How I Screwed Up Sales Hiring

I founded Moonshine back in 2022, together with Manjunath, another engineer and researcher. My entire career up until that point had been working on consumer products, so I felt very comfortable with how those are sold, and I thought to myself “How hard can B2B sales be?”. The answer, of course, is very hard!

My investors knew that before I did, and pushed me to hire a senior sales person to make up for my lack of experience. It’s taken me three years and multiple failed attempts to build a working sales team, mostly because I didn’t even know enough to ask the right questions. The biggest mistake I kept making was hiring people with ten or twenty years of enterprise sales experience. This wasn’t because they were bad at their jobs, everyone who made it through our interview process had done amazing things at larger companies, but I set them up to fail at my startup. Here’s why:

Startup Sales aren’t Enterprise Sales

Experienced sales people are used to being given a list of qualified leads, a clear set of sales materials, and in general a “repeatable sales motion” that they can follow to close deals. There’s a whole world of Sales Development Representatives (SDRs) who handle finding and qualifying leads through cold-calling, linkedin, searching the web, etc. These are junior roles that hires new to sales are given when they start, and people who want to focus on sales usually graduate from them within six months to a year.

Any sales person with experience won’t have had to generate their own leads for a long time, they’re used to having a team behind them. Even if they’re willing to roll up their sleeves and commit to what’s consider a low-status job, they won’t have a good idea of how to do SDR for a novel product.

Startup Incentives are Long Term

One of the best sales people I met described himself as “coin operated”, and the usual incentive structure is set up to reinforce that attitude, since sales people make most of their earnings through commissions on a quarterly basis. This isn’t a good fit with an early-stage startup because you’re probably going to be making proof-of-concept deals initially where the time to close is uncertain and the revenue is small. A 10% slice of that isn’t interesting compared to the steady, large income stream they get at an established company. The alternative is setting up performance-based bonuses (for example $x for each paid pilot signed) but even that is unlikely to be a very compelling amount for them.

The hope of course is that you can convince candidates to focus on the stock they can earn, but coming from a world where incentives are liquid cash they get within a couple of months, it’s a hard perspective switch to make. They’ve chosen comparatively low-risk compensation for years, why are they going to change now?

Market Discovery

If there’s one thing I’m certain of, it’s that you won’t end up selling to the companies you thought you would at the start. As you learn more about your product and people’s needs, you’ll inevitably adjust who you’re targeting. This is a problem because most senior sales people have a lot of experience in a particular industry, but those skills aren’t portable. They may know the customer needs and have warm relationships with key players in one market, but when your startup changes focus they’ve lost all of those advantages that they’ve spent years building. Even changing the sales model within a single industry will have a big impact on their effectiveness. Someone who has spent years doing high-touch, long sales cycle engagements is going to be starting from scratch if you move to self-serve subscriptions.

So, What Has Worked?

If hiring established sales leaders didn’t work for us, what has?

The first thing I had to learn was that a lot of the work I was thinking of as sales was actually business development. Closing deals is a job for sales, but there will be a lot of other steps before that, like figuring out which role in an organization to reach out to, developing materials, finding conferences where decision makers attend) that are much more about BD. Think about hiring someone with those skills first, before you get a sales person.

What worked for us was finding somebody super-keen who has a business background, but was early in their career, and willing to take on the time-consuming BD work with a song in their heart. The feedback has been that it’s great experience for them, and a lot more interesting than most MBA jobs at that level.

You should also prepare to spend a lot of time on sales yourself. The first few sales are going to be founder-led, and there’s a lot to learn to be successful, so take it as a serious time commitment. Customers prefer talking to founders over salespeople. Founders know the product better than anyone, can answer technical questions, and bring the passion. If you can get to the point where there’s a license to be closed, you have a much better chance of making it happen than anyone else in the company.

Happily you don’t have to go it alone. Good advisors can be incredibly helpful in figuring out domain-specific and process-related questions, as well as being able to introduce you to the people you should be talking to. Find someone who’s got a lot of experience and contacts in the industry and get them excited about what you’re doing, they can be a massive help. A lot of good later-career people are bored because their job is no longer as challenging, so they can be surprisingly open to taking an advisory role for equity. Think about people like lawyers in your field too, they are often very well connected and will know a lot about the actual sales process.

There’s so much inertia at most companies, cultivating champions within your target companies is the only effective way I’ve found to make things happen. You need someone who’s willing to be a pest on your behalf to avoid getting stuck in an endless sales purgatory. To get that level of engagement you have to make sure they feel included in your decision making and invested in the success of your startup. One way is to set up an advisory board that includes any promising champions, that way they get bragging rights if you succeed, they can network with other key industry people, and you can give them an advisory stake too, as long as that works ethically.

I’d imagine that having another founder with good sales experience would have save me learning a lot of these lessons the hard way, but if you’re starting with a technical team, resist the urge to bring in somebody to “handle sales”. It’s so critical to the existence of your startup, it’s not something you can hire your way out of. As CEO, getting those early sales across the line has taken up the majority of my time, even more than product direction and hiring, and I wish I’d embraced that earlier. There are a lot of ways to get help from other people, but at the end of the day only a founder can close those crucial deals.