Often founders look at passing on the responsibility of getting to the first million in revenue to a sales leader. This can prove fatal as sales motions are not validated, and founders do not get the opportunity to connect with early adopters of the product to gain valuable insights, says Jen Abel, the co-founder of JJellyfish, a sales consultancy firm that works with over 100 early-stage startups.
In this episode of The Orbit Shift Podcast, we speak to Jen about why she strongly believes in a founder-led sales motion; why sales teams fail; how companies can transition from a product-led motion to a top-down motion; the qualities that early-stage companies should look for in sales hires, and startups should go about prospecting.
Q. Tell us about your journey and the problem that you’re trying to solve with Jjellyfish.
Jen: I’ve been into early-stage SaaS sales for the past 12-14 years. I was the first or second enterprise sales hire at an EdTech company called General Assembly. I was also the first enterprise sales hire at a YCombinator startup called Muse, where I met my co-founder Justin. The problem that we saw in the marketplace at the time was founders who were looking to generate their first million in revenue would usually delegate it to a non-founder. They would say, ‘let’s hire a salesperson to go out and sell this and then get the traction that we need.’
That model no longer works. The founder needs to be at the tip of the spear and be able to navigate the early-sales ambiguity. Most salespeople don’t have that skill or that capability. They also don’t necessarily have that vision or energy that a founder does.
We launched Jjellyfish with a thesis of if a founder is the one that has the highest success rate to generate that first million and go out to market; how can you help scale their time and help them?
And we realized the real pain and unmet need actually existed with international startups or international founders looking to come into the U.S.
Q. Why do the first sales hires fail? What are some of the common reasons that you’ve noticed?
Jen: There are three reasons why the first sales hires fail. The first is, most salespeople have no idea how to navigate ambiguity. Few can be successful when the process is in their hands. Most of them won’t know how to figure it out if the founder hasn’t figured it out first.
The second is the social capital when you have limited to no brand equity in the marketplace. The only person that’s going to be able to inspire the market is going to be a founder.
And then the third reason why most salespeople fail is that they go out to sell. They don’t go out to learn. You can’t just go out and sell.
Q. How can you navigate from that ambiguity of customer discovery to arriving at a repeatable sales motion? Is there an approach or a framework that you apply?
Jen: Early-stage sales is a little bit of a black box. Customer discovery forces you to get super focused. It basically says if you were to go out and learn from a market, what Ideal Customer Profile (ICP) do you want to go out and learn from first? That is step one. Whom do you believe is feeling a pain that you think you can solve a problem for? And what are the characteristics of that person?
An ICP doesn’t necessarily mean a specific vertical. You could go after financial services, insurance, and retail if you’re specific on the type of role you want to go out and learn from and potentially sell to. When you define your ICP, you need to define it by a specific role, a specific vertical, or a specific use case. If you keep one of these three things consistent, that will allow you to unearth where things become repeatable.
Q. Once you’ve arrived at some kind of a sales motion, what’s the best way to scale it?
Jen: First and foremost, don’t think about scale until you’ve identified repeatability. A lot of founders come into the U.S. market, and they say, ‘I’m looking to have someone help me scale my sales activities’. But when you’re going from zero to one there is no such thing as scale. It’s still going to be manual founder-led sales. It’s still going to be about trying to figure out what works and what doesn’t work, from messaging to value proposition, to pricing, to the channels you use. Everyone’s thinking about their Total Addressable Market (TAM). How big is my TAM? But the TAM does not matter in the early days. What matters the most is- is there a group of individuals that are most desperate for this solution that you can generate your initial million dollars from? Are you reaching out on email, LinkedIn, or Twitter? What type of market are you speaking to? And what we always like to say is you get higher value selling to one than selling to everyone. What you’re trying to do when you’re building repeatability is if you get one customer in a very specific audience, it should make it a lot easier to get your second, your third, your fourth, your fifth, and your sixth.
There’s a lot of types of go-to-market models out there, right now. You have sales-led, marketing-led, product-led, community-led and all of those actually have the same starting point, which is founder-led. In order to get the real raw feedback, that insight that’s going to allow you to separate yourself from all of the other alternatives out there in the marketplace. That can only be uncovered in one-on-one conversations. You can’t get that type of raw insight from running a marketing campaign or a focus group.
Q. What are your thoughts on how to think about different sales models that will work for different types of companies and products?
Jen: It comes down to that idea of is it more of an education-led product or is it more transactional?
The more education-led the product is, there is a bit more convincing. People don’t realize that the problem exists. That takes a totally different level of salesperson and they’re typically a lot more expensive. That’s more like a field sales rep, who is going to go out and help the market understand where the problem exists. That takes someone that can build trust and has credibility in the marketplace.
When you’re dealing with more of a transactional sale, which can get closed in one or two touchpoints, it’s probably more script-oriented. If you lose one or two prospects, it’s not that big of a deal, because there are hundreds of opportunities out there, you probably don’t need someone as experienced as you would on an education-led sale.
This should also play into the pricing motion. Meaning if it’s more education-led, it’s going to be a lot more of an expensive solution. If it’s more transactional, it’s going to be lower cost, which means you don’t necessarily need to have that level of caliber in there trying to sell that specific solution.
Q. How would you approach sales from a product-led growth (PLG) motion and from a top-down sales motion?
Jen: Those are two radically different sales motions. Product-led, where you’re selling to a user versus an end buyer with multiple licenses.
What I have seen is that every PLG motion eventually needs to unlock a top-down motion. PLG is for a period of time. No one is forever a PLG company, because no matter what, you’ll eventually get to the IT team where they’re going to want to do security audits, negotiations on pricing, and new features and benefits.
Let’s use GE as an example. Working with two or three users within GE is very different from working with 300 users or licenses within GE. It’s different price points and also, more importantly, a lot of these folks have different audits. Someone is racking up a certain amount of money that eventually needs to go through a different process. So every enterprise organization has a process that we as salespeople need to abide by and follow.
Product-led growth sits under the radar, but eventually, it gets placed on the radar and will force a different motion to happen. That’s why I always say product-led growth will eventually always turn into a sales-led motion or top-down motion.
Q. What does it take to go from a product-led motion to a sales-led motion?
Jen: In PLG, you’re selling the solution. It’s the solution that has been driving it. In top-down sales, you’re selling inspiration. These executives are super busy. You can’t sell them in a cold email. It’s more about inspiring them. Trying to articulate an unmet need a buyer has is very different than selling to a user.
The user and the buyer are two radically different mindsets and require different value points in different unmet needs. There might be some things that can be translated, but it’s selling apples and oranges at this point. I’ve seen a lot of product-led growth companies stumble, and get tripped up because they think that PLG can translate into a top-down motion very quickly. Because they think they’re just targeting executives now. But executives have very different buyer checklists than a user does.
When you’re doing a top-down motion, you need to have a day one mindset, meaning you have to approach it as if nothing has been validated, and everything is still an assumption. You need to figure out what type of executive you want to sell to. It might not even be the user’s boss, it could be the user’s boss’s boss. So figure out who is that ideal customer you want to sell to.
Second, what is the unmet need going to accomplish? Why are they going to purchase this for a much larger group or for themselves? That messaging also needs to be validated.
Lastly and most importantly, what does the sales process look like? It’s not going to be the same sales process as it was for the user. You’re going to have probably three or four different buyers included as a part of this discussion. You’re going to typically have to go through some type of procurement process. So you need to have all of those assets built and prepared for. But more importantly, the founder at a Series B company that’s been product-led to date needs to be the owner of validating the outbound motion for the executive. That feedback loop needs to be extremely tight because it’s still an unvalidated motion.
A VP of sales should not be brought into the top-down motion until it’s been validated. Their job is to manage a team, maintain accountability, and help unlock predictability in the sales motion. They are not there to validate the model. A lot of people think they need a VP of sales. But a VP of sales is a managerial role. It is not a validation role. The person that needs to validate is the founder and it always should be.
Q. So who should be the first sales hire?
Jen: The first sales hire is actually the founder. Founders are the ones that need to get those first three to five logos. Because you want to keep the feedback loop tight and you want to make sure that you are collecting all of the insights you need to validate the sales motion. Founders are the ones with the social credit on the team to get in the room with the right people and inspire them.
Once you have referenceable customers and case studies, you will now be able to hire your first one or two sales reps. What I always suggest is to go out and poach those people. You want people that are currently successful and are probably at the stage of a company, one level beyond you. Let’s say you’re a seed-stage company, you want to go out and hire someone from a Series A, if you’re a Series A company, you want to go hire someone out from a Series B. And what you want to do is look for the person that was probably part of that initial early sales team that has been there for a year or two. Typically, they will eventually work themselves out of a job and be open to new opportunities.
The first one or two salespeople usually love the building and don’t necessarily love executing once it’s been validated. So I would go out and poach people at companies in a similar space, it doesn’t have to be the same domain space. But in a similar world.
Q. Any particular skill sets and red flags that you would look for while making these hires?
Jen: Never hire someone from an organization that has incredible brand equity or a massive marketing engine. They are going to expect leads handed to them and they’re not going to necessarily know how to navigate the ambiguity or build out the early sales process.
You want someone who has experience at the maturity of the type of organization you are in today. You want people that understand how to build out an early sales process, know how to manage a founder, maintain tight feedback loops, and also have the confidence to tell you, ‘Hey, I don’t know if this is necessarily the market we should be going after; here’s evidence to why I believe this is invalidated’.
Do not hire them because they come from a big logo. I’ve actually never seen that work out at the early stage.
Q. How do you go about building your first set of prospects once you’ve done your customer discovery a little bit in the early days?
Jen: You want to make it sustainable, but you also want to be narrow. The more specific you can speak to something, the easier it is to build trust. I say ‘specificity unlocks trust’. If you can’t speak to something with confidence, conviction at a certain granular level, it’s very hard to build trust with the market.
People want to know you understand their problem better than they do. So I would say start out very small. Is there a group of, 1000 contacts you could reach out to? Let’s assume there may be two contacts within an organization that could potentially be the buyer. So that means, are there 500 companies you could reach out to in your market to validate your assumptions.
You don’t want to go too small. Where there are only 50 companies and then once you build out that sales motion, you’ve exhausted it, you want to make sure you have at least 1000 to 1200 contacts, you can go after and test and potentially sell to over the next 12 months.
Once you build that list, you can leverage LinkedIn Sales Navigator to start to check off certain discoverability signals that they’re displaying to make sure they’re a good fit. Find the people that are part of organizations that experiment or have previously worked with startups. This is a signal of an early adopter. Don’t try and go out and convince a company that’s never worked with a startup to be an early adopter. It’s never going to happen. Then write a thoughtful note. Spend 15 minutes writing a note. This is manual work. Nothing can be scaled yet until we are able to validate what works. So you have to spend the time, writing a strong note, inspiring someone to take a call with you. You’re not selling them anything right now. You just want to get them on a call and have a knowledge exchange. And on that note, there are only three things you need to craft: Why are you reaching out to them? Why should they take a call with you? And a clear call to action. Would you be open to a 30-minute chat? It should be no longer than three to four sentences. Short, sweet, from the founder, problem-led, and personalized.
Q. Where can our listeners follow you and your work?
Jen: Twitter is where I’m most active.