Readiness to Hire a Sales Leader

Key Insight

Before professionalizing a sales organization with dedicated management, a company must meet specific exit criteria: having a set of sellers successfully selling the solution at least as well as the founder. This signifies the achievement of getting one, two, or three sellers to a point of repeatability, which is a powerful developmental milestone for the company.

The importance of this criterion stems from the nature of SaaS sales organizations, which scale by 'scale out' – meaning revenue growth comes from more sellers closing more deals, rather than a small number of sellers magically securing increasingly larger deals more quickly. Proving the ability to successfully integrate new salespeople into the organization is momentous and highly attractive to investors, demonstrating the capacity to convert investment capital into productive sales personnel. These new salespeople can begin generating 30 thousand dollars, 50 thousand dollars, or 100 thousand dollars and up in monthly revenue within a few months.

Prematurely adding a sales leader before these conditions are met is a dangerous exercise. The founder, having 'cracked the code' on the repeatable sale, is the most expert person to teach others how to sell the solution. Entrusting this to an unproven sales leader creates a 'high risk game of telephone,' where information is relayed from founder to leader, then to new representatives, a process the company likely lacks time for. Without a sufficiently systematized sales process proven by a handful of successful reps, this move is likely a 'losing proposition' in almost all cases.