Playbook / Lessons / Team and numbers
StartupsPrice your first sales hire
Tunguz treats the first sales hire as a question of numbers, saying the person's productivity has to exceed what they cost. He works through an example with a $70k annual cost, a $210k annual quota and a month in which a salesperson works about 60 leads at a typical 20 percent conversion. He adds that product and marketing must supply enough leads for the hire to succeed.
“At the most fundamental level, sales productivity has to exceed costs.”— Tomasz Tunguz, Hiring Your Startup’s First Salesperson, May 2013
Do this
This week, write down what a first sales hire would cost per year, the sales needed to cover it, and the leads you could supply each month.