Hiring your first salesperson in the United States can be a risky process. Aside from the fact that it is in another country, it also is in a discipline, sales, that you may not be that familiar with. Selling in the United States is much different than in Israel, or any other place in the world for that matter. The title of the blog says “buyer beware,” and this is not an idle warning. A common reason that startups fail in any country is their inability to hire an effective sales resource to market their brand. One of the most challenging aspects of the process is that so much of it is subjective. For this reason, I have isolated important decision points that can be documented and evaluated objectively.
For the purposes of this conversation, I’m going to focus on the sales position and make some brief remarks relative to pre-sales. Suffice it to say, you want to be rigorous when evaluating the technical competence and presentation skills of the technical sales position candidates. Most Israeli start-ups have a great deal of expertise relative to the technical competence, so areas to be careful about are presentation and selling skills. I would strongly recommend that you hire your salesperson first and let that person be a big part of the decision making process for pre-sales.
This posting is specifically applicable for salespeople representing companies introducing brand-new technology into the United States market. We call these “hunters” The qualifications required for someone to sell a product that already has a large install base are completely different. We call these “farmers”. You need a hunter!
The good news is that can weed out 90% of your applicants with very objective criteria and the first to look at is their experience. Has the person ever sold brand-new enterprise software that currently has no United States references? How many times have they done this? How many new clients? What was the total revenue involved? What is the largest deal they sold during a first year in the USA for a product? How much support did they need from the group in Israel? My advice, is that if they have not already done what you need them to you need to keep looking.
What about their overall experience? What was the largest number of new customers that they were able to bring on in their first year at any company? How much revenue did that involve? What was the largest single transaction they have ever done? And how long have they been selling enterprise software? In the years that they worked for larger companies how many times did they go to the club reserved for the high performers? The correct answer in many cases is dependent on your product. Compare their responses to your goals. If they have not achieved at that level before it probably is over optimistic to believe they will now.
There are always exceptions but the best candidate should have over 10 years of experience selling enterprise software and have proven success selling to the type of buyer you plan to target, business or IT. They should have proven performance at both the large and small companies they have worked at, in the top 20% of the sales force. They must have evidence of marketing a brand-new technology and also selling large transactions, over $1,000,000, of that technology in the first year.
A great way to save time and protect your interests is using documented earnings history. In United States we do have many rules around what types of information you can ask for during the hiring process. Fortunately one of them is not earnings history. A “hunter” you can feel comfortable depending on should have average earnings over $225,000 a year. They also should be able to show at least one year in the last four with earnings much higher, over $350,000. Any applicant that has not sold brand new technology for an Israeli company in the USA and made over $250,000 doing so is a huge risk for you. Be sure to ask them for their last four W-2 tax statements. If they refuse I’d need a really good reason why not and in thirty years I’ve yet to hear one.
Skills evaluation is much more subjective but must be addressed. Many of them are extremely important in helping your company become successful in the United States.
We all know how difficult it is to learn to speak a language. It is even more problematic to learn to write effectively in a new language. Over the last five years more people, specifically executives, are reading emails then accepting phone calls. The written word has always been very important in sales and now even more so. All correspondence from your company needs to be extremely well written. For this reason having someone that can write well in American English is an imperative. The British write best for the British, and Americans write best for Americans. We are not referring to marketing collateral, rather we are talking about interpersonal written communication. Your sales person needs to be an excellent writer. Find a friend, an American, that is well educated and ask them to look at the candidate’s LinkedIn profile, Facebook page, and any other document they can find that the person wrote. Also review the candidate’s background to see if they have formal studies in writing. Your future VP Sales should understand that they will be expected to review correspondence from other people in the company to ensure that it’s well written.
The only way to know for sure how someone presents is by watching them do so. Assemble your management team together with one of your American clients or advisors and have the candidate present their current product overview. When they are done ask them informally how they would present your product. Ask them to leave and let everyone give their opinion.
Prospecting is the skill that no one wants to practice. It is also the most important skill that a salesperson can have. You can make a lot more mistakes during your first year in America and still make the number if you have lots of opportunities to work on. And trust me, you will make mistakes!
I have two pieces of advice as you evaluate the candidates prospecting skills. First I would ask them how they typically prospect and specifically what are the steps they take to target accounts. Ask them to be very specific. If they have done this before then they will have a good answer. On the other hand if they are used to depending on marketing and good luck for activity they will have less to say. This is where I would bring in the second piece of advice. Be very clear with them that they should not expect any leads from marketing or from the website for the first year. Also make it clear that there’s no budget for third party lead generation. You can always change your mind later, you want them to take the job with the understanding that they are responsible for creating their own pipeline.
I’ve been fortunate to sell to and with many nationalities and cultures. Surprisingly, I think that selling to a new culture is easier because people have a tendency during the sales process to be more circumspect about the way they act and communicate. On the other hand when you’re in the trenches fighting for survival you don’t worry about the niceties of cultural differences and that means that everybody needs to be extremely adaptable and thick-skinned. No matter what cultures are involved there are going to be differences and potential misunderstandings within the team. A technique that was used for my first position with an Israeli startup was to have a two-day interview in Netanya. One half of the visit was sitting in on their management team meetings as their VP of sales. It was quite an experience and a great litmus test for our ability to work together as a team. When you get to the point that you have a finalist I would strongly suggest that you do this if you can afford it.
Of course there is a great deal more on this topic. If you are very fortunate you should expect this process to take 2-4 months. Sometimes it can take much longer. There will be a temptation to “settle” with someone less than perfect if the process takes too long. Hang in there. Interviewing for three more months is a small price to pay compared to hiring a poor fit and losing your headhunter fee and 6-12 months of little to no activity or revenue. That alone could be fatal.
Finally, there is an expression we like to use in the USA, “Don’t be penny wise and dollar foolish”. The salesperson that has all the aforementioned qualifications will not be inexpensive but will have a track record that greatly improves the likelihood of success. Your investor might be pleased if you save $100,000 on compensation but only if you have exceeded your revenue target. If you miss that number your cash management is not going to help much. You pay what you get for and in that way things are the same everywhere.
Any questions or comments? Drop me an email at email@example.com.
Good luck and happy hunting.
Funny Sales Pitch – Prospecting Is Fun! – (Warning: Some Profanity)