The Decision to Lead Sales at a Startup

Understanding your core priorities (Part 1 of 3)

Given the current shaky economy and tech layoffs, I've had the opportunity to connect with numerous accomplished individuals in Leap's Advisor network who have found themselves facing a situation they don't often encounter: choosing between companies and negotiating their compensation.

Since Leap's Advisor network focuses on sales leadership, many of the discussions I've had revolve around our Advisors considering sales leadership positions at startup companies. In this three-part series, I will examine the reasons why joining a startup as a Head of Sales can be compelling, the importance of understanding the startup's business, and how to negotiate compensation for the role.

It's important to acknowledge the harsh reality that most startups face immense challenges and, ultimately, fail. As a result, don't consider joining a startup unless you have a profound passion for the people, product, and/or market - this passion will be your driving force and will help you overcome the many hardships that lay before you. As a sales leader, you hold a key position within the company, and if you lack deep-seated motivation for the work at hand, there's a good chance you'll leave within 18 months.

Being a Head of Sales at a startup entails being actively involved in the foundational aspects of the role, immersing oneself in the intricate details. It requires less emphasis on forecasting and organizational planning and places greater importance on direct engagement with sales representatives to finalize deals and enhance the sales process. 

Sales leaders who have experience in larger companies should reflect on their genuine interest in returning to this kind of hands-on work. Additionally, early stage sales leaders should have substantial influence on product direction and enhancements, considering their close proximity to clients and the absence of Product-Market Fit (PMF). Early stage sales leaders should embrace the opportunity to collaborate closely with the product team in order to establish the product strategy.

Before accepting a Head of Sales position at a startup, you need to ask yourself what truly motivated you to join this company in a leadership role. Your core values and aspirations should come into play here.

Starting my own company has been an unbelievably incredible learning experience. As a Head of Sales, you are not far off from that initial starting point. You are joining a young company where you are compelled to go beyond the confines of a typical job description and take ownership of aspects you would never have encountered while working for a large corporation.

When I converse with other Leap Advisors contemplating a move to a startup, I always encourage them to consider their core priorities before engaging with founders regarding leadership roles. The responses I've received have varied widely, with some focusing on monetary aspects and others emphasizing excitement about a specific industry or niche.

I urge you to narrow down your core priorities before embarking on the journey. Make use of the interview process to ensure that your fundamental principles align with the company's vision.

To provide a tangible example, I’ve outlined my personal core priorities:

1. The Mission: are you prepared to sacrifice for it?

If you are taking the bold step of joining a startup, it’s helpful to adopt a “go big” mindset. You need to wake up every morning ready to face challenges head-on, while envisioning a lofty goal. Does that goal involve a vast addressable market, or does the company have the potential to pioneer an entirely new market? 

2. The People: are you excited to work with them?  

When you commit to a company wholeheartedly, ideally for at least seven years, you find yourself working closely with your colleagues, in the trenches together. These are the individuals you will spend most of your waking hours with. Ask yourself: Do these people genuinely care about their work? Do you respect them, and do they respect you? Is there alignment in work ethic? Can they challenge you in a positive way, and will you enjoy working side-by-side with them?

3. The Clients: is the team obsessed with them?

The most successful companies in the world are deeply passionate about their clients, and in turn, clients love their products. Look for that alignment and potential within the DNA of the company you are considering. Are the founders and leaders obsessed with the customers? Do clients speak highly of the company? Can you see yourself selling to the ideal client profile for the next 7+ years? There is something to be said for seller-market fit, not only for sales reps but for sales leaders as well.

Evaluating Founders

In the last year I’ve spoken with countless founders of various kinds of startups. When the topic of sales comes up, I find myself surprisingly trying to convince founders not to hire a Head of Sales too early. 

Many founders have deep domain expertise in one part of the business and a basic understanding of others. I, for example, have a sales background and have hands-on experiences building sales organizations, while other founders are former product managers or engineers. The same way I need help on the product side of the business, others need help on the revenue side. Many product-side founders assume they need to start with a Head of Sales to own revenue. 

A Head of Sales should not be the first sales rep selling the product. They are simply too expensive for most startups to take on the risk of that cash burn with little to no proof that a role of that magnitude will get them a significant return on investment (ROI). 

In my opinion, one of the founders needs to have sold the product themselves, including developing the sales motion, determining pricing and annual contract value, gaining testimonials, and knowing where great leads are generated. 

When speaking to the founder, gauge if they’ve done the work to explore their GTM motion, and whether they brought on a few early reps to test out their hypothesis. 

Up next, part 2

Next week, I’ll go into more detail on analyzing a startup’s business during the interview process.