July 30, 2024
Slack, 2016: “I think we can get away without having a sales team in any kind of traditional way probably forever.”
Slack, 2024: 500+ people in sales and 350+ in Customer Success
Slack isn’t alone to realize the potential of combining PLG and sales for efficient growth.
However, it only works well, when you’ve built the ground right for both functions to deliver results.
While product-led sales sounds great on paper, it’s much more complex behind the scenes.
One of the challenges we faced was creating a solid sales team to support our enterprise sales layer. When adding so many team members while growing at warp speed, it really puts a lot of pressure on you to make sure that you have a solid hiring and compensating system in place. Hiring mistakes are inevitable, but you need to be getting it right more than you’re getting it wrong.
At the same time, planning compensation forces hard conversations about company goals, the profile of sellers that you want to hire, and how to use compensation to drive the right incentives and behaviors.
This emails packs the lessons we have learnt from our systems and from talking to our growth advisors regarding:
At Sybill, individual users can self-serve with zero sales touch.
However, as we aimed for enterprise accounts, a sales team became crucial to increase deal sizes and velocity, ensuring quicker and larger deals through active salesperson engagement.
This shift towards serving larger companies needing multiple licenses prompted the development of a sales team from scratch, addressing the growing demand for assistance in the buying process.
Who should be the first go-to-market (GTM) hire at an early startup?
While many founders think hiring a head of growth is the best start, the truth is a head of growth is better at growing a company that already has a good product and market fit, not starting one from scratch.
In 2022, Openview published its Product Benchmarks report: which includes data from 450+ software companies (PLG and non-PLG).
The data reveals that most software companies (51%) choose Sales for their first go-to-market hire, while about one third (31%) hire Marketing first. The rest hire for growth or another role like support or customer success.
Even for us at Sybill— our first hire was our VP of sales who joined us as a GTM advisor first and turned to be a full time CRO later. His experience handling similar clientele and serving the enterprise accounts were exponentially beneficial and later in hiring the aligned team.
Thus, your first hire largely depends on factors like —
Your product type exceptionally comes into play—
Whether, you offer a freemium tool, a free trial or offer first contact as sales.
This data reports are fascinating:
Dave Boston global director of sales at HubSpot and their very early GTM hire shared an anecdote:
“You need people who have a history of doing things in a non-traditional way; you need someone who’s intrinsically motivated and naturally curious. Don’t ask the traditional sales questions like ‘what’s your quota attainment’ or ‘what’s your pipelining process?’”
Sequencing hires starts with being able to:
For instance, a company might be good at acquiring customers, but struggles to expand its presence within an organization. To increase the number of users engaging with the product, it's worth considering the inclusion of customer success and onboarding elements.
Dig into where the challenges are, identify what needs should be met first, and then map that back to which hires take priority over others.
“If I see leaders that look more like me, I know there’s more potential to succeed in the company,” said Hang Black, Vice President of Global Revenue Enablement at Juniper Networks and author of Embrace Your Edge.
Despite 40% of the U.S. population identifying as racially or ethnically diverse, data from the U.S. Bureau of Labor Statistics shows that 80.2% of Americans in “sales and related occupations” are white. That figure rises for sales managers, 87.6% of whom are white.
A study by the Harvard Business Review found — (infographic design)
Working with people who are different from you may challenge your brain to overcome its stale ways of thinking and sharpen its performance.
Diverse teams will outperform non-diverse teams any given day, even on a Sunday.
LinkedIn Talent Solutions created this self-assessment for getting started with inclusive hiring practices. You can check it out.
Thinking about teams that use both product-led growth and sales, focusing on data becomes a big chance for improvement.
Understanding user behavior and buying habits is very useful for a sales team if used right.
This data helps to:
On a personal level, data helps team members perform better. Normally, it might take 3 to 6 months for someone to fully get up to speed, but with data and insights, this time can be reduced significantly.
John Eitel shares a story about the power of using data effectively:
“In my own career, there have been times where I prioritized getting a resource allocated internally from another department or hiring within my sales operations org to get someone to focus on the data.
In one such situation, I sat down with a high-performing member of my sales team. I wanted to understand what made him so effective. When I looked at his activity metrics, they were much lower than everyone else on the team, yet he was having the highest success.
When I learned how he was leveraging his background and education in software development and data, I started thinking about ways I could model what he was doing. With this information in mind, I elevated him into a role that allowed him to assist other people on the team.”
A tool like Sybill.ai stands out dramatically to amplify these benefits. It offers:
Sales compensation design is notoriously tricky for software companies.
You should not be assigning traditional quotas for product-led sales roles, especially not early on
in the role. Give new hires a full four to six months to understand the product, the persona, and
the value proposition before handing them a quota.
Before jumping right into setting quotas or On-Target Earnings (OTE), you need to get clarity on:
(a) your business goals,
(b) the roles you need on your team,
(c) compensation best practices for those roles at PLG companies, and
(d) the behaviors you want to incentivize or disincentivize.
Ultimately, most software companies want to grow their recurring revenue. But there are different business goals for achieving that result. Specifically, you could consider:
For companies that blend product-led growth with sales things can look more complicated.
Map out the roles required to achieve your business goals, which typically include Product-assist, Sales Development (SDRs/BDRs), Account Executives (AEs), and Account Managers (AMs). Each role should have clear responsibilities and audience to focus on:
Choose KPIs aligned with each role's objectives and the behaviors you want to incentivize. For example, product-assist roles could be tied to customer experience KPIs or new customer conversions, while AEs might be compensated based on ARR or MRR won.
Decide on the activities and outcomes that will drive compensation.
Early on, you may focus on rewarding activities believed to lead to desired outcomes, and as you scale, shift towards rewarding outcomes themselves.
Ensure actions rewarded are within the rep’s control and don't lead to negative impacts further down the funnel, like customer churn.
It's generally prudent to reward account executives for self-service accounts under their purview, especially if these accounts have been scored using product-qualified methods. Incorporate self-serve revenue into their quotas and conduct reviews to verify significant sales interactions.
Compensating account executives for expansion revenue within a set timeframe following the initial deal closure, say 4 to 12 months, seems reasonable. This not only ensures fairness but also promotes an aggressive 'land-and-expand' strategy.
Assign reps to accounts with substantial growth potential, even if they initially contribute smaller amounts. This encourages the nurturing of potentially high-value customers and focuses on their long-term value.
Generally, capping commissions is not advisable, except in the case of exceptional deals that involve substantial team effort and could distort the compensation structure. Implementing a “windfall clause” can be an effective way to manage financial exposure in these scenarios.
Slack, 2016: “I think we can get away without having a sales team in any kind of traditional way probably forever.”
Slack, 2024: 500+ people in sales and 350+ in Customer Success
Slack isn’t alone to realize the potential of combining PLG and sales for efficient growth.
However, it only works well, when you’ve built the ground right for both functions to deliver results.
While product-led sales sounds great on paper, it’s much more complex behind the scenes.
One of the challenges we faced was creating a solid sales team to support our enterprise sales layer. When adding so many team members while growing at warp speed, it really puts a lot of pressure on you to make sure that you have a solid hiring and compensating system in place. Hiring mistakes are inevitable, but you need to be getting it right more than you’re getting it wrong.
At the same time, planning compensation forces hard conversations about company goals, the profile of sellers that you want to hire, and how to use compensation to drive the right incentives and behaviors.
This emails packs the lessons we have learnt from our systems and from talking to our growth advisors regarding:
At Sybill, individual users can self-serve with zero sales touch.
However, as we aimed for enterprise accounts, a sales team became crucial to increase deal sizes and velocity, ensuring quicker and larger deals through active salesperson engagement.
This shift towards serving larger companies needing multiple licenses prompted the development of a sales team from scratch, addressing the growing demand for assistance in the buying process.
Who should be the first go-to-market (GTM) hire at an early startup?
While many founders think hiring a head of growth is the best start, the truth is a head of growth is better at growing a company that already has a good product and market fit, not starting one from scratch.
In 2022, Openview published its Product Benchmarks report: which includes data from 450+ software companies (PLG and non-PLG).
The data reveals that most software companies (51%) choose Sales for their first go-to-market hire, while about one third (31%) hire Marketing first. The rest hire for growth or another role like support or customer success.
Even for us at Sybill— our first hire was our VP of sales who joined us as a GTM advisor first and turned to be a full time CRO later. His experience handling similar clientele and serving the enterprise accounts were exponentially beneficial and later in hiring the aligned team.
Thus, your first hire largely depends on factors like —
Your product type exceptionally comes into play—
Whether, you offer a freemium tool, a free trial or offer first contact as sales.
This data reports are fascinating:
Dave Boston global director of sales at HubSpot and their very early GTM hire shared an anecdote:
“You need people who have a history of doing things in a non-traditional way; you need someone who’s intrinsically motivated and naturally curious. Don’t ask the traditional sales questions like ‘what’s your quota attainment’ or ‘what’s your pipelining process?’”
Sequencing hires starts with being able to:
For instance, a company might be good at acquiring customers, but struggles to expand its presence within an organization. To increase the number of users engaging with the product, it's worth considering the inclusion of customer success and onboarding elements.
Dig into where the challenges are, identify what needs should be met first, and then map that back to which hires take priority over others.
“If I see leaders that look more like me, I know there’s more potential to succeed in the company,” said Hang Black, Vice President of Global Revenue Enablement at Juniper Networks and author of Embrace Your Edge.
Despite 40% of the U.S. population identifying as racially or ethnically diverse, data from the U.S. Bureau of Labor Statistics shows that 80.2% of Americans in “sales and related occupations” are white. That figure rises for sales managers, 87.6% of whom are white.
A study by the Harvard Business Review found — (infographic design)
Working with people who are different from you may challenge your brain to overcome its stale ways of thinking and sharpen its performance.
Diverse teams will outperform non-diverse teams any given day, even on a Sunday.
LinkedIn Talent Solutions created this self-assessment for getting started with inclusive hiring practices. You can check it out.
Thinking about teams that use both product-led growth and sales, focusing on data becomes a big chance for improvement.
Understanding user behavior and buying habits is very useful for a sales team if used right.
This data helps to:
On a personal level, data helps team members perform better. Normally, it might take 3 to 6 months for someone to fully get up to speed, but with data and insights, this time can be reduced significantly.
John Eitel shares a story about the power of using data effectively:
“In my own career, there have been times where I prioritized getting a resource allocated internally from another department or hiring within my sales operations org to get someone to focus on the data.
In one such situation, I sat down with a high-performing member of my sales team. I wanted to understand what made him so effective. When I looked at his activity metrics, they were much lower than everyone else on the team, yet he was having the highest success.
When I learned how he was leveraging his background and education in software development and data, I started thinking about ways I could model what he was doing. With this information in mind, I elevated him into a role that allowed him to assist other people on the team.”
A tool like Sybill.ai stands out dramatically to amplify these benefits. It offers:
Sales compensation design is notoriously tricky for software companies.
You should not be assigning traditional quotas for product-led sales roles, especially not early on
in the role. Give new hires a full four to six months to understand the product, the persona, and
the value proposition before handing them a quota.
Before jumping right into setting quotas or On-Target Earnings (OTE), you need to get clarity on:
(a) your business goals,
(b) the roles you need on your team,
(c) compensation best practices for those roles at PLG companies, and
(d) the behaviors you want to incentivize or disincentivize.
Ultimately, most software companies want to grow their recurring revenue. But there are different business goals for achieving that result. Specifically, you could consider:
For companies that blend product-led growth with sales things can look more complicated.
Map out the roles required to achieve your business goals, which typically include Product-assist, Sales Development (SDRs/BDRs), Account Executives (AEs), and Account Managers (AMs). Each role should have clear responsibilities and audience to focus on:
Choose KPIs aligned with each role's objectives and the behaviors you want to incentivize. For example, product-assist roles could be tied to customer experience KPIs or new customer conversions, while AEs might be compensated based on ARR or MRR won.
Decide on the activities and outcomes that will drive compensation.
Early on, you may focus on rewarding activities believed to lead to desired outcomes, and as you scale, shift towards rewarding outcomes themselves.
Ensure actions rewarded are within the rep’s control and don't lead to negative impacts further down the funnel, like customer churn.
It's generally prudent to reward account executives for self-service accounts under their purview, especially if these accounts have been scored using product-qualified methods. Incorporate self-serve revenue into their quotas and conduct reviews to verify significant sales interactions.
Compensating account executives for expansion revenue within a set timeframe following the initial deal closure, say 4 to 12 months, seems reasonable. This not only ensures fairness but also promotes an aggressive 'land-and-expand' strategy.
Assign reps to accounts with substantial growth potential, even if they initially contribute smaller amounts. This encourages the nurturing of potentially high-value customers and focuses on their long-term value.
Generally, capping commissions is not advisable, except in the case of exceptional deals that involve substantial team effort and could distort the compensation structure. Implementing a “windfall clause” can be an effective way to manage financial exposure in these scenarios.
