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Kyle: He everyone, I’m Kyle Racki and this is LTV. On today’s show, I’m going to be talking to Daniel Hebert, he’s the director of sales at Proposify. This week, we’re talking about sales process: we think we have a sales process, but is it ready to scale, and at what point are you ready to scale? Listen in as we have that chat. Ok, so today we're talking about sales process, how do you build one, which is a very big question, but at what point can you begin scaling it. So, I think the traditional wisdom, if you read a lot of stuff about start ups, is that always start with one or two sales reps, ideally two, because then if both are performing really well, well that's great, but if only one is performing well, now you can actually figure out, "Okay, it is the person." You can't do that if there's only one rep. But then, at some point you need a process that you can plug people into. And we've all seen or heard of companies where it's a huge sales force. Well, you could use Salesforce as an example, right? The process is figured out. You can hire a BDR or an AE and plug them into this process and they can be successful. Building that is extremely difficult. So, where do we begin with that? What are your thoughts? Dan: Yeah. This is this is a huge topic, we could probably spend hours and hours doing this. The first piece that I look at, really, is similar to building a product, right? So you have an entrepreneur that comes up with this awesome product idea. First thing they do is not hire 30 engineers to go and build a product. So you hire one or two and you figure it out, then you hire one or two more and then you figure it out, and then one or two more, and, you know, keep going on that path. Because, if you try to go too fast when you're building out your sales process, it's just gonna break, right? Kyle: Yeah. You're not gonna have the learnings that you can get from one or two people, because now you've got 20 or 30 people that you just need to manage and make sure they don't crash into a cliff, or fall off a cliff. Dan: Yeah. Because if there's too many people involved then you're actually just focusing on managing them, right? You're like, "Oh, my reps are not hitting their numbers, I have to manage them to hit the numbers," instead of looking at, you know what? "Are doing this right? Could we do this better?" Kyle: Yeah. Yeah. So, you've already touched on that point, but, you know, in the startup world they talk about MVPs, right? Minimal viable products, which is, put, kind of, a crappy product out there into the market, test it with customers, and figure out, "Okay, what market needs this?" You know, "Who are the customers we're selling to, and what do they actually want from the product? What features do we need to build to solve their problems?" And then once you hit that, you know, the holy grail of product market fit, now you can begin scaling the company. But on a, sort of, more micro level than that, what does an MVP sales process look like? Dan: Yeah. And this is where it gets really interesting. You know, when you first start, you might have one or two sales reps that are just trying to figure it out. Kyle: And are they trying to emulate the founder? Dan: They might be emulating the founder, but what I actually saw in a number of different companies is that it's almost impossible to emulate the founder, right? Founder selling is special because you are the founder and people wanna hear from you. They're like, "Oh, this guy has this crazy idea, it's really interesting. Let me talk to him, let me buy from him." You know, most of times, your first one or two sales reps are not gonna be able to do it because they don't have that founder story, right? So, they're just out there just doing a bunch of stuff that's never gonna be able to scale, just to try to figure out, "Okay, how do we get our first million dollars?" Right? And that's kind of how it starts. And then from there, you know, somebody...it might be at this point that you hire your first sales leader, where they come in and say, "Hey, you know what? These things that our reps are doing, there's five things that happen at almost every single time. That's starting to look like a sales process. Let's go and test it out. Can we repeat it?" And if you start getting traction on that, then, "Okay. Let's hire two more people. Let's see if we can teach it to them," because that's a core part of scaling, right? Can you teach your process to somebody else? And if you teach it, will it work? All right. So go to hire two more people and try to figure it out. Is it sustainable? Is it scaling? Is it working the same way? Can you make 80% of the people that you have successful at hitting their targets? And then go out and hire two more people. Kyle: At some point you kind of need to break out your sales organization into different functions, right? You're gonna have... And it really, any industry has the concept of openers and closers, right? Like, I remember even being sold timeshares. I had the the guy that took me out to look at the different condos or whatever, you know, Disney World, and, you know, try to be my friend, and then when we're talking dollars and cents I go and talk to the finance guy who's the closer. Car dealerships are the exact same way. The person on the lot isn't the person who actually closes it. I mean, in SaaS companies and many other organizations it's a very similar concept. In SaaS we tend to talk about BDRs or SDRs, who are, sort of, like, the qualifiers or the lead generators, and then they hand it over to an AE or an account executive to close. But when you're first early stage MVP, you obviously don't have that level of layers and sophistication and specialty within the organization. So, how does that look when you start introducing specific roles within sales? Dan: Yeah. It's one of these things where it's hard to figure out, number one, like, do you break it out? Because in some industries you have openers and closers that are the same person. They're just full cycle sales reps, they're prospecting, they're working deals, they're closing deals. And in some industries that works really well. The whole concept of breaking it out is making sure that the pipeline always stays full and there are always deals happening. And I've seen sales leaders start with the BDRs and be like, "Hey, I'm not gonna hire two sales reps right now because we have no pipeline for them to close and they're gonna be sitting idle anyways. And I'm gonna figure out the BDR process, how do we prospect and then hire two BDRs, and once they're successful I'm gonna go and hire two AEs." Kyle: And if that's happening then who is doing the closing? Is it the founder or the sales leader? Dan: It could be the founder, it could be the sales leader, again, depending on their backgrounds and stuff. You know, a lot of times it is the founder because until you get to that first million in revenue, do you need a sales rep? You can probably do it with founder selling. But eventually, you need to scale to $5 million, and $10 million, and $20 million and $100 million, and that's where, you know, based on your process, your industry, you might break out into specialty roles. Kyle: I've heard it said too, and I can't remember where, that usually, founders are the worst people to ask how they got to product market fit because they don't know themselves. It's very difficult to reverse engineer the path of how you got there. Usually, you kind of feel like you just worked really hard, and now you got lucky, and suddenly people are buying what you're creating or what you're selling. And I think it's very similar that way with the sales process. If the founder's doing a lot of selling in the early days, it's...I've never come across a founder who is able to act as a really good sales leader, because they usually need to hire somebody else to, like, mine them for information and then reverse engineer it into a repeatable process or create it. Dan: Yeah. Because the whole point of building the process is you want good metrics, you want repeatability, but it's something that you can teach somebody that knows nothing about your product and potentially nothing about your industry that might be at very junior-level, first job, or a very tenured person in sales. So, you can't really translate what the founder did to any of these people, because they're not a founder, right? If they were founders they wouldn't be working for you as a salesperson. So, it's really hard to translate that. You do your best and this is where a lot of sales enablement roles come in, where they go and ask the founders their perspective on the market, or, you know, "How did you first start? Can we build that as a story, as a narrative? "Hey, our founder did this," and that's part of the demo, or the intro, or sales presentations, but you can never replicate that. So, you do need a process. Kyle: So, I remember really struggling with this as we've tried to build out a sales organization, which is quotas and commissions. Trying to figure out, and, you know, this is a broad topic, we could probably talk about this for a long time. But for an MVP... So, you know, there's the pitch and the positioning and how you demo and who you hire, that's sort of part of your MVP, but, you know, your sales reps are always gonna come in going, "How much do I need to hit in revenue and how much am I gonna get paid as a commission?" If you have no sales process, how do you create that, or what's a good place to start? Dan: Yeah. So, I would play around with leverage. So, usually, when you have a really, really good sales process figured out, you put more of the leverage, more of the risk on the sales rep. So, you pay them less money as a base salary but give them more more commission, or their total compensation, their OTE, is gonna be based mostly on commissions. When you don't have it figured out, then you, kind of, have to reverse it. You have to put the risk on the company because it's not fair to the sales rep. If they're coming in and it's like, "Hey, you're our first sales rep. We never never sold, we have zero process, we have zero resources. Go figure it out," you know, they're not gonna make a lot of commission that year. Kyle: Is it gonna be variable though? I've even heard of organizations that are more sophisticated or a little further along, taking, I think, the first three months or even the first six months and essentially paying them a commission. What do they call that, where it almost goes in like an account, so to speak? Dan: They're, like, draws. Kyle: Draws. Exactly. What are your thoughts there? Would you do a draw, like, if you're hiring your first couple of salespeople? Dan: Yeah. You could do a draw, you could do a very lucrative accelerator program where it's like, "Hey, you know what? We're gonna pay you a higher salary. Here's your commission, but if you can reach this we're just gonna double your commission basically," which is something that's mostly use at a lot of companies anyways regardless of the leverage. But you could pay a draw, there's a lot of risk in the draw, and it's usually not in the favor of the company, or not necessarily in the favor of the rep either. So, there's ways to do it. I guess, the question is how confident are you that you're gonna figure out your sales process within that period of time? And then who do you hire to do that? Because your first rep is almost more of an entrepreneur than a sales rep, right? If you have somebody that's a really, really good rep, you kind of have to look at them and say, "You know what? What were the market dynamics that you were selling into? Oh, you were in a really, really good territory, with a really, really good product, with a really, really good process? Good. You were mediocre." Right? Try to go and sell into an industry where there's zero brand awareness on the product, the product is not ready for market so you have to go and sell it anyways in a really shitty territory. If you can succeed in that dynamic, you're good for that first sales rep. If you crushed it at a big company or even a startup that's hot, you know, congratulations, you're just mediocre. Kyle: We sometimes forget that, that, you know, if you come from a big company, we always, I think founders tend to really idolize these people, like, "Wow, they were at big name company X," but they're forgetting that they were kind of standing on the shoulders of giants, right? Dan: Absolutely. Kyle: Like, they didn't build that company from the ground up, they came into something that was already working really well. And there's also sort of the idea of, like, categories of products. Like, if you're selling a CRM or a helpdesk, you're basically selling into a known product category that everybody has budget for, they all know they need it. You just now need to, which are arguably a harder job to do, is convince them why they should switch over from Salesforce or Zendesk. But when you're coming into a brand new product category, nobody has budget for it. I think Aaron Ross said that in "Impossible to Inevitable," that when his reps came back and said, "Oh, they don't have a budget for infrastructure management software." He'd be like, "Don't ever come back and say that again because this was in your training." There's no budget for this because people don't even know they need it. Dan: Totally. They don't know they had the problem, then you have to go and create the problem and relate it back to your solution, add value there. You know, when you first start that out, it's tough. So you really have to look at, you know, "Was the rep successful with hitting or crushing their quotas at previous jobs?" But also understand, okay, what were the market dynamics? How well flushed out was the process? Did you have a training team that spent six weeks onboarding you? Did you have draws to cover yourself for the first six months? Was it a good product? Were the customers very clearly articulated? Was your positioning really strong? Because if you're selling in that environment, you're probably not made for that first sales rep, or the early stage startups, because it's a very different environment than selling something that doesn't really exist yet. Kyle: I hope everyone enjoyed that chat with Daniel about the sales process. I’d love to know what you think about at what point are you ready to scale your sales process. Let me know in the comments below and be sure to hit like and subscribe so more people can see this.