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November 2021

Sales in the Early Stages: Proven Advice for Getting It Right

For early-stage companies, there's nothing more important than developing a winning go-to-market strategy. In this series, we’re sharing hard-won advice from the Canvas Go-to-Market Council, developed from the lessons members have learned over the years. Check out our first post about how to build your company’s growth engine, and follow Canvas on LinkedIn to ensure you see all the latest  insights from the Canvas GTM Council.

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In a startup’s early days, the Founder and the Head of Sales are one and the same. That’s a win-win: prospective customers hear the company story straight from the source, and founders get time on the front lines, which is critical to evaluate product-market fit. 

But eventually, companies need to scale, and the Chief Executive doesn’t have time for all of the selling anymore. Enter: a sales leader. Hiring the right person and building out a solid sales motion is easier said than done. That’s why we brought in the experts to share their best advice about how to get it right.

LEARNING FROM THE BEST

Tony Small and David Gee have had a front seat at several companies as they built best-in-class sales organizations.

While he originally started his career in product and engineering, Tony Small joined the go-to-market side of things at Amazon, where he worked in Sales Operations. Later, as an early employee at Zillow, Tony grew their sales team from 75 to 1,000 and led the team through Zillow’s IPO and the acquisition of Trulia. Tony went on to lead Revenue at Convoy and Pro.com and is currently the Chief Business Officer at Wiliot.

David Gee built his career in software and security. As part of the management team at HP, David tripled the company’s revenue on the software side. A self-described “serial CMO,” David ran the go-to-market at Infoblox, Zuora, and Imperva and has shepherded several companies through IPOs. David is currently the Chief Marketing Officer at Coherent.

Tony and David recently co-hosted a session for Canvas portfolio leaders where they shared advice for kick-starting a sales motion geared to set early-stage companies up for growth.

5 PIECES OF PROVEN ADVICE FOR GETTING YOUR SALES MOTION RIGHT

You might think: “I'm creating an entirely new category.” 

Think again: Creating a new category is expensive and time-consuming. Instead, tap into an existing category.

“What you hear a lot of is: ‘this is a brand new category. Absolutely, we are going to stake our claim, put our flag on the field, and it's going to be a brand new category.’ There are no new categories. I hate to break everybody's spirit on this. But it's really, really hard to create a new category. It's way better to jack an existing trend. It is easier from an expense standpoint and it’s easier to get eyeballs on what you're trying to do. It's much better to find a space which has an obviously fun, interesting, addressable market and do something better and different – but still in the category – than convince an established buyer, particularly in the enterprise space, to go do something net new. “ - David

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You might think: “No one on my team would ever cheat in order to game a comp plan.”

Think again: You might be surprised. Create an iron-clad comp plan that doesn’t even allow room for funny business.

"People cheat. It's a little weird. A lot of people are surprised by this, and they kind of learn this the hard way. But, if you have an organization of 10 to 20 salespeople, and you have a way to cheat the comp plan, some people will. To prevent cheating, spend 30 minutes or an hour when your comp plan is designed and put on your evil, scheming hat on. Say ‘if I was going to cheat this comp plan, what would I do?’ If it's cheatable, some people will eventually cheat it. So just make it not cheatable. The simplest way to do that is to pay based on revenue earned, because a salesperson is not going to want to cheat if they have to pay the company ten dollars to earn one. You really want to make sure the comp plan is based on actual money going to the company.” - Tony

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You might think: “We’ll price low at first and then increase it.”

Think again: It’s easier to start with a high price and walk it down than to start with a low one and walk it up.


“I guarantee you’re underpriced. Every time I look at what we have historically priced in the companies that I've worked at, we price at what we think the market will bear versus the price that we want to stick for value. Building a good, better, best pricing model is one of the hardest things to do early on and it takes a ton of experimentation. If you're going from freemium to paid, start with a high price, because it's much easier to start with a high price and walk it down than to start with a low one and walk it up. If you have a SaaS model, and you're taking a ‘land and expand’ approach, start with a high price and then grow into your expansion. If you don't have that upward pressure on price, then your ability to hire, create an ASP model and compensate appropriately will create a big headwind.” - David

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You might think: “I need someone who can sell, sell, sell.”

Think again: You actually need a strategic partner, not just a straight up salesperson.

“In your first sales hire, you really need someone who is going to be strategic partner with you on the company direction, because they are going to be the front lines to your customers and are going to provide the best information on product roadmap, pricing, and a lot of other strategic decisions. So don't assume that someone who's a really good salesperson on paper who has proven that they can sell before is the right first good hire… if they’re not on the same wavelength as you, if you feel like you talk to them about the product details and company strategy and it goes over their head, you're making the wrong decision.” - Tony

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You might think: “My sales leader will manage my early marketing hires.”

Think again: You could limit your talent pool with this approach.

“Marketing should never report to sales... because you want to keep sales and marketing separate in a couple of foundational and important ways. Marketing is responsible for getting the message out and building awareness, consideration, and preference, and helping to build a pipeline. But they don’t execute the pipeline. That's where the line in the sand is drawn. And if you want to have development opportunities, to hire a VP above the director, a CMO above the VP,  the talent pool that you will have access to, if it reports into sales from day one, will be severely limited.” - David

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The Canvas Go-to-Market Council is a select group of marketing leaders sharing their hard-won expertise at early-stage companies. Learn more on the GTM council page and follow Canvas on LinkedIn to stay in the loop.

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