It’s not sustainable for founders to lead every key sales call forever. But moving away from the founder-led sales approach that delivered your initial revenue can be tricky—even a brief dip in growth could wreak havoc on your plans and spook investors.
To successfully hand off the sales function, you need a plan to codify your process, establish your funnel, hire the right talent, measure and incentivize them, and build a positive sales culture.
SignalFire mentor and Stripe Chief Business Officer, Jeanne DeWitt Grosser, sat down with our founders and sales leaders to explore ways to problem-proof the transition. Jeanne has deep experience leading sales at Stripe, Google, and Dialpad. This is how she tackles evolving the sales motion.
Moving from founder-led to sales-led: The first steps
It’s important not to move to sales-led too quickly. Founders and sales leaders must take some steps to build a culture where operational rigor and tracking are at the center and where the founder is still in the loop.
1. Develop (and evaluate) your sales operating model
A sales operating model quantifies how your sales team turns leads into conversions. Or, as Jeanne calls it, “your funnel math in a large spreadsheet.”
Your operating model informs everything, from your high-level vision and operational process to hiring, training, and metrics. It’s both a predictive and a diagnostic tool. To build it, you should establish and clearly document a set of reasonable assumptions based on a combination of any early data you have, industry data, and benchmarks appropriate to your category and selling motion. This will allow you to diagnose any deviations from the model and adjust your selling motion and tactics to improve outcomes, ultimately enabling you to build predictability into your plans.
As you reach replicability in your founder-led sales—winning with the same pitch with the same ideal customer persona (ICP)—you should have a strong enough understanding of your funnel math to use actual data to refine your operating model, including:
- The number of leads
- Conversion rate vs. opportunities
- Average deal size
- Win rate
- Deal cycle / time to close
- Time to go-live
With an operating model established and product-market fit (PMF), you’re ready to hire your sales team.
2. Building your sales function
Before handing off the reins, you need to lock in a few core elements of your sales strategy:
Sales research
While you may be blessed with inbound interest and leads, you’ll need to build a solid outbound engine to continue to scale your revenues—and you should start early. It typically takes a minimum of two years to develop an effective outbound capability, which is reflected in the data: a median SaaS startup takes 33 months to reach $1M annual recurring revenue (ARR) and most have established an outbound sales function to reach that milestone. This timeline reflects the process of collecting data and evolving:
- The validity of your ideal customer persona and sales pitch
- The differences between sales issues and a lack of product-market fit
- The sales operating model and revenue predictions
After your research has validated these elements, you can take a customer-centric sales approach, focusing sales resources on your most promising opportunities.
Sales training
After making your first hires, you can bootstrap sales development with self-training. Find the best negotiator, the best presenter, and the best off-the-cuff speaker on your team and have them lead a training session for the rest of the department. Then, you can add deal reviews and retros. Tested frameworks like MEDDIC are also great for understanding why a deal was won, lost, or fumbled.
Metrics and KPIs
Great salespeople appreciate scorecards—establishing clear performance metrics will help them stay focused and motivated.
Underlying metrics must match your company's growth stage. Meeting monthly recurring revenue (MRR) targets and reducing churn may be the priority during early growth, while market traction indicators are more important after the expansion stage.
For example, when Jeanne joined, Stripe had a consumption-based business model. It looked at the future potential of signed deals (theoretically expected value) as well as actual revenue as its north star metrics.
Segmentation
As your sales strategy evolves, you may find that your target audience falls into segments with similar pain points and needs. A shift in sales conversations involving new personas, pain points, or your perceived value is a sign that you have a new viable segment. Based on factors like cost per lead, you can use different tactics to convert these segments.
For example, Stripe initially sold to developers in startups, but as those companies scaled and more mature companies were targeted, CFOs became the new decision-makers and a new Head of Payments persona emerged as a key champion. Evolving the segmentation helped Stripe invest in new messaging and tools to better sell to these more specialized roles.
Sales quotas and compensation
In your operating model, you should establish a clearing threshold for the sales team. This revenue benchmark helps you decide when to increase investment and expand your sales team, and it’s critical to keep an eye on this to scale the team ahead of your revenue plan.
Compensation strategy is also situational—some companies opt for a more classic enterprise compensation model, while others have a more innovative philosophy.
Stripe wanted a culture of collaboration, so they had a shared quota for their 10-person team to “raise the tide for all boats.” Jeanne still tracked who was landing big deals and who wasn't, but there wasn’t the typical emphasis on performance dashboards. As the team progressed, these sales reps got higher equity than typical sales reps but had lower bonuses and on-target earnings (OTE).
3. Implement and iterate on your operating model
As your sales team grows, your operating model can be an excellent diagnostic tool for determining whether you’re ahead of or behind plan.
For example, Stripe moved from Series A and B targets to enterprises after big wins with Amazon and other large companies. They built their operating model around the enterprise data, using it to project the number of new reps they brought in.
However, they realized they had various deal types—from land-and-expand to smaller, high-margin deals—and readjusted their model accordingly.
Expect these model iterations as you expand into new segments or add new features and products.
Key consideration: Creating the right sales culture
It’s not uncommon for friction to exist between sales and other teams, such as product and engineering. To facilitate cross-functional collaboration and make your GTM team more effective, you need to establish a sales culture that integrates with other existing departments. One way to achieve this is to have your reps earn the trust and respect of other teams by demonstrating a deep understanding of the customer and your product offering.
At Stripe, Jeanne set a goal for her team: it should take a product manager or engineer at least 10 minutes to realize that a sales member wasn't actually involved in the product. Being highly knowledgeable about the product helped her team gain the support of other departments and improve collaboration.
Positioning sales as both a product-side and revenue-side asset to the rest of the company is essential. Your reps are the perfect source of insights on the functions, features, and messages that resonate with your ICP. After all, they’re the ones talking to customers 10–100x more than anyone else—about 4.4 conversations per day on average.
Scale your growth like SignalFire’s portfolio startups
If you feel like you've put yourself out of a sales job, you're succeeding. With the right operating model, sales talent, and cultural alignment, your sales team will start winning, and you can focus on other parts of the business. For more tactics, check out our guides on when to hire your first SDR, how to onboard and manage startup sales teams, and building your SDRs’ outreach plan.
But founders should never fully remove themselves from sales. Face time with your biggest customers makes them feel valued and keeps you in touch with what customers want. Only you have cross-team visibility and the authority to use those insights to build the next generation of your product.
Lessons from experts like Jeanne are invaluable for founders who want to take that next step. To get our portfolio founders in touch with experienced operators at the highest level, SignalFire launched its new Mentor Program, where you can access deep insights and valuable intel into startup scaling.
If you need assistance generating a list of sales leads, our Beacon AI analyzes a half a trillion data points to zero in on your exact ICP and provide you with contact information for your targets. We can also boost your launch plan with proven GTM insights from our in-house team, which includes former Stripe CMO Jim Stoneham.
Founders will always want to have a hand in working with their biggest customers and continue pulling insights on what all buyers want from the company’s product. By building a strong sales culture and measurement plan, founders can increase their leverage and the company’s revenue while allowing them to focus on cross-company priorities.
*Portfolio company founders listed above have not received any compensation for this feedback and did not invest in a SignalFire fund. Please refer to our disclosures page for additional disclosures.
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