/ Startup

Do you really need a sales team?

Highrise buildings

I joined Stack Overflow (SO) back in 2011 when the company employed only 2 sales people in New York City. SO now runs a sales machine of over 120 people spread across 3 offices — New York, Denver and London. Direct sales has been the main lever of (revenue) growth for SO. As the company’s first European hire I was directly responsible for scaling the EMEA sales office and played a key role in building the overall sales machine.

Building such a large sales force (in a relatively short period of time) is not an easy task. We did a lot of things right and of course got a few things wrong. During my time at SO I got the opportunity to work with some incredibly smart people and learnt some invaluable lessons, which as an entrepreneur and a company builder, I am always happy to share. I mentor at a number of startup accelerators and often find myself discussing similar topics with founders and/or sales leaders looking to build and/or scale their teams. Over the last couple of years I’ve noticed that most companies I speak to tend to struggle with the same things, so thought it would make sense to share my experience here, in the hope that it could benefit more people than just the ones I get to talk to over coffee. With that in mind, most (if not all) of the posts on this page going forward will focus on practical advice related to building, scaling and managing high performing sales teams. If this is an area you’re interested in, feel free to start following this publication or join our mailing list.

Now…on to business!

Before we get into the basic essentials and harsh realities of building a sales organisation, let’s answer a very simple question:

“Do you even need a sales team?”

Seems like a silly question, but it’s definitely one worth thinking about before you commit to building a sales organisation. A good starting point is to consider your options. Broadly speaking, you have five choices when it comes to growing your business:

  1. Paid Acquisition

  2. Virality

  3. SEO/Content/Social

  4. Sales

  5. Business Development/Partnerships

There is a good chance that not all of the above levers of growth are applicable to your business. Even if they are, you may not have sufficient resources to explore all five. The decision of how to choose the best channel should really boil down to two things — time and efficiency. If you’re a “land grab” business such as Stack Overflow Careers (SOC), time is absolutely crucial. While I would not go as far as saying the engineering jobs market is a winner-takes-it-all play, there are obvious advantages of getting big fast and becoming the dominant force in the space. With that in mind, direct sales was the obvious choice for Stack Overflow Careers. Content and Social are also highly effective in the Talent Acquisition industry, and indeed play a big role in SOC growth strategy nowadays. However, it takes much longer to start seeing significant results from a content strategy, which is why SO chose to invest in direct sales first.

Now let’s talk about efficiency.

An old friend of mine recently got in touch to ask for some advice on how to approach building a sales team. He’d been working on a new startup for about a year and believed he’d found product market fit. Next step — start scaling the business.

They had decided to settle on direct sales after running a few ppc campaigns and concluding that while “it worked”, the cost of acquiring new users was too high.

That’s fair enough, but after a short discussion it became apparent that direct sales was also not going to be an efficient (or indeed plausible) way to scale the business. According to his calculations, a salesperson would be expected to close at least one hundred deals a month, which to most sales folks already sounds like mission impossible. Furthermore, because of their relatively low price point, even if a rep managed to close the 100 deals, their commission would be pretty low. Besides poor management, there is nothing more salespeople hate than unrealistic targets and limited earning potential. With that in mind, hiring (and retaining) salespeople would be challenging at best.

In conclusion, while there are certainly a lot of advantages to building a strong sales team, especially if you are a “land grab” company, the numbers need to add up. The “back of the envelope” maths of “ x number of people, selling y number of deals per month” is useless, if the underlying assumptions are flawed.