Blog

The 2024 Stage 2 Capital Catalyst Curriculum is in full swing, and we're excited to bring you insights from Module #4: Making Your First GTM Hire.

In previous modules, we explored Stage 2's Science of Scaling method and its pillars of Product-Market Fit and Go-to-Market Fit. We also discussed building a GTM playbook and how to map the buyer journey. This week, we're covering a crucial step for scaling startups: building your initial go-to-market team.

It all starts with this question: "How do you hire and structure your first go-to-market team?"

Leading our discussion on GTM hiring was Liz Christo, Partner at Stage 2 Capital. 

Defining the Go-to-Market (GTM) Hire

While many startups begin with founder-led sales, at some point you reach a stage (hopefully sooner rather than later) where you need to start growing your team. Many founders jump to hire a sales leader, but Liz emphasized that the first GTM hire isn't always sales:

"Sometimes it’s a marketer you're hiring first. Sometimes it’s someone in CS. You really have to take a hard look at the founding team and figure out what is the right complement to your existing skill sets in order to figure out that first hire." Liz explained.

When deciding on your first go-to-market hire, start by evaluating your business needs. Liz recommends taking a step back and writing down your most pressing challenges. Rather than defaulting to a specific role, focus on the biggest pain point in your current go-to-market efforts. 

Enterprise or PLG? Choosing the First Hire.

Liz shared that one way you can prioritize your first hires is by looking at your sales model. These are just examples of how you might sequentially build out your GTM org, but the context of your unique company, buyer and team’s skill sets need to be considered:

For product-led or transactional motions: You might prioritize a growth hire first, making sure that you have really clean data and rev ops infrastructure, so that you can actually experiment, test and learn. Then start layering in CS or marketing.

For enterprise motions: You're probably going to hire somebody in an AE or lead gen type role first. It might be a BDR, a full cycle AE, or an account manager supporting you. But it's probably an individual contributor who can manage several deals.

The Sales Hire: Profiles and Key Considerations

Let’s assume that a salesperson is your first hire (though we acknowledge this may not always be the case). 

You've taken time to reflect on your business and you're ready to take the leap in hiring your first salesperson. Great! However, before you hire the first person referred to you, start by carefully planning out your needs. As Liz notes:

"Sales is not a black box. You are going to hire salespeople and you are going to assign them a quota. The devil is in the details here of making sure that you find the right person and you give them a quota that makes sense."

When defining the role for your first sales hire, consider these key factors:

1. Product Complexity: How technically sophisticated is your offering? This may influence the level of product knowledge and potentially technical background required.
   
   
2. Price Point: The cost of your product can significantly impact the sales process and cycle length.
   
   
3. Market Category: Are you selling into a category that already exists and that your buyer understands? Selling into an established market versus creating a new category requires different approaches.
   
   
4. Product Readiness: Do you have a product in market? Are you future selling against your roadmap? The stage of your product development will affect the nature of the sales role.
   
   
5. Sales Process Scope: Do you need the first AE to actually do any sort of onboarding and activation, or will they be really just focused on generating pipeline and closing deals?
   
   
6. Competitive Landscape: Who are the competitors in the space, how mature is it and what are the alternatives? Understanding your position in the market will help you identify the most valuable type of sales experience.

All of these elements will help you figure out who the right person is. However, there's another critical factor that Liz emphasizes: the company's stage. Liz highlights a great point:

"It's often underestimated just how different this job is and what it takes to be the first seller versus the fifth versus the 100th. The level of process and repeatability is so different."

While some salespeople can adapt across stages, it's rare. Liz cautions against assuming a salesperson from a large, established company can effectively navigate the challenges of an early-stage startup. For instance, hiring someone with 10 years at Oracle to find your first five customers is unlikely to be successful.

When hiring, look for candidates who have excelled at a similar stage to where your company is now.

Taking a Step Back: Thinking Through Your Hiring Strategy

Once you've defined what you're looking for, resist the urge to immediately post the job description and start interviewing candidates. Liz stressed the importance of taking a step back before jumping into candidate interviews. 

"Take a moment to reflect and zoom out before talking to candidates," she explained. This reflection helps avoid the pitfall of getting excited about a great candidate without being intentional about the role you're trying to fill.

She recommended a structured approach:

1. Define Success: Take a moment to write down what you need this person to do in the next 9-12 months. What is the definition of success? What would get you excited?
   
   
2. Evaluate Your Needs: Consider your strengths as a founder. What areas do you need to stay involved in, and what can you confidently hand off?
   
   
3. Develop a Scorecard: Use your reflections to create a hiring scorecard. This isn’t difficult, but it may feel cumbersome the first time you do it. (Stage 2 has a great hiring scorecard template for sales as well as marketing, customer success and revenue operations.)
   
   
4. Focus on Must-Haves: Prioritize the essential skills and experiences and narrow down to a max of 5. Be ruthless during this step. If you have a laundry list of needs, it will be much less obvious when trying to understand if someone is a fit.
   
   
5. Prepare Targeted Questions: The scorecard should guide your interview questions and help you assess candidates effectively.

Who should run the hiring process? Liz strongly advises that hiring managers, likely the founders at this stage, should own this process. "When you remove a layer from the hiring manager, there is a risk that things get lost in translation.”

Building an Effective GTM Interview Process

When it comes to interviewing, a structured process for GTM candidates typically includes:

1. Structured interview panels to ensure consistency.
   
   
2. Role-playing exercises to assess skills and coachability.
   
   
3. Live problem-solving scenarios, such as product demos or campaign creation.
   
   
4. A comprehensive assessment that might include:
   1. Initial phone screen
   2. In-person interviews with key team members
   3. Skills assessments or case studies
   4. Reference checks, both provided and back-channel

Key Mistakes to Avoid When Hiring

It’s always great to hear advice on what to do, but what about the missteps to avoid? Liz gave us three common pitfalls in GTM hiring:

1. Over-relying on industry experience - people tend to weigh this too heavily and assume that the new hire is going to walk them into deals. While this can be helpful, there are many ways to source those intros, often through an advisor or building a network. Your sales leader really needs to be figuring out a repeatable go-to-market motion.
   
   
2. Hiring too senior for the company's stage - Liz cautioned against the common boardroom mistake of pursuing overly senior candidates for early-stage companies. Instead of seeking someone who has taken a company public or manages a large sales team, focus on what you need for the next 12 months.
   
   
3. Stepping away from founder-led sales too soon- Liz warned against stepping away from founder-led sales too soon. Founders need to directly understand what works with customers in the early days and there's a tendency to give new sales hires too much leeway when they would learn faster with more exposure to and involvement from the CEO/founders. 

Beyond the Sales Hire: While we focused on sales hires in this module, building a well-rounded go-to-market team involves multiple functions. Your business model might point you in a different direction - for instance, if you're running a product-led growth model, marketing or customer success might be your priority to drive top-of-funnel demand. 

And a final word from Liz, "The devil is in the details." Take the time to get your first GTM hire right, and don't be afraid to lean on your network and advisors for support in this process.

In our next module, we'll cover compensation plans and quota setting for your GTM team.