Hiring Your First Sales Team
Hire a team internally or outsource? This is one of the most challenging and critical decisions an early stage startup can face when trying to build a successful sales org. Finding competent hires is difficult on its own, which is why recruiting is a multibillion dollar industry that only continues to grow. While most founders will gravitate naturally towards hiring their own team, they often underestimate just how complicated and laborious the process is.
Even once a team has been hired, that doesn’t guarantee success. In fact, that’s where the real challenges begin. While a founder (and their investors) will want revenue to be brought in as quickly as possible, there is a ramp period for new reps, which can take up to 90 days - depending on industry and sales cycle. In addition to that, a manager has to be hired to train and oversee them. The combination of a steep learning curve, along with the large amount of time and resources that have to be dedicated to get people up to speed, is one of the many reasons that early-stage startups often struggle to bring in revenue. However, there is an alternative: look to an experienced and competent third-party to come in and make the magic happen.
While it might seem counterintuitive, outsourcing a sales team is significantly less risky and less expensive. While a new hire will take months to get on board, a firm that has executed on this type of work before, can be up and running with a data based prospecting framework within weeks. The additional air support provided by the management teams of the outsourced firm can be a lifesaver in smoothing out bumps in the road that are an unavoidable part of building a sales operation.
Then there comes the issue of relationships and adaptability. Internal teams, if facing issues, need more time than outsourced teams to work through these problems. If for some reason a founder feels his/her internal team is so underperforming that he/she wants to fire them, it sets him/her back significantly (time and monetarily), which can be highly damaging to growth. This is only exacerbated by the revenue goals that are often in place to satisfy investors and enable future fundraising. When working with a third party vendor, cutting ties and moving on is infinitely easier than firing your own team. At the end of the day, an outsourced team is a vendor. Just as easily as a team can be brought on, they can be let go.
Building a sales organization is no easy task. This is especially true for new startups attempting to tread a new path. With over 90% of startups failing, teams that waste valuable time trying to internally build sales infrastructure, along with onboard and train new reps, add significant risk to what is already an uphill battle. Working with an outsourced firm can give a founder a near turn-key solution, freeing them up to focus on the many other areas of the business that will need their attention.
Darwinian Ventures is a go-to-market and growth advisory firm that specializes in working with early stage startups to achieve sustainable growth. Darwinian’s highly integrated model has successfully built revenue operations for over 30 companies, brought in over a $100MM in revenue, and enabled their clients to go on to raise hundred of millions in funding.