In our experience, our graduates can earn gainful employment at early-stage start-ups that are beginning to build sales teams for the first time. The primary challenge for us is connecting our students with successful start-ups at just the right inflection point in their growth.
Maybe you’re a founder who doesn’t want to let go of sales, or perhaps you honestly don’t know how to move on to a more traditional executive role?
Either way, transitioning away from a founder-led sales model – managing the entire sales team on your own – must eventually occur for the business to expand market share and increase revenue.
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Every business experiences the same consternation and “analysis paralysis” when initially creating sales development roles, so we completely understand how hard it is to let go of such a vital function that you’ve successfully spearheaded for years.
But now may be the time to step aside and delegate responsibility to a specialist in the sales field and entrust your sales pipeline and methodologies to a diverse team of talented, skilled professionals.
Besides, founder-led sales aren’t exactly the most efficient way to grow revenue in the first place, yet you may have had no other choice but to wear several hats to get your company off the ground and educate salespersons.
That’s why we composed this guide to help founders like you learn the benefits of transitioning away from a founder-led sales model.
Overall, the process isn’t complex once you grasp the essentials, so we’ll flesh out the following aspects of a successful switch, including:
- What founder-led sales mean, and why they happen
- The effects on the founder and the sales team at large
- The benefits of a strategic, well-thought transition
- How to properly adjust when your company reaches the inflection point
That said, let’s jump right in and take a closer look at why founder-led sales must eventually change to grow the company.
What are founder-led sales, and why do they happen?
The definition of founder-led sales is reasonably straightforward; however, there’s more nuance that we need to address before moving on to the inevitable effects of such a business model.
Specifically, a significant number of entrepreneurs come from a background in product development and technology, so salesmanship isn’t necessarily their first priority – unless the company is a sales start-up.
But even then, you’ll have to move away from founder-led processes to scale revenue by magnitudes or risk missing meaningful opportunities to gain more loyal and more valuable customers.
Initially, no one knows your product or service as you do. You’ve done the market research, identified a pain point, and designed a solution to that pain point.
Your product or service is yours and yours alone, and that’s how you plan to keep it until you come across “the right moment” to change.
Ideally, you’ve also spoken with many prospective customers at this stage of your development to learn more about the market you’re entering. Indeed, your expertise is always on full display whether you’re developing a new SaaS platform for content creation or something as down-to-earth as a new mobile video game.
The idea is that your company still needs the knowledge that only you possess to grow revenue.
Marketing and promoting your company may come naturally to you, but it’s a critical mistake to neglect the other side of the coin: sales development!
Are there positive sides to founder-led sales too?
In our experience, that’s what makes it so hard to delegate sales to a team rather than doing it all yourself. Many founders never appreciate the distinction between marketing and sales, lumping them both into one function.
Without a doubt, there are positive sides to founder-led sales we need to mention too.
1 – Founders learn how to sell products more efficiently
Primarily, the founder-led sales model allows you to learn first-hand how your product or service will sell in the real world. It’s an all-too-common mistake to have high hopes and aspirations for your business but fail to communicate your value proposition to your target market.
If you build it, the customer doesn’t have to come!
So, founder-led sales provide you with precisely this opening to engage with consumers. You may be close to developing a world-changing technology, but you’ll never know unless you listen carefully to customers and apply those lessons to make their lives better.
2 – Empathy for the hurdles your sales team will face
The founder-led sales model is a fantastic way to appreciate the value that a sales team will create along those lines. You can compose award-winning sales scripts all you want, but all it takes is one finicky customer to throw everything into question.
At its core, the sales discipline requires identifying which leads are worth pursuing, qualifying them as real prospects, and which are most likely to be a waste of valuable resources, especially time.
Besides, any entrepreneur knows how incredibly frustrating it is to spend days or weeks nurturing leads only to see all of them walk away and choose a competitor instead. It’s a massive punch to the gut, no matter how much experience you have in the sales field.
But without founder-led sales processes, you’d never gain the ability to put yourself in your sales team’s shoes when things aren’t going as well as planned.
When things go wrong, a founder-led sales model is an effective way to take the initiative and turn a negative into a positive.
3 – Distinguish reality versus imagination of market needs while keeping overhead costs low
As we touched upon briefly, it’s perfectly understandable when founders have a semi-idealistic opinion of their product’s value to the world. While it’s OK to have supreme confidence in your ideas, the downside is that you may overlook reality in favor of imagination – and ultimately fail to deliver tangible results.
How do you know for a fact that your target customers actually need your product? Are you assuming based on experience, or will hard data inform your opinion?
In our experience, founders tend to do a little of both; they make decisions based on data, but the application of that intelligence boils down to experience.
Still, at what point does the founder-led sales model lose momentum and ultimately become a hindrance to the business’s long-term growth?
Here’s what we’ve noticed since we launched our sales Bootcamp not too long ago.
When do it become detrimental to the business?
The bottom-line question is this: when does the inflection point occur and negate the benefits of the founder-led sales model?
It’s not an easy question to answer, but there are signs to watch for if you believe that your company may have already reached the inflection point.
For instance, it may be time to transition when your company’s product fits the target market, and you need to scale up ASAP. But one of the biggest mistakes you can make is believing that you’re ready to scale up when in reality you’re still in the early growth stage.
Likewise, it’s time to move away from founder-led sales when your company has other areas that you need to address, such as a critical software bug.
Another curious phenomenon we’ve seen is when founders simply don’t believe sales development reps are necessary to scale the business. They keep pressing forward as a one-person band, hiring contractors as needed to accomplish only short-term goals.
How can founder-led sales affect the founder at the inflection point?
The most considerable risk of the founder-led sales model by far is burnout. Essentially, your work habits become your worst enemy, and you risk losing the edge you once had when you can’t accommodate your company’s basic needs.
1 – The risk of burning out
You may have an incredible skill set and a tireless ambition to see your company thrive, but are you working yourself too hard? Are you inadvertently stunting your business’s growth by not letting go of founder-led sales processes?
If you’re anything like most executives, your immediate thought was something like, “No! I’ve still got plenty left in the tank!”
While that’s a great attitude to have, is it rooted in reality? Do your loved ones and friends constantly recommend that you take breaks and time to yourself?
The problem with burnout is that you’re always the last person to admit it. Often, entrepreneurs brush off the stress of the job as a standard and a way to “build character,” but the reality isn’t always that simple.
2 – The evaluation of the business doesn’t scale, making it harder to fundraise
Some of the most lucrative companies in the world utilize economies of scale to grow their market share exponentially. If you haven’t already started positioning your company to expand at scale, you need to realize that you’re missing out.
Savvy investors will always want hard data on revenue projections to justify the price, so if you can’t provide them with predictions at scale, you risk making it harder to raise funds to grow the business.
So by transitioning away from the founder-led sales model, you can position your company as a prime opportunity that may pass by investors if they don’t act today.
3 – Communication and people management can falter
Another way the inflection point could affect you is when you have problems communicating and managing your workforce. When building out a sales team, your most precious assets are the workers who you’ll entrust to grow revenue. You’ll undoubtedly hold the team accountable, but you have to give them the tools they need to succeed.
Honestly, it’s a mistake we see executives make all the time because they spend so much time handling everything sales-related that they neglect every other aspect of the company – or keep critical product knowledge to themselves.
Without a doubt, no one can question your motivation to grow revenue, yet how much productivity are you wasting by doing everything yourself? There’s a better way we can show you!
Nowadays, the sales field is a mature discipline with transparent best practices and methodologies that you may not know about. So it may be time to think about those tough business decisions you’ll need to make soon, or they can haunt you down the line.
How can founder-led sales affect the team at the inflection point?
On the other hand, the founder-led sales model can impact the sales team as well – negatively impact it, that is.
In our experience, entry-level salespersons still need care and feeding to learn the peculiarities and affinities of a specific market. That’s not a knock against sales; it’s the reality of building a start-up.
But you have to let go to move forward and scale up revenue! The problem with founder-led sales is that managing something as ordinary as a sales call takes priority over everything else.
The inevitable result is that the sales team doesn’t have a clear direction – or visibility whatsoever – into other areas of the company that can help the sales team scale revenue. For instance, your sales team may have no clue that a fantastic new feature will soon be added and miss vital opportunities to showcase impressive product development.
It’s common for executives and entrepreneurs to show favoritism to certain aspects of the business, but in the end, spending too much time admiring the “shiny objects” of your business’s day-to-day operations is one way to alienate your sales team.
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Four benefits of moving past founder-led sales
Clearly, the imperative to move past founder-led sales is a top priority for successful companies that find themselves at a revenue plateau, but are you actually willing to let go?
If this description fits your company, we highly recommend that you keep these four benefits in mind, such as:
- Better team alignment
- Better product alignment
- Easier scaling
- The business acts as a business
To give you an example, let’s say that your company is a start-up content creation platform. As a programmer, you excel at developing novel A.I. solutions, so you want to bring that capability to the content industry.
The problem is that content creators – the writers, video producers, and graphic artists – will have no clue about the benefits of your solution or how it works. The bonus is on you to educate them and take their feedback to heart!
So when you finally let go of founder-led processes and turn them over to sales professionals, everyone on the team will know exactly what’s expected of them because they’ll have all of the information they need to succeed.
The only natural result is a faster, more agile sales team working towards the same goal with the same background and market intelligence. Undoubtedly, the biggest downside of founder-led sales is that vital product knowledge and benefits to the consumer never leave the founder’s head.
If your salespersons can’t explain why your product is any better than competitors, is it any wonder why your revenue stream has plateaued?
Resist keeping your sales team in the dark, and you’ll have a much easier time making your business operate and feel like it’s a real business, not a side gig or pet project.
How to move beyond founder-led sales
Once you appreciate the benefits of transitioning away from founder-led sales, you can begin planning that transition.
The truth is that it takes time to hire a sales team that doesn’t need constant hand-holding, however the transition can be a smooth one with a bit of planning. If you take the follow four suggestions to heart, we’re sure that you will see a much easier transition from founder-led sales to a thriving sales team.
1 – Start with your organization plan for Sales
In a startup environment or a business whose sales are primarily founder-led, moving fast and responding to the needs of the day are typically paramount in importance.
However, intentionally carving out time to carefully consider how you want your Sales organization to evolve over the next year or so is very valuable to your overall business success!
Our suggestion? Start off simple, with your first hire. Think about how you want that individual to progress in their career at your company. Is the intention for them to be ‘leveled up’ for management once your pipeline and lead volume justify the need for a larger Sales team? What are the stages of the business that trigger the need for the expansion of that team? Often this is integrally tied to pipeline metrics and deals closed.
You may have a pipeline model to refer to while you are considering what your Sales organization plan needs. We recommend having that model up on one screen to refer back to what your assumptions and inferences are for Sales as you are planning different stages.
Moving from generalists to specialists can often be a good idea. Your first hire may be a BDR or SDR who has shown a great deal of aptitude for looking at the ‘bigger picture’ of your business. Individuals such as this can often be trained for promotion as your company scales with them.
A final consideration when looking at your organization plan is how does it support your overall revenue strategy? How do you envision your Sales team interacting with Marketing, Customer Service, or Fulfillment areas of your business?
Often spending a bit of time to outline how those relationships will evolve will surface what kind of infrastructure needs you’ll have at certain stages of the business as it grows. Good examples of this are:
- “When will I need a CRM platform?”
- “Will Marketing Automation provide the necessary air cover for my Sales reps to close deals faster?”
- “What kind of supportive materials will salespeople need to help them reach their targets?”
Often the material needs of a Sales organization expand alongside the business expanding.
2 – Level up onboarding documentation
As a founder, there is a great deal of business knowledge locked in your head. As you start to grow your revenue engine and people it with a great team, you’ll need to spend some time building out your onboarding documentation.
Onboarding new team members is one of the most critical periods in a new team member’s time with your company and can set them up for great success, or ruinous failure. It’s critical to ensure that you have your onboarding documentation in place before your first hire comes on board.
At Uvaro we make great use of Kiite’s Playbooks platform for onboarding. We have found that this visual card-style layout helps keep those relevant data points top-of-mind for new hires. However, the platform and format can vary depending on the needs of your business. Broadly speaking, consider the following items when capturing your business knowledge into onboarding documentation:
- Start with the basics and move into the specifics. Assume things like logins, links to commonly used tools, communications channels, etc. Move into specifics once you have ensured basic competence in those tools.
- We like to organize our onboarding by columns in Kiite’s Playbooks. We focus on the general info that new hires will constantly refer to in their few weeks and move into checklists such as policies and procedures as well as reporting dashboards or deal analytics.
- Capture as much of the knowledge that exists in your head on a scratchpad first and then start to group those items into categories. Maybe your product has different demographics of people, that should be something that your Sales team is aware of. Perhaps your product offering is vastly different in one region versus another, these are data points that can be conveyed in your onboarding and will save you headaches later on.
3 – Understanding your commission structures
This one is important; have your commission structure defined before your first hire! This will come up in your interviews with potential salespeople.
Understanding what your compensation strategy is so that you are properly incentivizing your sales team while at the same time ensuring that you are maximizing profits is an important consideration. This is where your pipeline model can really help provide a clear picture of what kind of leeway you have in your overall product cost and will save you months of headaches in the future.
There is a strong possibility that your commission structure will change within that first year of bringing on a sales team. That’s ok! Market conditions change, pipeline models require adjustments, etc. But going into your negotiations with a clear idea about how you are going to compensate your sales team’s performance will make those adjustments later on a lot less painful.
4 – Secure a talent pipeline
Hanging a shingle outside of your shop saying ‘help wanted’ will get you interest, but taking proactive action towards securing a proper talent pipeline will save you both time and money. Founders are no strangers to the power of networking, but considering a professional talent pipeline that you can lean on for your initial hires as well as expansion periods in your business can really accelerate the timeframe between identifying when you have a need for headcount and when you actually have a person in the role!
In Sales, every day you delay in making a good hire translates into revenue lost.
Having a proactive talent pipeline secured allows you to ensure that when you have the need for talent that your talent vendor understands your business goals as quickly as possible, and that you are able to get that critical hire in place right away.
Uvaro offers a Residency Program that is designed to be your talent pipeline. We can provide you with not only the individuals to add to your sales teams but also provide the training, tech stack, and insights to ensure that your pipeline goals are met.
For more information on our talent pool, feel free to check out our talent pipeline offerings: Hire A Sales Rep | Hit Your Growth Targets
Uvaro — A Founders Sales Solution
If your company sits in a robust financial position and you’re ready to commit to long-term strategic hire, our graduates and community are an excellent talent pool to tap into. We can handle finding the perfect candidate while you worry about growing the rest of your business.
Read more about our business offerings and how Uvaro can help you build a consistent pipeline of sales talent, accelerate your sales development programs, and maximize every rep’s performance metrics!
Ready to get started? Grab some time with our Business Products Lead John Moon and get ready to grow!