Roberge: Hiring sales reps based on domain experience correlates with failure
Mark Roberge · Mark Roberge: The Framework for How Startups Should Scale into the Enterprise -Stage 2 Capital|E1176 · 20VC with Harry Stebbings · Jul 12, 2024 · at 5:23
Mark Roberge, Senior Lecturer at Harvard Business School and Managing Director at Stage 2 Capital, discusses common mistakes founders make when hiring early sales talent.
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“10 years of experience selling a product like mine to a customer like mine. And there's tremendous research that shows that that mindset correlates with lack of success, like doesn't work out.”
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More from Mark Roberge
Roberge: Startups Seeking Product-Market Fit Should Avoid Commission Plans
“I don't like commission plan salespeople in the journey to product market fit. Like I just want pure equity people.”
HubSpot rejected a $3M Facebook deal at $3M ARR to maintain focus
“I mean, I think we're at two, three million in revenue at HubSpot and one rep brought Facebook to the table as a customer. It was like a three million dollar contract. It would have doubled our revenue. And he said, no, we were being pulled, said no.”
Roberge: Prioritize deal size experience over domain expertise when hiring sales reps
“I have strong conviction that deal size has a higher weight. In correlation to success. Let's just say we sell million dollar deals to banks. And I have two candidates. One candidate sells 10,000 dollar deals to banks. And one candidate sells million dollar de…”
Roberge: Sales Commissions Should Be Split to Reward Customer Retention
“I'm gonna give you half of the commission when the customer pays, and half the commission when they hit their leading indicator of retention, which usually happens in the first 30 days.”
Roberge: PLG sales reps should earn higher commissions on expansion revenue
“I would do something like this, Harry, you're a salesperson, your job is bringing customers. I'm going to pay you know, three percent. Rate on the first ACB from a customer and five percent on any expansion revenue. So now it's like, oh, sweet. Okay. I get it.…”
Roberge: SaaS CAC payback periods longer than 12 months signal flawed economics
“So if someone pays us 10,000 dollars a year, And it costs us 10,000 dollars to acquire them. We get paid back in 12 months, right? Anything above that, you start to question whether your economics work, anything below that, it's really good.”