I realize that, if we were only dealing with the conventional wisdom, the simplest and most straightforward answer to the textbook question of when a company's CEO should stop his or her day-to-day selling of the company’s products and services would typically be “never”. It's not exactly the ABC rule ("Always Be Closing") from Glengarry Glen Ross (You can watch the classic Alec Baldwin speech here: https://www.youtube.com/watch?v=Q4PE2hSqVnk .) but it's pretty close. Maybe today we would call it the ABS rule. Always Be Selling. If you’re not excited about your business and your prospects, why would you expect anyone else to be?
In a way, you can just think of it as the need for the management of any startup to be perpetually pitching and it always starts at the top. It doesn’t matter who the target is (customers, prospects, investors, employees, etc.), there’s always a story to be told and sold. Telling and selling. And the CEO (so the experts tell us) should always be out front succinctly selling the story, deliriously describing the dream, and rigorously rallying the troops. It's a basic part of the boss's job description and not one that anyone gets to delegate. No one knows your business better than you.
Now, as a general proposition, I would say that it's hard to disagree with this idea. If you’re not out there and constantly on the case, you can be sure that a competitor will be happy to take your place. You can’t sell anything sitting on your ass in your office and nothing today sells itself. And the truth is that the best CEOs are also great salesmen (or women) who could sell shoes to a snake, but that may not be their highest and best use for the business after a certain point in its development. That’s really the key question – when does it make sense for the CEO to stop?
At a recent conference I attended, David Teten from ff Venture Capital had some important thoughts on the subject. You can learn more about his ideas at www.teten.com/sales. It turns out that there's actually a pretty good answer to this question – one that’s especially relevant for startups - and a pretty simple guideline which can help you determine exactly (a) when it's the best time for the business to start hiring some qualified sales managers and (b) whether the time is right for the CEO to take a step or two back from the front line, hand off the ball to the sales team, and bench himself so he can be doing better things for the business.
Timing is everything in building the right team for a new company and, notwithstanding the fact that most of the time people are too slow in bolstering their business with some seasoned seniors, it’s just as bad to be too early as it is to be too late. Getting some “grown-ups” in place and up-to-speed before you really start to scale the business is a key success factor in your growth and the best possible insurance that you won’t stumble along the way. You want people who could sell muzzles to dogs on your team, but not too soon. It’s too costly to have them just sitting around while the product guys try to get things right and they hate it as well. The very best sales people take it personally and want to be out there selling every day.
So the proper timing to add some professionals to your team is not an easy or obvious decision. I like to say that, in cases like this, it seems that it’s always too soon until it’s too late. However, the good news is that I can definitely tell you (with some degree of confidence and certainty) when it’s definitely too soon for a startup to add dedicated sales talent to the team.
There are two simple rules:
(1) You don’t need a sales team until you’re ready to scale; and
(2) You’re not ready to scale until you’ve sold a LOT of the SAME stuff to a bunch of SATISFIED customers.
We all know that there’s no real business without sales and satisfied customers, but not all sales are the same for all purposes. You’ve got to nail it before you scale it (confirm both product and market fit) and big businesses are never bespoke. That’s why it’s critical that the successful sales which stick be of the same basic product or service without costly customization, without one-off incentives or add-ons, without a whole lot of handholding, and without spending more to get them than you’re ultimately putting in your pocket.
But what does this have to do with the CEO being out there selling? He or she needs to be out there selling until the concrete sets and the product or service is locked down and secure. Until you’ve had a dozen serious sales (with happy customers) and it looks like things are sticking and the dogs are eating the dogfood. If there are still open questions, if there are changes or mid-course corrections that must be made, if there are pricing concerns or additional critical features to be added; there’s really only one person who can make those calls and it’s critical that the inputs to the decision-maker be direct and ideally face-to-face from the market and the customers. No one will ever tell it to you straighter than a customer and you need to hear the unvarnished truth to ultimately get your offerings just right. But you can’t fix things from afar – only from the field.
Salesmen who don’t make sales are especially good at coming up with excuses and offering explanations and reasons why your stuff doesn’t sell. The worst of them are the best at this because that’s mainly what they do all day - they make excuses instead of sales. And in startups, especially in the early stages when everyone pitches in, a lot of people are trying to sell who aren’t even “sales” people and who have little or no training. They try to “sell” because there’s no one else around to do it. That’s not a good place for any business to be. “Trying” doesn’t drive “buying” in the real world – selling is a skill just like many others and not something you pick up in your spare time. See http://www.inc.com/howard-tullman/bring-back-the-peter-principle-please.html .
So it’s easy for an entrepreneur to lose patience and rush to get some skilled help in this area. But it’s smarter to make sure that you’ve got something real and solid for these folks to sell before you bring them in and turn them loose and ultimately that’s a call that only the CEO can make.
