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Sales Hiring Formulas In SaaS Businesses

sales hiringWe had a very special podcast this past week on sales hiring with my good friend Mark Roberge joining us to promote the launch of his new book. Mark was the first sales hire at Hubspot in 2007 and is one of the only folks we know in the SaaS business who has scaled with his company all the way to $100MM in ARR and 450 sales and support employees. He heads up Sales and Services today and wrote about his experiences in a book that just came out titled The Sales Acceleration Formula: Using Data, Technology, and Inbound Selling to go from $0 to $100 Million. It is one of the most tactical books I’ve read on selling SaaS and building a repeatable revenue organization. If you care about this at all you should get a copy today on Amazon. We covered the first part of Mark’s book which talks a lot about sales hiring. Below were some of the key things that we discussed and any founder can use to their advantage when thinking about sales hiring.

(1) Build A Recruiting Agency Within Your Company – The best piece of advice on sales hiring Mark got was basically don’t hire a recruiting agency and don’t build a corporate recruiting team. Instead, build a recruiting agency within your corporation. Mark argues to mold the recruiting style of an outside agency (work hard, paid on commission, cold outreach) into your own company and be incredibly metrics driven and detail oriented with the approach. Base the performance bonuses on things like fill rates, timing, and long term success of the hires. Measure the sales hiring team in a similar manner to a sales organization and it’s pipeline (outbound comms –> comms to connections –> connections to phone screen –> phone screen to interview –> interview to hire).

(2) Passive Candidates Rule The Roost – Great salespeople never need to apply for a job and so finding the best requires a passive recruiting strategy. The two greatest ways to recruit passive candidates in Mark’s opinion are first to leverage the search functionality on LinkedIn and second to implement the “forced referral” strategy. On the first, running basic LinkedIn searches against things like zip code, job title, school, and company should generate a list of solid candidates. Mark’s most effective search was actually looking for former employees of companies where he had relationships with the head of sales. He would first choose the head of sales and then run LinkedIn searches against salespeople who had worked for this head of sales but had since left. Once he had a good size list he would email it to that head of sales and ask their advice. 99% of the time it would generate honest feedback on who made sense from a sales hiring standpoint to go after and likely spark ideas of some other folks that the head of sales recommended. On the second, I’ve written a bunch about the forced referral (to Mark’s credit I found out about it through him) and it really does work well for sales hiring.

(3) Don’t Fall For The Ideal First Sales Hire Trap – When faced with the first sales hire decision, many founders put the most weight on senior leadership and industry domain knowledge. This is a trap as the skills really have no bearing on getting your company to the next phase. Mark coaches that the most critical value from your first sales hire should come from their ability to accelerate the company towards product/market fit. Mark has written extensively on who he likes to hire first in sales (TLDR version = the “entrepreneur” type of sales hire) and has a good framework for the 4 types of people that you will usually interview when embarking on making your first sales hire.

(4) Develop Ideal Hiring Criteria Early On – After you’ve made your first sales hire and they are having success, something that often goes unnoticed is specifically an analysis of the qualities that the hire has that makes them successful. Early on, Mark broke this down and developed a science around sales hiring and the next sales hires having the same levels of aptitude in these areas as the first sales hire. For Hubspot, the 5 major ones were Coachability, Curiosity, Prior Success, Intelligence, and Work Ethic. They developed a scoring system around these 5 traits and focused hiring on finding people who mapped to the traits. As you think about your own SaaS company this approach really sets a tone and understanding of how to repeat that first sales hire and is not often paid attention to in the early stages of a SaaS business.

Michael Brown
Michael Brown
Michael is a Founder & Managing Partner at Bowery Capital based in New York. Prior to Bowery Capital, Brown was a Co-Founder and General Partner at AOL Ventures. Before AOL Ventures, Brown worked for the investment arm of Richard Branson’s Virgin Group. He began his career at Morgan Stanley as an equity research analyst. Outside of his professional life, Brown serves on the Board of Directors of the National Forest Foundation and the Columbia College Alumni Association. He holds a B.A. from Columbia University.