To build a winning sales team, you gotta be like a magician.

'Watch as I pull quotas out of a hat, and for my next trick, watch me disappear into a pile of commission checks!'

How to Build a Winning Sales Team

• Why Read: 

  • Valuable insights on hiring, training, and managing an effective SDR/BDR team, which is crucial for a startup's sales success.

• Featuring:

  • Brian Feinstein (@brianfeinstein), Partner at Bessemer Venture Partners, Caty Rea (@Caty_Rea), Vice President at Bessemer Venture Partners, Ross Matican (@rossmatican), Content Manager at Bessemer Venture Partners

• Link: 

  • “How to build an SDR / BDR function”

Key Concepts and Tactics:

1. Here are the main points of the article with extensive quotes in the requested format:

   • Hiring the Right SDRs and BDRs:

     • Point: Hire generalist "full-stack" SDRs/BDRs initially and specialize as the business grows.

       • "Hire all-around athletes at first and specialize as the business matures."

     • Point: Consider non-traditional hires that show coachability and perseverance.

       • "Consider nontraditional hires that demonstrate coachability and perseverance. Procore, for example, found some of its best SDR hires in former teachers and military members."

     • Point: Involve AEs in defining the ideal SDR/BDR profile.

       • "Early stage companies may have AEs before they have an SDR / BDR team. In that case, you should ask your AEs what 'great' would look like in an SDR / BDR rep and get their perspective as someone who likely executed the outbound motion earlier in their career."

   • Ramping and Training SDRs and BDRs:

     • Point: Target a three to four month ramp period for new hires.

       • "Expect new hires to be at 50% productivity at the end of month two and 100% by month three."

     • Point: Teach reps to self-coach by reviewing their own calls and setting growth goals.

       • "High-performing SDR / BDR functions in our portfolio had SDRs and BDRs who would review their own call recordings and transcripts, identify areas for improvement, and set their own ambitious growth goals."

     • Point: Train reps to focus on the customer's most pressing pain point.

       • "The most common pitfall of early reps is trying to pitch the product across multiple pain points rather than focusing on a customer's most pressing pain point. Encourage new reps to work on finding one customer pain point in a discovery conversation and double clicking into that."

   • Structuring the SDR/BDR Team:

     • Point: Determine the number of SDRs needed by working backwards from monthly deal goals.

       • "To determine how many SDRs you need and what their target should be, work backwards from your monthly deal goal."

     • Point: Group SDRs/BDRs in pods with AEs to create feedback loops and seamless handoffs.

       • "Group SDRs/BDRs in pods with AEs to build feedback loops and create more seamless follow-ups on no-shows after handoff."

   • Building and Managing Lists:

     • Point: Determine the total addressable market (TAM) first, then use databases to build an initial prospect list.

       • "Use industry databases to gauge market size. In the US, you might use NAICS/SIC codes to size and segment your market."

       • "Leverage general data sources like ZoomInfo or Dun & Bradstreet, alongside industry-specific lists like association databases to build an initial list. Compare that starter list to your overall market size from Tip 15 and continue to find new data sources to build towards that overall market size number."

     • Point: Continuously build, clean, and refresh target lists, aiming for 80% data accuracy.

       • "Have SDRs / BDRs continuously build, clean, and refresh target lists. This is especially important in small markets where its critical to avoid wasting or missing potential prospects."

       • "Managers should spot check SDR lists on a regular cadence to ensure SDRs are keeping clean lists and aim for an 80% accuracy threshold."

   • Managing and Measuring SDR/BDR Performance:

     • Point: Align incentives with desired outcomes, avoiding purely activity-based goals.

       • "'Show me the incentives, I'll show you the outcome': Avoid measuring SDRs and BDRs on activity-centric goals like number of calls as this can incentivize low quality pipeline creation."

     • Point: Track key metrics like dials, hold rates, connection rates, demo show rates, talk time, meetings booked and pipeline.

       • "For SDRs, measure:

         • Dials, hold rates, and connection rates: This will measure how many attempts it takes to reach prospects and generate high-quality leads.

         • 'Demo show' rate: This will measure how effectively your SDRs / BDRs convert leads.

         • Average talk time: This will measure if SDRs are taking up too much airtime in prospect calls. Generally aim for a 50/50 split, especially on cold calls.

         • Meetings booked and pipeline: This will measure pipeline strength. SDRs might have ~20 meetings per month."

   • Providing Career Growth Paths:

     • Point: Aim to promote a high percentage (~80%) of SDRs/BDRs into AE and other sales roles.

       • "Our best-in-class SDR / BDR functions saw up to 80% of SDRs and BDRs promoted to AEs and other sales roles."

     • Point: Hire SDRs/BDRs with the potential to become successful AEs.

       • "Given the ~80% goal of promotion to AEs, you want to hire SDRs / BDRs with an eyes towards whether they could also make great AEs. Said another way, an SDR / BDR program won't be successful if they only create great SDRs / BDRs rather than SDRs / BDRs who matriculate into being AEs."

     • Point: Pair SDRs with AE mentors for coaching and career guidance.

       • "Pair SDRs with AE mentors for coaching and career guidance. Pair them by cultural fit, not performance."

The Real Reason Founders Should Vest

Why Read:

• Essential guidance on managing co-founder equity and departures.

Featuring:

• Jason M. Lemkin (@jasonlk), Trusted Advisor at SaaStr

Link: 

• “Dear SaaStr: Should Founders Start Their Vesting at Date Of Incorporation So They Have Vesting Prior to Raising VC Capital?”

Key Concepts and Tactics:

• Here are the main points of the article with extensive quotes in the requested format:

  • Understanding the Purpose of Vesting:

    • Point: Recognize that vesting primarily protects committed founders from less committed ones, rather than protecting founders from VCs.

      • "We think 'being vested' protects us from VCs. Yes, there can be some corner cases where that is true, I guess. Maybe. Some rare times. But what vesting really does is protect the most committed founders from the least committed ones."

  • Dealing with Cofounder Departures:

    • Point: Be prepared for the possibility of one or more cofounders not working out and leaving the startup.

      • "Most startups I've worked with, one of the cofounders doesn't work out. The usual reason is he or she isn't just as committed as the others. Startups are hard."

    • Point: Avoid situations where a less committed cofounder leaves with a significant portion of the company's stock.

      • "And this less committed founder often leaves just when it's getting good. And often walks out the door with way too much stock."

  • Allocating Equity Fairly:

    • Point: Ensure that the cofounders who stay and do the hard work have a significantly larger equity stake than those who leave early.

      • "The last thing you want, just as you are finally getting paying customers, just as it's finally working … is the 2 co-founders doing the real work each owning say 25%. And the one cofounder that checked out a while ago owning another 20%. Just think of who you could hire, and what you could do with that 20%. You could hire 20 great VPs with that. 40 great directors. You could redistribute it to so many folks killing themselves to make it happen for you."

  • Implementing Longer Vesting and Cliffs:

    • Point: Use longer vesting periods and cliffs to protect the founders who are committed to the long-term success of the startup.

      • "Longer vesting, longer cliffs, protect the founders going long. The real founders."

  • Being Fair to Departing Cofounders:

    • Point: Provide departing cofounders with a fair equity position, but significantly less than those who remain and do the heavy lifting.

      • "The cofounders that quit early should have good equity positions — be fair. But they should have nothing remotely like the ones that stay on and do the heavy lifting."

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