Building a world-class sales org | Jason Lemkin (SaaStr)

1. Be Honest About Sales Motion

Founders must be honest about whether their product requires a sales-type motion or is truly self-serve, as ignoring this reality leads to failure and missed opportunities.

2. Close First 10 Customers Yourself

As a founder, personally close your first 10 customers to understand the sales process and product-market fit, leveraging the fact that customers love talking to the CEO and you are an ‘A-plus middler’ in sales conversations.

3. Hire Two Sales Reps Initially

Hire two sales reps, not just one, to allow for A/B testing of humans and sales approaches, which is crucial for early team development and learning what works.

4. Hire Reps You’d Buy From

For your first sales hires, prioritize individuals you would personally buy your product from, as they can be trusted with precious early leads and deeply understand the product, often being ‘quirky’ or ‘romantics’ about it.

5. Avoid Early VP of Sales Hire

Do not hire a VP of Sales until you have at least two sales reps consistently hitting quota, as a VP’s role is to scale a repeatable process (from 3 to 300 reps), not to find product-market fit or be the first rep.

6. VP of Sales Must Be in Deals

A VP of Sales, especially in today’s environment, should be actively involved in deals (carrying a bag or joining calls) for 20-30 hours a week to understand the product and demonstrate commitment to selling, rather than just managing process.

7. VP of Sales First 14 Days

When interviewing a VP of Sales (or Product), ask what they plan to do in their first 14 days; if they don’t prioritize meeting customers/prospects, they are likely not a good fit as they lack customer focus.

8. Sales Rep Interview: Sell the Product

During the interview process, require sales candidates to pitch or demo your product, ensuring they have done their research and can articulate its value, as this reveals their dedication and understanding.

9. Hire Reps Whose Last Product Was Harder to Sell

Seek sales reps whose previous product was more challenging to sell than yours (e.g., more technical, less established market position), as they will bring honed skills and find your product comparatively easier, leading to better performance.

10. Pay Market Rate for Sales Reps

Pay sales reps market rate for their OTE (On-Target Earnings), typically a 50/50 split between base and bonus, focusing on their ability to bring in 3-5x their take-home pay rather than fixating on the upfront cost, as successful reps are accretive.

11. Give Sales Reps Initial Ramp

For the first quarter (max), allow new sales reps to keep a higher percentage (e.g., 100%) of what they close to help them put points on the board and gain confidence, easing their ramp-up without immediate pressure.

12. Concentrate Leads on Best Closers

In the early days, prioritize concentrating leads on your best closers rather than spreading them thin across many struggling reps, as this builds momentum, improves close rates, and fosters domain knowledge.

13. Hire Stretch VPs of Sales

For your first VP of Sales, hire a ‘stretch’ candidate (e.g., a former director) who sees the role as career growth, as seasoned VPs often don’t want to do the hands-on work required in an early-stage startup.

14. VP of Sales Must Hire Better Managers

A VP of Sales can scale indefinitely if they can consistently hire and develop managers who are better than themselves, ensuring the organization doesn’t ‘crack’ due to a lack of leadership as it grows.

15. Product Leaders Deeply Involved in Sales

The head of product (or empowered PMs/directors) should be deeply involved in sales, especially for large deals, to understand customer needs, make product commitments, and act as a ‘mini CEO’ in key meetings.

16. Give Sales a Product Budget

Allocate a specific quarterly budget (e.g., 10% of story points) to the head of sales for feature requests, forcing them to prioritize and load balance their team’s needs, reducing ad-hoc disruptions to the product roadmap.

17. Product & Sales Weekly Budget Meeting

Implement a weekly meeting between the VP of Sales and VP of Product to discuss the allocated product budget and feature priorities, fostering structured communication and preventing debilitating tension.

18. Always Ask for Next Step in Sales

As a founder or product leader in sales conversations, always end a meeting by asking for a clear next step (e.g., another demo, meeting another stakeholder), even if not directly asking for money, to keep the deal moving forward.

19. Offer Longest Possible Free Trial

Offer the longest possible free trial that remains customer-centric, as products with free editions tend to be better software due to the investment in onboarding and user experience.

20. Avoid Forcing Annual Contracts

Do not force customers into annual contracts, especially for SMBs; instead, let them pay how they prefer (e.g., monthly), as forcing annual payments can be customer-hostile and lead to churn.

21. Focus on Lost Deals, Not Just Won

Sales teams should spend more time analyzing and discussing deals they lost than deals they won, as understanding failures provides more valuable insights for improvement.

22. Earn Price Increases

If you raise prices, ensure you have added significantly more value (e.g., 30% more value for an 8% price increase) to earn that increase from your customers, rather than just raising prices without new features.

23. Be the ‘VP of Free’

As a founder or product leader, act as the ‘VP of Free’ by championing the long tail of free users, ensuring they are nurtured and not over-monetized, as they are crucial for community and long-term compounding growth.

24. Ship Three Great Things This Year

As product leaders, challenge your team to ship three truly great things this year, as shipping excellent products injects energy into the entire company and inspires teams more than anything else.

25. Be Kind to Failing Employees

When an employee fails, remember it is ultimately your fault for hiring them or not providing the right environment; therefore, be kind and supportive in their transition.

26. Attend Top 1-2 Industry Events Annually

Even if antisocial, attend the one or two best industry events each year, as they attract top executives and vendors, offering valuable networking and learning opportunities that smaller events do not.