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The Biggest Mistake in Founder-Led Sales
How Glengarry Glen Ross & Wolf of Wall Street Can Hurt Product-Market Fit
I’ve seen many SaaS founders with no sales experience become sales rainmakers. It’s a beautiful thing. It’s also extremely dangerous. It can lead to the biggest mistake I see in founder-led sales.
Of course, the awesomeness that translates into great founder-led sales does not necessarily generalize across all sales.
Are you selling shady real estate to unsuspecting retail investors? The approach evangelized by Alec Baldwin’s character in Glengarry Glen Ross might do the job.
Selling shady stocks? Leonardo DiCaprio’s character from Wolf of Wall Street seems a good role model.
OK, you get the point. Sales best practices depend on what's being sold and to whom.
Founders realize this pretty quickly. But since they often have a distorted point of reference from pop culture of what great sales looks like, I think it can make it harder for them to recognize when they have become sales rainmakers.
What’s the big problem with a founder not appreciating their superpowers?
Actually, this can create a very serious problem. If a founder doesn’t think they are particularly good at selling, they assume their first professional sales hire will likely be more productive than them. But if the founder is actually a sales rainmaker, than inevitably their first sales hire will be less productive.
This leads to the most painful mistake I see in founder-led sales:
Not giving yourself enough credit as a sales ninja means you underestimate the challenge of hiring a sales person who can hit quota.
This founder misunderstanding means they often don’t realize that they need to invest much more in marketing and sales enablement to support a sales person who can hit a quota. Worse, the product that’s selling via founder led-sales might not be as good as the founder thinks. In other words, when the founder doesn’t realize their sales prowess, they are likely further away from PMF than they realize.
What to do? Here are some tips:
If you are a founder doing most of the sales and you are steadily growing revenue, there’s a good chance you are sales rainmaker.
So, when you bring on your first sales hire, expect lead-to-close rates and other sales productivity metrics to go down, not up.
Make sure you have efficient channels to bring in leads, as that’s usually the biggest gating factor on efficiency.
Understand that if a product has tight PMF, you will not need an amazing sales rep to close deals: the sales function will be order-taking, not rain-making.
If you haven’t yet completed your metamorphosis into sales ninja, read this great post on selling.