Founders: Delegate sales at your own peril.
This can be a difficult pill to swallow for some founders who don’t have an inclination for sales. They may try to outsource selling, which will is a bad idea.
For startups and small businesses, founder-led sales gives you the best chance to succeed. This remains true even as the company grows. The founder’s role in the sales process may change, but they still own the outcomes.
Let’s talk about why founders need to lead sales, especially early on, and the three stages of founder-led sales as a compant grows.
Why Founders Must Lead Sales
In the early stages of a company, sales is more than just generating revenue. It’s customer research. If you really want to know what a potential customer thinks of your product, ask them for money. Every ‘no’ is a lesson and a chance to improve your product, positioning, or to change your target customer.
It’s also important for founders to have sales skills, as these skills apply beyond revenue generation. You will be selling when recruiting early hires, fundraising, and ultimately selling your company. If you can’t develop an expertise selling to customers, there is no way you will earn a premium exit for the business.
The best part about sales is that anyone can learn it. It doesn’t matter your background, education, or technical abilities. With practice and coaching, you can learn to sell. And your company will be better off for it.
The Three Stages of Founder-Led Sales
At least one founder should be the lead salesperson in an early-stage company, but they should stay involved with sales as the company grows.
I think about Founder-Led Sales in three stages:
Stage 1: Founder-Salesman
Early on, the founder is the one and only salesperson. They are the sales team. The founder is responsible for prospecting, qualifying, negotiating, and closing deals.
I recommend founders lead sales for at least the first 15 customers, though the size of each deal matters (the smaller the deal, the more sales the founder should lead).
Why 15 sales? Because in my experience, it takes at least this long to really understand the customer, their pain points, and the solutions that close deals. The more times you experience the entire sales cycle for yourself, the better you can set your sales strategy. During this time as the Founder-Salesman, you will be creating the roadmap for your future sales leader and their sales team.
Stage 2: Co-Sales Leader
After closing approximately 15 sales, the Founder-Salesman should seek out a sales leader to take over the role. It’s important that this sales leader is willing to get their hands dirty and learn from your initial experience selling. Their job is not to manage sales reps — at least at first. Their job is to work alongside the founder to build the sales system from the ground up.
At this stage, the founder and sales leader are essentially co-sales leaders. The founder is teaching the sales leader what they learned during Stage 1, and the sales leader slowly takes over day-to-day selling activities: prospecting, qualifying, negotiating, and closing.
The co-sales leaders design the company’s compensation plan, laying the groundwork for the sales leader’s future sales team. It’s critical that the founder is involved in this process. Your compensation plan is your sales strategy made concrete. It determines what customers your sales team will prioritize, the size of deals they chase, and their role in retention/expansion.
Most importantly, it establishes the culture of the sales team. Are you whale hunting or processing many transactions? Are you selling direct to customers or through partners?
The founder needs to retain co-ownership of the sales strategy even as the sales leader takes over daily functioning.
Stage 3: Chief Sales Officer
Eventually the sales leader will take full control over the daily operations and strategy of the sales team. They will hire reps, set the sales plan, design compensation systems and guide their team to (hopefully) winning quarter after winning quarter.
Even at this stage, the founder is still involved in sales and co creates the plan with the sales and finance leaders. As a company leader, the founder needs to keep their finger on the pulse of the sales org.
This is the stage where the founder becomes the Chief Sales Officer, although this is not their official title. Their role is to help create a culture of sales consistency, where the company can rely on sales to make plan and provide steady revenue for the company.
Part of creating sales consistency is building sales enablement tools and processes.
Sales enablement was formerly known as sales training, but today it’s something much more than that. Instead of the occasional training session, sales enablement provides real-time support and data for improvement to the sales team. The enablement team can adjust scripts, create sales collateral, and conduct training as needed, making micro-adjustments every day to help the reps.
As the Chief Sales Officer, it’s the founder’s job to prioritize enablement to make sure the entire sales team can deliver consistent performance.
A Founder’s Job is to Sell
Whether or not you come from a sales background, it’s the founder’s job to sell. With a group of co-founders, one of the co-founders needs to take on the responsibility of selling. It’s just as critical to the success of your company as product and engineering.
Importantly, it’s always a founder’s job to sell. They never graduate out of selling. Whether you’re in the Founder-Salesman stage or Chief Sales Officer role, you are working to close deals with customers, investors, and potential acquirers.
If you’re eager to learn more about the founder’s role in selling, check out the Sales Learning Curve, an article written by Mark Leslie and Charles Holloway. It’s another way to think about the evolving role of sales in a startup.
And of course, pre-order a copy of my and Patricia Favreau’s new book, Unlikely Entrepreneurs: Wins, Losses, and Crucial Lessons on Building Great Companies. Chapter 2 is about — you guessed it! — sales and selling. It’s that important.
