What is the role of the sales director in a new company?

Mike;  Assessment tools and collateral and "bringing a sales specialist in house" are getting the cart before the horse.  you need to figure out the economics first which will dictate the appropriate selling model which will dictate the type of person you hire (or don't hire as the case maybe - we don't yet know if you can even afford to sell direct).  We still don't know if your typical sale is $200 or $200,000 and if the LTV is $100 or $1M.  At this point you don't know whether to recruit from Radio Shack or Oracle (i use those 2 extremes simply to make a point). There is a tremendous difference between the type of sales person who will be challenged and motivated making 5 $3,000 sales/week over the phone VS 5 $1M deals/yr selling strategically to large accounts.  And maybe neither of those work and you should focus on marketing and/or SEM.  Without numbers you don't know whether to focus on inside sales, outside sales, SEO and automation, or some combination.   These scenarios also require very approaches to recruiting, evaluating, compensation, training, managing, etc.  The economics of your selling model will dictate the profile(s) you need to hire for and then you can consider assessment tools and sales execution details (CRM, collateral, remote selling tools, etc.).  

Mike - with no sales background you'll have a difficult time holding independent reps' feet to the fire.

I tend to agree with Zack and Rick, especially Rick.

Mike, Lane is right on. If you don't have someone who knows what they are doing in Sales then hiring a sales rep is a waste of capital. Salespeople sell. They don't create strategy, develop lead programs Train themselves, or hold their own feet to the fire. That's what sales managers do. If you did find a salesperson who does all those things chances are you couldn't afford him or know one when you see one. And he would probably insist on straight commission because nobody can pay him what he is worth.

The average startup (and most sales depts. in mature companies) do the same thing you did because they can't evaluate salespeople on an interview either. One of the things we do here at JPM Partners is to recruit salespeople using a proprietary software to separate the performers from the talkers, and then we go one step further and tell our clients where the salesperson is strong and needs more training in the sales process. Guess who 95% of our customers are? Sitting down? Other recruiting firms who specialize in tech, education, healthcare, etc. Because sales in so specialized that they know what they don't know! Also because they've already made enough mistakes hiring the wrong peopleand spent enough money on the costly trial and error process.

After 25 years of running sales organization for corporate turnarounds and startups  I can talk about this all day. Make that all week! LOL There are other options open to you and if you contact me offline I will share with you what they are - some of which are risk free and perfect for a budding startup like yours. Email me at vinny@jpmpartners.com

All the Best,

Vinny

What Rob said.

Mike you haven't talked about how you have structured your compensation schemes and what winning a typical deal will get a sales person.   I've only had a peripheral involvement in technology sales to Schools and SDs  but what I remember from that is that the sales cycles are simultaneously long and compressed  -

ie you often have a long cycle engagement with multiple clients and then suddenly in the space of a few months, 75% of the good prospects want to close.   This has to do with how the budget cycles work in SDs.   So you may have unrealistic expectations of the sales reps and similarly your sales reps may have unrealistic expectations of the process.

Frankly though, if you are not willing to get involved in a weekly engagement with your sales teams,  and to use your passion to close the "borderline deals" - then I'm not sure you have what it takes to be an entrepreneur.   Either you are "all in" or you are not.  

Think of it this way - lets say you DO become "that guy".  

• What will that cost you professionally
  • in the short run
  • in the long run
• What will it cost you professionally if you succeed
• What will it cost you professionally if you fail

Frankly at the stage you seem to be at,  I would expect your sales folks to be 100% commission based, no salary  with a solid quota set on a monthly or quarterly basis with an expectation of hitting the quota 3 out of 4 quarters or 10 out of 12 months.

And if after a year (assuming a sales cycle under a year long)  they haven't met that- then you find a replacement.   You are not in the position of having the cashflow to spend on sales evaluation or training programs.  

What you do need is at least a monthly meeting with your Sales Reps to discuss what is working, what isn't, and what their sales pipeline looks like (that's another thing that its hard to help you with.  You are simply saying you don't think you are selling enough.   But you haven't told us where in the sales pipeline things are falling down - I wonder if you even know)

Tradeshows can be a good source of sales - but more ideally they are a source of qualified leads for your sales team to go after.  And you should be following up with every customer to gauge their level of satisfaction.

Then with the satisified ones you need to either ask for references or ask for case studies to take into future sales engagements

Mike is getting lots of advice... from a lot of angles :-/    which is likely making his job harder not easier.  My earlier point is that i think Mike likely needs to take a step back and analyze the economics of his business which will inform his basic selling model:  direct, person-to-person selling with in-house team? (inside sales or outside sales or some combo???) OR direct person-to-person selling through independent reps/distributors? OR online sales via an ecommerce website with demand driven by marketing and/or growth hacking and/or affiliate marketing, etc. with a skill set more focused on SEM, online advertising and other inbound demand-generation efforts?   This discussion thread has been focused on who he should hire and how and understandably so given his initial questions: "what is the role of the sales director in a new company?" and "How much would hiring a sales director or VP help with getting our product wider exposure that could lead to more sales?"  I submit that these are the wrong questions given his situation.  The questions are somewhat akin to saying "i'm in the transportation business, what kind of a vehicle should i buy and how much will it cost?".  The answers are different depending on a number of factors.  Are you transporting people across town? Are you transporting shipping containers across the country?  Are you shipping perishable goods around the world? Are you shipping oil from ND to TX?   He may need a ship or a cargo plane or a pipeline and we are debating Prius VS pickup truck VS 18 wheelers.  What we do know is that he's selling some consumer-electronics-like hardware (head phones and USB charging devices for mobile devices) to the education market (presumably in the US and presumably to public schools, and a number of other assumptions). You don't see too many manufacturers of consumer electronics selling directly with a face-to-face sales force unless you are Apple and that's a very difference animal.  We know that his products are somewhat differentiated from your run of the mill consumer versions of these products, but we don't know the price points or transaction volume or margins (not surprising on a semi-open forum that likes to auto-post to LinkedIn).  So, for example, if we assume that Mike is the foremost expert on his products (good assumption) and that he is the foremost expert on the buying process and habits of public school districts (based on his post on another thread) then if Mike was also an experienced sales person then his is the perfect candidate to sell his product.  So let's say Mike quit his job and is selling his product full time.  We don't know if a "typical deal" for Mike is $500 or $50,000 or $500,000.  So given my limited knowledge of consumer electronics and my limited knowledge of public school budgets and buy processes let's say in a good month mike can sell 1 - $10,000 deal to 1 school district every 2 weeks ($20k revenue each month) and his margins (GM) are 50% (fat for consumer HW i think?) then he's generating $10k/month in GP.  Mike has the contacts, he knows all of his competitors so he knows his differentiators and competitive advantage like he knows his own name.  He is articulate and motivated.  And he has nothing else to do but sell.  forget all of his other expenses for a moment.  If mike were to hire a sales person that is smart and articulate and has the capacity to learn what Mike knows and has the drive and ambition and skills to be successful with minimal supervision then Mike could be looking at a comp plan of say, $150k/yr. ($12.5k/month) - commission only and no base salary.   I don't know Mikes market so that's a wild guess, but reasonable.  The market doesn't know much about Mikes products because they are new to the market and this is a startup so Mike will have to pay a premium to get a qualified clone of himself.   He could go to Best Buy or Fry's or Verizon or Radio Shack (lots of Radio Shack sales reps available now) and recruit a $50k/yr sales rep. or he could go to Oracle or Salesforce or SAP or ? and hire a rep who's been making $300k/yr or $500k/yr.  At $12,500 in commissions/month that exceeds Mike's entire monthly profit - not a recipe for success.  To slice this another way, if we assume Mike can pay out 30% of his monthly profit in sales commissions (that could be a stretch) then each sales rep needs to generate about $42k/mon in GP or $84k in gross revenue. If the average sales is $1,000 that's 84,000 sales transactions/month/rep - 4,200/day/rep - not likely - clearly he needs to sell online and automate.  At an average deal of $5,000 that's about 17 transactions/month/rep or about 4/week. That's more reasonable, but still many stars need to align. And that leaves Mike and his partner about $29.4k/mon in profit left over to build and run the company (and my assumptions could be WAY off in terms of margins in either direction). In that scenario i would look closer at a direct sales model with a high ratio of inside to outside sales and heavy emphasis on building market awareness (marketing in it's various forms).  If the average deal is $500,000 and Mike can close these whales once per quarter then he clearly needs to have a direct sales force - people simply won't spend that kind of money online without a personal relationship with the vendor, but this also means he needs to recruit highly skilled sales people at more than $150k/yr (commission only).  These scenarios indicate clearly different skill sets, different recruiting approaches, different comp plans, etc.  If i were Mike i'd build a spreadsheet and do some 'what if' modeling to see what the numbers look like - this should have already been done before he hired independent reps.  A common problem with using independent reps to sell technology (even simple tech) is that they tend to sell what they know, what is easiest, what generates the most commissions and what they are told by their boss is important ...this month.  Getting and keeping their mindshare is difficult especially for a new product and new company.  If the $$ just isn't there then sales reps whether in-ouse or independent just won't get the job done.  He may find that he is better off selling online only and concentrating his efforts and $$ on advertising and marketing and demand generation and eCommerce capabilities. That's a long way of getting back to my original question:  "what are you selling, to whom and what is the value of a typical deal".  

Channel sales works when the company (product owner/manufacturer) drives market awareness which drives sell through. that means Mike would pour his efforts into product development and marketing and advertising to generate name recognition and demand that his channel partners can then leverage with their contacts/customer base. For its entire history until recently Microsoft was 100% channel - you could not buy a MS product from MS (unless you were government) and they are now putting more emphasis on selling direct. Google is a hybrid of direct and indirect, but mostly direct, but with high levels of demand generation, and automated fulfillment - when was the last time you got a call from a Google sales rep or channel partner selling a google product? You can buy their products retail, but we're not talking retail here.  DropBox sells direct but with heavy emphasis on online marketing and sales automation/fulfillment. As they put more emphasis on DropBox for business they will likely need to put more emphasis on relationship selling especially as they compete agains Box, MS, Google, etc.  It all 3 examples these companies are selling SW not HW and they have very high margins.  It all comes down to economics - can i afford to have a live body (whether said body is on my payroll or a partner's payroll) reaching out and touching live prospects/customers or not?

I don't believe you are at a point where a VP of Sales, Director of Sales or even a Sales Manager would be beneficial. You are in the hustling stage. A VP or Director level are both strategic in nature and a sales manager is going to be the person who implements it with the team. 

It depends on what you are selling but a direct sales model like you are building might be the wrong way to go.  In order to build a successful direct sales program you need good sales people.  Good salespeople are extremely difficult to hire because they often don't perform and you won't know until after you've had them working for months on payroll.  Instead I often recommend startups persuse an indirect sales program (channel sales program) that relies on partners and rewards them for performance.  

Mike: