What are the biggest mistakes that B2B SaaS startups make in sales?

July 21, 2018

The 8 most common sales mistakes that I frequently notice in venture-funded SaaS startups. These include adding territories too early or hire a bunch of AEs when there is no pipeline. Avoiding these early mistakes will impact your ARR from the beginning.

These are the 8 most common sales mistakes that we frequently notice in venture-funded SaaS startups (particularly from Series A to Series C) :

  1. Hire a bunch of closers when there is no pipeline - These experience AEs spend all of their time trying to get a meeting, their pitch is terrible because they haven’t practiced it enough, and after a few months they get frustrated and leave. → It’s better to beef up the SDR team at the beginning and have only one rep (or the CEO) to close the deals.
  2. Hire AE and SDR hybrids - These are people who need to prospect and generate their own pipeline, then close it. They can’t do both at the same time, so they’ll spend half of the quarter trying to create pipeline, then the other half trying to close it. Then they start the next quarter with zero pipeline. This can work if your sales cycle is 45 days or less (not common in SaaS). → Start specializing roles from the beginning.
  3. Establish quota way too high - When I look at some of the forecast for the fiscal year, the only way to make it is by either hiring twice as many reps or expecting that everyone will double their quota (which is already high to begin with). After two quarters of missing quota, even your best rep will leave as he/she is making no money. → Be realistic with what is an attainable quota at your stage.
  4. Having no formal onboarding or training - I believe only 20% or less of SaaS startups have a formal training program in place for new reps. For the majority, training means “here’s some videos to watch, read these whitepapers and shadow one of the other reps until you are ready”. → Invest in this as early as you can, have a program in place that covers their first month with classes and tests, your ramp time will decrease significantly. Also, if you are hiring more than one rep, hire them in classes.
  5. Have SDRs acting as the “executive assistants” of field reps - It’s good to pair the SDRs with the field reps, but their role needs to be well defined and written down on a playbook. It’s not the SDR’s role to do data entry for the rep or to manage his/her calendar → Define the SDR process for both mid-market and enterprise and monitor it. Make expectations clear from the beginning.
  6. Implement territories too early - Your sales process changes frequently at the beginning. Maybe you were initially targeting manufacturing companies, now you found out that your best vertical is telecommunication or banking. If what drives your process is territories, you’ll have to adjust who you are targeting so that you don’t leave a few reps without prospects (even though they are not your ideal customer profiles). → Implement territories as late as you can. I know companies with 15 reps and still no territories (and they are doing really well). You can still hire reps in different regions, but don’t be strict with the territory division at the begging, go by target account lists.
  7. Have a messy sales funnel - You should know exactly how your leads are going through the funnel, how they get assigned, converted into opportunities, recycle. Often, companies leave hundreds of thousands of leads parked in some “queues” that are then forgotten. → Hire a demand generation or sales ops expert at the beginning to map and monitor these processes.
  8. Not automating mindless tasks - Don’t have your SDRs or AEs spend their time building lists or performing repetitive tasks. That’s a huge waste of money. → If you can, automate them via Marketo, Outreach, etc. If not, outsource them.

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