Startup sales isn’t classic sales.
Startup sales combines product development, marketing, rev ops, HR, customer success, and sales.
Startup sales is building the glider when you’ve already jumped off the cliff.
We wrote this guide for those of you feeling the wind in your hair while you try to stick the wing back on.
Whether you’re a startup founder doing founder-led sales or a first sales hire building a brand new team, we’ve gathered tips from successful startup sales leaders and founders who’ve been there, bought the t-shirt, and gone on to greatness.
What makes startup sales different?
Startup sales is nothing like selling an established product, says Pete Prowitt.
He should know — he moved from a sales role at the well-known brand Box to joining Intercom as one of the first five sales reps and helped them grow from $1m to $140m in revenue in five years.
“It's a combination of the scrappiness, and just figuring out how to get things done, and doing things that don't scale.”
Series A startup sales is entirely different from the usual sales game:
Everything you do matters
One of Pete’s favorite things about early-stage sales:
“Everything you do has an outsized impact. Everything you do, from hiring a person, to setting a culture, to setting a performance bar, to reinforcing that performance bar, sets the table for the next 3, 6, 18 months.”
Sales = Product = Marketing
When selling a new product, there isn’t a clear division between sales, product development, and marketing.
Instead, part of your sales goal is to capture prospect feedback and use it to refine your offer, your ideal customer profile, your product, and your messaging.
Angel investor and founder Matthias Hilpert says startup sales is “mostly about establishing a continuous feedback loop between your business model, your product, and your customer.”
You’re building the sales process at the same time
Startup sales is about testing what works and then using that information to build a standardized sales motion over time. And to quote Steli Efti, the co-founder of Close:
“This is time-consuming and requires a lot of trial and error, but it also means the team can build a process that reflects its unique needs and sales goals.”
Sales tips for founders
Even if you’re an experienced seller, building a sales process from scratch is a challenge. Here are a few tips to help you get some quick wins:
1. Pick one (or max two) sales motions
By sales motion, we mean your approach to sales—the steps you take to close a deal. It's a good idea to get really good at one before you add another.
Not sure which way to go? Here are some recommendations from Sid Khaitan, a senior product marketing manager who has helped bring global brands and products from $1M to $50M+:
- Do you have a young sales team and/or a relatively low-cost product? Go with land and expand. It’s easy to set up, and your team doesn’t need to be product experts. Just get them prospecting and closing small deals — then upsell or cross-sell once you’ve proved the value of your product.
- High ACV? You’re going to need some kind of enterprise sales motion. Think customized demos, AEs with deep product knowledge, customer visits, and hosting specialist events.
- If you’re looking at a wide total addressable market (TAM), then product-led sales may be the best place to start — although it will require expertise, the right tools, and plenty of time to make it work (more on that below).
- If you have a complex product requiring extensive implementation support, starting with channel sales through a network of implementation partners might be your best bet.
📖 For more tips on sales motions, check out Sid’s guide, “Sales Motions: How to choose the right one for your startup”
2. Figure out your balance of sales vs. product-led
Even if you’re fully sales-led or all in on PLG, you need to lay the foundation for your long-term GTM strategy as early as possible.
No PLG?
Marie Gassée, who built the self-serve motion at Box, is blunt. If you think you’ll ever want to drive leads through a free trial or freemium model, then the time to start building that PLG motion is right now:
“What I tell folks who are a little earlier on, I'm like, do it now. It's so horrible to do it later. Just take a little bit of pain now… Just do it now when you're series A, maybe, and have 100 employees. It's going to be so much less painful to get some sort of structure now than doing it in two years when you have to unwind a bunch of legacy crap.”
No top-down sales?
You might want to think about adding a top-down sales team sooner rather than later, says Dock’s CEO and co-founder, Alex Kracov:
“When I started Dock, I was obsessed with product-led growth. I wanted to build a company without salespeople and make money while I slept.
“We still think of ourselves as a product-led company, but we’ve found that having a sales team is absolutely essential to our success. In fact, once we shifted to a top-down sales motion, our revenue skyrocketed.”
Instead of sticking to pure PLG, Alex now thinks of product signups “as lead generation, but not revenue generation.”
If a product-generated lead looks like our ICP (in terms of company size, title, industry, and product usage), we’ll aim to book them for a call with the sales team.
“By introducing sales into our process,” says Alex, “we’ve increased our average contract size by 6x and have started to close some sizable deals.”
📖 Read more about the product-led growth spectrum in our article, Product-Led vs. Sales-Led Growth: How to strike a balance
3. Don’t waste time
Former founder and Director of Sales at Close, Nick Persico, warns founders about the two biggest startup sales mistakes you can make:
- Wasting time of massive deals that won’t ever close: “Don’t waste your time trying to close one massive deal if it’s killing your productivity and distracting you from everything else,” he says.
- Giving away free pilots: You can only learn about product-market fit from paying customers, warns Nick. So don’t give your product away for free. “Selling something for money is a true benchmark of whether what you’re selling is valuable.”
📖 For more sales pilot tips, check out our Sales Proof of Concept Playbook.
4. Document everything
Peter Kazanjy literally wrote the book on startup sales — Founding Sales: The Startup Sales Handbook. A three-time founder and founder of the community Modern Sales Pro, Peter advises every founder to document and record their sales process:
“When you’re making assets for yourself, you’re also making the assets for your future sales team.”
That way, when you’re ready to make your first hire, you have a well-documented sales motion and the tried-and-tested assets to go with it.
“A lot of founder sellers skimp on documentation,” warns Peter. “But having a demo flow in your head is not great. You should have it documented, even if it's just bulleted out.”
5. Sell value, not features
As a founder, you’re so close to the product that you can fall into the trap of trying to sell the client on features. That’s an error, as Alex realized:
“As the founder (and person building the features), I spend too much time showing off all the cool things Dock can do. I’m proud of the features and want to show it off. I’m also eager to get feedback around features to see what we can improve and what’s missing from the product.
“But I’ve learned this is the wrong way to do sales. When I feature sell, I’m too focused on myself and my product instead of the customer.
“Buyers don’t care about features. Buyers care about outcomes.”
📖 Want to learn more about selling your prospects on value, not features? Check out our guide: Value-Based Selling: 9 tactics for executing this hazy framework
6. Don’t go too wide too fast
As a founder, you may be used to painting the big vision to engage VCs. But, once you sell to customers, that’s a terrible approach.
For instance, Dock is a product that could work well for any business that works closely with clients — so… basically everybody.
But we quickly realized it would make much more sense to niche down to revenue teams who would get the most immediate value from our product. That way, we got:
- Specific customer feedback that we could realistically action as a small team instead of trying to please everybody
- Much clearer messaging — it was far easier to articulate what we do and for whom
- Easier positioning — niching down meant we could articulate what we do differently within our specific category.
Robby Allen agrees. He joined Zenefits as an early sales hire before going on to build them a 250-person sales team. Today, he’s the CRO of AgentSync.
His take is that founders “overestimate the TAM of the initial product-market fit that you might have as a company, where it actually might be more narrow than you anticipate.”
His advice is to think of product-market fit as a constantly evolving process, which you’ll refine as you grow.
📖 Want more sales tips for founders? Take a look at our guide, 7 Tactics to Make Founder-led Sales Your Unfair Advantage
When should you hire a sales team – and who should you hire?
Many founders are keen to bring in a sales hire as soon as possible so that they can focus on the million and one other things calling their attention. Peter Kazanjy says that’s a mistake.
He advises founders to hold off hiring an SDR or VP of Sales until they’ve done at least 50 sales demos and have a win rate between 15% and 25%.
“If one out of five of your first meetings turns into a deal, it's pretty solid.”
Getting to that point involves a lot of trial and error as you refine your pitch and messaging, tighten up your positioning, and build your assets, says Peter.
“While you're doing those at-bats, you're like, ‘Oh, man. You know what? People get confused when I talk about this slide. I need to fix this slide,’ or ‘Oh, maybe I'm actually going to change the order of the deck.’
“Then you get it to the point where you're like, ‘Okay, this is pretty tight. I know that if ten new opportunities come into the pipe, I'm probably going to close one or two of them.’ At that point, now you say, ‘Okay, great. This now feels like it's package-able.’"
So that’s the When — when you’re hitting a win rate of one in five, and you’ve defined at least the beginnings of a standardized sales motion.
Next comes the Who.
Should you hire a Head of Sales or an AE (or AEs)?
Jason Lemkin, the founder of Saastr, recommends hiring sales reps first. The reps are there to replicate, test, and improve the sales motion you defined as the founder and to refine your product-market fit.
Then, once you’ve hit $1m-$2m ARR, you’re ready to hire a VP of Sales to “accelerate an engine that’s working, albeit at a very small scale.”
Tips for hiring your first sales rep
Ready to bring on SDRs or AEs? Here are a few best practices:
Wait until your ACV is at least $3,000
To justify the expense of a sales rep, they need to be able to make significantly more in sales than you’re paying them (obviously!) And that becomes nearly impossible if your ACV is too low, points out Tomasz Tonguz, a venture capitalist:
“Let’s take the example of an inside sales account executive with a $500k annual quota. At a $500 price point, that AE would need to sell 1000 customers per year, 83 per month, 4.2 per working day. There are some amazingly productive salespeople, but those velocity figures are stratospheric - and unrealistic.”
He advises “field sales teams on accounts that are $3k+ because the velocities are sustainable and the quotas are attainable.”
Start with two reps
More classic advice from Jason Lemkin: Don’t hire one rep—hire two.
His logic is that if you hire one rep, you won’t learn anything. If they do well, you won’t know why. Is it because you’ve nailed your messaging? Is it just because they’re an amazing rep?
And, if they do poorly, you also won’t know if it’s your fault or theirs. You need at least two to test your sales motion effectively.
Hold off until you really need more
As CRO and then CCO of Flexport, Ben Braverman grew their sales from zero to $2 billion in run rate. His advice is to hold off on hiring more reps until your existing team is overwhelmed:
“You should not add reps to the team until their calendars are jammed. Your reps should be coming to you screaming, ‘I have too many leads. I'm not closing enough business because I'm so spread out.’
“If they're not doing that, it means that their days are actually pretty empty.
“It means that anybody you have that is effective is actually being underutilized. And it means that whoever you add to the team is going to be particularly dilutive because they're going to be taking leads away from people who are already ramped up, who actually have capacity to work more.”
Stay hands-on
“‘Micromanage’ is the dumbest word ever,” says Peter Kazanjy. You should expect to invest a lot of time onboarding your new sales reps:
- First, they should shadow you while you sell so you can explain how your process has evolved and why you sell your product the way you do.
- Then, they should do mock calls where you pretend to be the customer.
- Then they start doing customer calls, with you riding along.
“If you don't actually authenticate that the person can reliably execute your ‘recipe,’ if you don't do any of these steps, you're opening yourself up for all sorts of terrible hurt," says Peter.
Tips for hiring your first VP of Sales
Once your first two reps are working out, you’re ready to hire a VP of Sales to take you from 3 to 300+ (hopefully!).
Here are a few expert tips for finding the right sales manager:
Hire a builder, not a closer
The main job of your sales manager is not to sell — it’s to enable other people to sell. So you need someone strong on processes, systems, and coaching rather than a superstar salesperson just there to close deals.
Todd Busler, the former first sales hire at Heap, recommends you look for “someone who is really comfortable with ambiguity, comfortable with trying a bunch of different ideas where you know a high percentage of them aren't going to work, and someone who is really good at documentation.”
Look for relevant experience (not just sales experience)
Jason Lemkin advises founders to look for a VP of Sales who has:
- Built a team and hired reps before (because that’s going to be more important to the role than selling)
- Sold at your price point before (because there’s a huge difference between selling a $3000 product and a $300,000 product)
Look for a bias toward action
2X founding AE (now GTM lead at Open AI) Conor Dragomanovich also cautions that you don’t just want a builder—you also need someone who’s good at getting things done.
“There's plenty of folks out there who you can hire that are very tactical and are really good at building things. But that's all they really want to do, and they will get really obsessed with what that thing is and incapable of moving on to the next problem.”
Instead of a perfectionist, he advises founders to hire a first sales rep who is a “bit of a micro-operator”—a natural seller who also has “a bias towards action, where you know that you can set them loose with very little oversight and that they will either come to you with problems, or they will come to you with the problems that they have solved.”
Choose someone willing to get their hands dirty
Tushar Makhija was Airbase's first go-to-market hire and eventual VP of Sales & Success. Today, a founder himself, he recommends you look for someone ready to dive in where they’re needed:
“The first sales hires usually cannot be only focused on selling. They have to be focused on messaging, and they have to be ready to get their hands dirty.
“I am that kind of person. If you restrict me, I'll get annoyed. I want to attend product meetings. I want to attend anything that we're doing with marketing. I want to write the sales email. I want to be part of how the deck has been made.”
Sales strategy tips for a founding VP of Sales
If you’re joining the team as the first sales leader, here are a few pointers from people who’ve done it before:
1. Set the right tone
Early-stage sales can get rough, and cold calling isn’t usually the best job in the world. As the sales leader, you must prioritize creating a positive sales team culture.
Pete Hancock was one of the earliest sales hires and the 20th employee at Yelp.
He remembers some aspects of the Yelp culture that played a big part in helping the then-startup grow from $1m in revenue to over $750m:
- A strong emphasis on feedback: “If you were a manager, you were giving feedback all day. If you were a rep, you were getting feedback all day. It was almost like a coaching, sports-type environment.”
- A focus on positive collaboration and small groups: “You felt like you were a part of this little 10-person team going to work each day and supporting one another.” The sales team was broken into smaller units, each with a sales manager promoted from within. Each unit had its own culture, decorations, and even songs that reinforced a shared identity. “People lifted each other up,” Pete recalls.
2. Templatize your sales process
Aim to make your sales process repeatable and standardized as quickly as possible, by running brief experiments at each stage of the funnel to see what works best.
📖 For a complete guide to optimizing your sales funnel, take a look at Optimizing the B2B Sales Cycle: How to shorten each stage
Document your sales motion, and couple it with customizable templates that everyone should be using. For example, these are the exact email templates that our founder and CEO, Alex, created to follow up with inbound leads if you want to steal them.
3. Standardize your demo follow-up with a deal room
Instead of sending prospects endless emails after a demo, set up a personalized deal room during the call, like Andrew Hollis, Director of Sales at Nectar. This simple process change has increased Andrew’s team’s win rate by 31%.
They use Dock’s sales rooms to create a templated follow-up workspace complete with demo videos, slides, testimonials, pricing information, proof of ROI, product screenshots, and other supporting sales collateral.
Then, before each demo, they quickly prepare a personalized copy of the workspace for the prospect so that they can introduce the workspace during the call. All their demo follow-up happens in that workspace instead of over messy email threads.
“ We do pretty quick demos. It's not very complicated software,” said Andrew. “But in the last four or five minutes, we say, ‘Hey, here's everything I've already prepped for you. Everything we've already discussed is gonna live in here now.’”
4. Nail the sales-to-success handoff
If you want to win renewals, you’ve got to take a proactive approach to the customer handoff to CS.
In sum, the handoff shouldn’t feel like a handoff to the customer — it needs to be a single, seamless interaction with your company, from the first point of contact to onboarding and beyond.
This step is harder to do in a startup when you don’t have a fancy tech stack or a lot of people to help steer the customer gracefully through the process — but it’s certainly not impossible. We wrote a comprehensive guide on how to nail the Sales-to-Customer-Success handoff, but here are some highlights that you can put in place right now:
Bring a CSM into the deal early.
This means they can start building up a good customer relationship before the sale and also means you show off the great support the prospect can expect (which can help close the deal).
Bring the AE into the first post-sale customer meeting.
That way, you keep that sense of continuity and partnership going.
Use Dock to transition customers from pre- to post-sales.
Our workspaces can easily be converted from a pre-sale deal room into a post-sale onboarding space, so the customer doesn’t have to learn a new system. Plus, CS will have all the info they need about the deal (the customer’s pain points and priorities, the mutual action plan, and so on) at hand.
That’s what our customer, Two Front, does.
Ingrid Murra, their founder, uses Dock to present case studies and sales collateral to their prospects. Then, when somebody buys, they transition the workspace into an onboarding portal where their customers can walk through implementation as a step-by-step checklist.
Their biggest unlock has been the ability to track whether customers were accessing the portal. Ingrid, their founder, remembers that before Dock, “I was just like calling them up, being like, ‘Hey, how can we help? I don't know why this isn't working for you.’”
Now, with Dock, not only are customers finding the onboarding process easy, but Two Front can immediately see where they’re stuck.
📖 Learn exactly how Two Front's founder achieved 30% MoM growth with Dock
Startup sales metrics you should be tracking
Peter Kazanjy advises startups to pay attention to three sales metrics:
- Win rate — tells you whether or not people care about the problem
- Average selling price — tells you how much they care
- Renewal rate — tells you whether you delivered on your promise
In his words, all three must be healthy to "earn the right to live another day."
There are a few more sales metrics you might want to start tracking sooner rather than later:
- Closed-lost reason — why you lost the deals you lost
- Average sales cycle length — shorter sales cycles indicate higher sales confidence and sales team member efficiency
- Sales team activity metrics — like messages sent, leads created, calls made. Quantity doesn’t always equal quality, but activity metrics can help you identify sales patterns.
- Qualified pipeline — Number of qualified opportunities x estimated ACV of each opportunity
- Pipeline velocity — how fast deals move through the pipeline (Win rate % * Average Contract Value * # of Qualified Opportunities)
- Conversion rate by funnel stage — e.g., MQL to Opportunity. It tells you where people are getting stuck in the funnel.
- Market penetration—how many customers you have compared to the total size of the market
📖 For a complete guide to all the sales metrics you should be tracking as you grow, check out The Sales Monitoring Guide: Lessons for Growing Startups
Startup sales software
Ready to build your sales tech stack? Here are our recs for startups:
Go with a free CRM to begin with. You probably don’t need Salesforce at this stage because you’re not focusing on scale yet. Options for a basic free CRM tool include:
Add point solutions for each step of your sales process as it develops. Most of these have free or single-user plans to start you off:
- Loom for recorded demos
- Calendly for meeting scheduling
- DocuSign for contracts
- Outreach for outbound emails
As you hire reps, you’ll also need some sales management tools. For instance:
- Gong to record and analyze sales calls, improve team productivity, and start sales forecasting
- Chilli Piper to qualify leads, route them, and schedule meetings
- Dock to standardize and up-level your demo follow-ups with interactive deal rooms
- You may also want to upgrade your free CRM to a more robust option, like Salesforce, Hubspot, or Pipedrive.
Learn from sales leaders who’ve been there
If you want more tips from sales leaders, founders, and first sales hires who’ve built successful sales functions from scratch, you might want to check out our podcast, Grow & Tell.
You’ll find unique insights into going from first sales hire to VP of Sales at a billion-dollar company. Or what it’s like to hand over the sales function you built from scratch, by yourself, to another person. Or what it’s like to scale a sales team from 1 to 250 in 2 years.
Plus, we have the world’s catchiest jingle. You’re welcome, and/or we’re sorry.
Find it all on our website or wherever you find your podcasts.
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