You’ve heard the statistics: about 90% of startups end in failure. Some of them go up in flames in spectacular fashion, but for the majority of those failed ventures, their decline was the result of a series of small bad decisions that added up over time.
As a recruitment firm that specializes in early stage SaaS companies, with a focus on product, leadership, and sales roles, we often have visibility into the challenges that growing tech companies face—particularly in their hiring decisions. We partner with our clients throughout their hiring process to ensure that they avoid these common hiring mistakes, particularly when it comes to recruiting sales talent.
As you gear up to add the next member of your sales team, you will save yourself a lot of headaches if you avoid these common mistakes.
- Not understanding the requirements of the role, or how to screen for them.
- The interview process is too long/isn't urgent.
- You're not selling the mission/vision.
- Hiring for personality instead of skills.
- Hiring too many people too fast (or in the wrong order).
Many SaaS founders come from technical backgrounds, and have built their product, run operations, and secured early sales and investment. It’s natural for them to evangelize the vision and benefits of their product, and early sales may come easily. By necessity, they’ve had to do it all as they were getting started, and then hand over parts of the business to key hires as they expand.
The challenge with this, especially as it relates to hiring sales talent, is that the founder may not really know what they need in those early hires, or what to look for. If they don’t have any previous experience working in sales, they may have outdated or superficial ideas about what makes an effective salesperson, or they simply may not understand the full complexity of selling SaaS product.
We’ve seen organizations end up hiring farmers instead of the hunter salespeople they need, neglect to validate their candidates claims of beating quotas—and end up hiring people whose skills are limited to selling an inflated version of their abilities, or fail to ask the key behavioural questions that reveal the true profile of a candidate.
At the early stages of growth, organizations need someone who can effectively sell a vision—who can go to the market and evangelize a product to people who have never heard of it. While that ability may come naturally to the founder of a product or service, it needs to be carefully screened for during the hiring process.
Hiring is a complicated process that takes time—you have to balance the need to thoroughly evaluate candidates and determine their fit, with the time constraints that affect all professionals, including your candidates, hiring managers, and teams. A lengthy, drawn-out interview process will turn off top candidates and waste you and your team’s time. In a candidate’s market, top sales talent has a lot of options for their careers. Keep in mind that if they’re open to your opportunity, they are open to others, and are likely having conversations with your competitors.
As a general rule, we recommend that you aim for three interviews or fewer—a screening interview (make this a phone call), an evaluation interview, and a hiring interview. And when you find a candidate you like, move quickly. If you let a few weeks go by between steps in your process, or between an interview and an offer, you run the risk of losing that candidate to another opportunity.
When scheduling interviews, keep in mind that the end of the month, quarter, and year are exceptionally busy times for most sales professionals, so if you need to schedule interviews during those times, be as flexible as possible. You want to hire people who get results, and those professionals are often hustling to hit their numbers.
Lastly, don’t waste time interviewing for a role that isn’t urgent. We’ve seen that a lot of organizations will keep a few job postings active online, even when they aren’t actively looking for talent. This is extremely disrespectful to candidates, who invest time in crafting their application materials and clearing their schedules to interview. It’s also guaranteed to be a waste of time for your team.
Do you need this candidate in place by a certain date? Do you really need this candidate at all? If you can’t answer definitively it means there’s no urgency, which results in a hiring process that is nobody’s top priority.
Are you getting ready to grow your sales team? We've created a free checklist to help you refine your requirements, plan the interview process, and get aligned on competitive compensation.
An interview process is often the first interaction a candidate will have with your organization/brand. And successful sales candidates – even ones looking for a change – are very aware of how valuable they are. They’ll need to be sold on the financial and professional upside of your role.
Take some time in the interview process to sell the candidate on the overall mission and vision for the organization. What problem are you solving for your customers? How do you make an impact in the lives of your clients? And for sales professionals especially, how will they make money selling your product? What is the split between base salary and on target earnings? (For software sales, we recommend that you structure comp so that the rep can double their base by hitting targets).
This can come as a shock to HR professionals accustomed to simply evaluating candidates and extending offers. The secret is to understand your opportunity and the goals of the candidate, then find genuine points of alignment.
You should also pay close attention to the candidate’s experience—the hiring process is your first opportunity to impress potential employees. If it’s efficient, transparent and pleasant it will reflect positively on your organization. If it’s not, you risk alienating qualified candidates before you have a chance to extend an offer. Sales professionals understand that circumstances change, but don’t appreciate people who waste their time.
What’s more important: hiring someone who can hit their sales targets, or hiring someone you’d like to have a beer with after work? The answer should be obvious, and yet we’ve seen organizations choose the wrong approach to their detriment. It’s tempting for founders who have built their company from the ground up, often with the help of long-time friends or college buddies, to favour candidates who are just like them.
Of course, culture fit is an important factor in a hiring decision, but fitting in with the status quo should never take precedence over skills and accomplishments. While a young, innovative vibe (whatever that actually means), with ping pong tables and stocked beer fridges may be appealing for recent grads, it may not be seen as a benefit to the experienced sales person with a track record of always smashing their quota.
Furthermore, hiring for personality alone can hinder diversity in the workplace, create a monoculture that excludes folks with different temperaments and backgrounds, and create a damaging or abusive environment that prioritizes “fitting in” over respectful dissent or even employee safety.
We’ve seen a number of organizations make missteps by leaning on “buddy hires”—pulling people from their own networks. While there’s nothing inherently wrong with tapping your network to find candidates (in most cases it’s good advice!), creating a whole team of people who look the same, talk the same, and think the same can be dangerous. The strongest teams include folks with different perspectives and ideas, different approaches to selling, and different professional backgrounds.
Hiring too many sales reps too fast is a common mistake for early-stage companies, especially when they’ve enjoyed some initial success or secured a round of investment. But aggressive growth can quickly become chaos if you’re not thoughtful about things like onboarding, territory carving, or process training. As you’re scaling your sales team, you need to be investing in the whole infrastructure of the customer journey—those hard won clients will jump ship if you’re not supporting their success.
It’s common for founders to want to skip ahead, or do everything at once, especially if they’ve just received a cash injection from a round of funding. To a founder who has been self-funding, scraping along by watching every penny and working non-stop to get their vision off the ground, a few million in the bank can feel like it will last forever. Unfortunately, the metaphorical startup graveyard is packed with companies that didn’t realize how swiftly their burn rate would catch up with them.
We’ve also seen some tech companies stumble by hiring candidates that are “too big” for the role. Maybe their investors introduce them to a candidate who has been succeeding at a massive organization for years. Or they meet the Head of Sales from that hot company that’s been in the news recently for all the right reasons. It’s tempting to bring the person on for virtue of their (perceived) profile alone.
However, the skills needed to bring a company from their first few sales to their first few hundred are far different than those needed to help maintain a large, established book of clients. And the leadership needed to build sales processes from the ground up and then hire and manage a team is much different than the experience of a senior executive brought in to manage an existing team and playbook.
Of course, it’s only human nature to be aspirational—when you reach that massive valuation, you’re going to want a VP who can handle it, so why not get them early? This kind of thinking can be disastrous, because you end up hiring for the desired future, and not the current reality.
Hiring is often a more emotional process than many of us will readily admit. Often, the mistakes that organizations make in their hiring decisions (and the mistakes that candidates make in accepting or rejecting positions), happen because they incorrectly believe that they are acting objectively, when in fact they are acting from ego or emotion. They want to grow too fast, skip steps, hire only people they want to hang out with, or hire all at once.
Working with a trusted advisor—whether that’s an investor, a mentor, or a consultative recruitment firm that’s seen it all before—can help early stage companies avoid these common pitfalls, and build a sales team that will deliver the high octane growth they dream of.
Ready to build your sales team? Reach out to our team of Toronto sales recruiters — we can help you identify, attract, and hire the top talent you need.