re selling to, and the timeline of leads to prospects to sales. The CEO wants greater reporting and visibility into the pipeline. This scenario should end in bringing in a new head of sales and moving the expeditionary person onto a special projects team (of one or two) that tackles the new products and initiatives that the process-oriented folks don’t know how to sell.
So, when you think about sales, think about these two types of salespeople and make sure you hire the right one at the right time.
For every thing, there is a season.
For every stage, there is a salesperson.