You just hired a sales executive. Do you recommend early stage SaaS companies hire a more junior or senior sales person as their first sales hire?
I think this really depends on a couple of things:
- The sophistication and price of your product
- The type of buyer and company you’re going after
For example, we’re selling a complex product that solves complex business problems, specifically for larger enterprise companies, with deals ranging anywhere between $40k-$250k ARR. Those kinds of deals typically need someone who understands the ups and downs of 90-120 day (or more) enterprise sales cycle, can navigate challenging procurement processes, and who has the experience to uncover and talk specifically to how we can help solve the challenges faced by our prospects. In other words, I needed someone who could come in, “talk the talk” and “walk the walk” to start getting some opportunities developed, deals closed, and eventually work with me on a strategy to start scaling. Hiring this kind of rep was a bigger up-front investment for us, but we are expecting a faster, bigger ROI. Here’s the caveat – experience or seniority DOES NOT always equal sales success. You have GOT to find someone who is still enticed by the “carrot.” Don’t hire someone who has been a VP of Sales or who is coming from managing a team and has been “off the front lines” for too long of a time. You don’t need a manager – you need someone ready to dive into building lists, hitting the phones, implementing technologies and best practices, and aggressively ready to close deals. Find someone who is hungry to take the next step in their career and prove to themselves, their colleagues and their peers that they have what it takes to be a champion.
What are the top 3 tips you would give to anyone transitioning from a professional services business to a SaaS business?
- Commit. When going from services to SaaS, there’s no half-way. If you’re going to focus 110% on building your SaaS company, like you need to do, then you can’t be spending even 10-20% of your time on your services company. I considered hiring a CEO to take over the services company, but realized even that would have taken a ton of time away from me when it came to on-boarding, ensuring financials were strong and in place, etc. Dive in and don’t look back.
- Keep Key Players. In the early stages of launching a SaaS company, especially for the enterprise, you’re going to need some smart, service-focused people to help make sure that customers are successful. Chances are, you already have those people employed in your professional services business.
- Communicate. Change always puts a little fear into the hearts and minds of the people involved in it, especially if they don’t have much control of the surrounding circumstances or haven’t been clearly communicated with. As a CEO or business leader, it’s your responsibility to ensure that everyone – from your team members and advisers to your customers and prospects – knows how, when and why you’re making this transition. A few bumps in the road are inevitable, but communicating in a clear and timely fashion can help keep them to a minimum and help build the integrity of your brand.