What should you do as the first sales hire?

How to maximize your odds of success as the first sales hire at a seed stage startup.

Author

Tim Geisenheimer
March 29, 2024

What should you do as the first sales hire?

You’ve gotten to $500k ARR and you’ve managed to hire your first awesome AE to start closing deals alongside the founders. Amazing! Now what should that first sales hire do to be successful? How can the founders best support that person? Let’s dive in to the first thing a new sales hire should do as they get started: the audit.

Quick note: these recommendations will skew more towards mid-market and enterprise sales. For SMB and more transactional motions, some of the advice may be less relevant. For example, in SMB you’ll often want to optimize for enabling purchases and “taking orders” more than doing consultative sales because you will often see a substantial inbound pipeline. That won’t always exist in the same way for mid-market and enterprise.

Perform an audit

The first thing you should do as the first sales hire is try to understand what’s led to that first ~$500k ARR. I view this as a full audit of the GTM motions that have gotten the company to this point. I think this exercise can help both the new sales hire as well as the founders learn more about their business as they get ready to scale to the Series A.

Some of the questions you should try to get an answer to include:

  • What’s our ideal customer profile (ICP)?

  • Who is the buyer? Who else is involved in making the decision? What are the common roles and titles that have influence?

  • What type of solution/ROI proposition is resonating the most? How are we most commonly winning the deals we win?

  • When we lose, why are we losing? What can we learn from that?

Let’s go into a bit more detail on each of these points.

ICP

There are many resources to help determine ICP. One of my favorite resources is from Lenny Rachitsky. Here’s his advice on determining your ICP:

To identify your own ICP, go through the list below and take your best guess at picking the three most unique and important characteristics of your potential ideal customer:

1. Company size (e.g. 1,000-5,000 employees)

2. Job title (e.g. engineering manager, social media manager)

3. Pain point you’re solving (e.g. compliance, internal transparency)

4. Company’s unique way of working (e.g. design-driven, operationally heavy)

5. Specific tech used (e.g. data warehouse, GitLab)

6. Type of business (e.g. B2B SaaS, e-commerce)

7. Price point (e.g. sells software that’s $10k ARR)

8. Geo (e.g. urban centers, LatAm)

9. A unique place the user spends time (e.g. Node.js community)

I often skew more towards a mix of company size, job title, type of business and tech used but each of these categories can be helpful.

Once you better understand your startup’s ICP, you can better narrow down your targeting for both inbound qualification if you have volume of self-serve sign ups or demo requests and, more often, outbound email, LinkedIn messaging and cold calling.

Who is the buyer?

This can be part of the ICP analysis. For example, you could be selling a devtool product that assists with engineering team productivity to early stage startups. That would likely mean that the best target for you would be the CTO/Co-Founder. In this example, you’d focus your outreach and messaging on CTOs because you’ve narrowed down both your ICP as well as your buyer persona.

Sometimes your ICP is targeted to a specific industry vertical (manufacturing, supply chain, financial services, etc) and then you are targeting a specific function within companies that are part of that vertical. For example you could sell a new accounting tool that supplements ERPs to supply chain companies. In this case, you’d want to target VP, Finance, controllers and other titles within those types of companies.

Working with the founders to answer these top two questions will greatly assist you as you get started!

Solution/ROI analysis

Once you’ve pinned down who you’re selling to, it’s critical to understand the value proposition of your product. I’m going to spend less time on this topic since it varies so much from product to product, but my recommendation is that you work with the founders to understand their current selling motion. Some key questions to ask include:

  • How do you present the product on a first call/demo?

  • What sales presentation are you using?

  • When you demo, what features/value propositions do you focus on the most?

  • Where do you often see “ah ha” moments in demos?

To aid in this, I recommend doing call recording/transcript reviews to see how the founders have pitched the product successfully over the last 5-10 closed won deals.

Loss Analysis

Even companies with the strongest PMF will lose some deals. Loss analysis can help you understand how to handle objections, which competitors or incumbents to keep closer track of and as you start selling, how to work closely with the founders to offer product roadmap feedback if you’re losing deals due to feature/integration gaps.

This isn’t quite as essential as the first three items, but it can certainly help guide you as you get started.

What comes next?

Ok, you’ve performed your audit, what now?! In future editions of First GTM Hire, I’ll be spending time on tactical and strategic advice on your first 30/60/90 days as a sales hire and how you can be successful. Hope you follow along! If you think this would help someone, please encourage them to subscribe.

I want to give credit to my friend Kevin Weatherman, a multiple time startup first sales hire and CRO who has put together an incredible resource walking through the things you should do to be successful in the role. DM him on Twitter to get access to his phenomenal Google Doc.

Three interesting articles

1. What is -1 to 0?

South Park Commons has what seems like a fantastic program for “pre-idea” founders to get some funding to find their initial idea. They wrote up their thesis here and I agree with a lot of their thinking about how important idea generation is prior to starting a company and building product.

2. Will “selling agents” start to eat into startup sales?

Tomasz Tunguz, a prominent enterprise software VC, opines about the trend of AI agents and their potential impact on sales. Many of the manual work tasks of sales will likely be performed by AI in the future. Things like prospecting contacts, adding those contacts to outbound sequences, updating CRM and following up will likely be greatly streamlined by AI.

Looking further out, it’s possible to imagine an AI agent answering the phone or a chat bot and being able to answer questions, provide a quote, provision a purchase order and facilitate a sales autonomously. My feeling is this will impact SMB sales and self-service products first and it will take some time before a $100k - $1m contract is negotiated by an AI, if that will ever happen.

Still, it’s in the best interest of both founders and sellers to track this trend and incorporate AI into their workflows for sales.

3. The Sales Learning Curve

This post from Mark Leslie at Sequoia from several years back is a goldmine for early stage founders. Here’s the opening of the post:

You’re a founder. You have a business plan and an initial product. You’re ready to go to market and are starting to plot how you’ll gain some traction. You’ve gotten funding from great VCs, maybe even from Sequoia. You’ve got cash.

You’ve got growing expenses yet no revenue. You hire sales reps and also add to engineering so they can add new features, increase performance, and support customers.

This means you are consuming—burning through—a lot of cash. The fastest/least painful route to reduce the burn rate and meet the investors’ plan is to grow the revenue line as fast as possible.

Read the whole thing to get a good perspective of how to think about scaling sales at the early stages once you’ve found initial PMF.

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Closing thoughts

As always, I hope you’re enjoying First GTM Hire. If there are other content areas or topics that you’re interested in, please let me know. Also, if you have a founding GTM job that you’d like me to highlight OR you’re looking for a new role just reply to this email.