Ask YC: Any startups here have luck outsourcing sales?

https://news.ycombinator.com/item?id=390029

by shafqat • 18 years ago

15 12 18 years ago

news.ycombinator.com

As a small startup, I think the CEO should definately be doing sales. But to supplement the CEO, has any startup on HN had success outsourcing their sales? Or hiring salespeople on a commission basis.

prakash2• 18 years ago

I have met companies that did outsource sales, and the results were disastrous. Rather than looking at sales, you should be looking at Customer Development: http://venturehacks.com/articles/customer-development

webwright• 18 years ago

I like the customer development stuff, but that's really totally different. It's not an alternative to sales/marketing (but it is something you should do first, and in an ongoing way). If you do it right, lead gen and sales gets a LOT easier. But it doesn't get so easy that you don't need to do it. Salesforce.com spends 60-70% of their topline on sales/marketing. PG had a salesguy with Viaweb. Sales works, and for any B2B company, you have to do it (unless you're 37signals).

At the end of the day, you need to get buyers and only a tiny percentage of buyers is overtly hunting for what you have-- meaning that the vast majority of your buyers are receptive but not seeking you out. Enter, sales.

If you have a product that you're selling to businesses this means that someone actually hits the pavement to go fill a sales pipeline (lead gen), works to convert that pipeline to customers (sales), and works to upsell current customers to bigger and better things. This can be one person or several, more specialized people.

prakash2• 18 years ago

I did't mean you shouldn't do sales, just that customer development precedes sales. I understand the value & importance of sales, did that for Akamai for 3+ years.

brk• 18 years ago

It depends on what you're selling and how you're selling it.

A lot of the startups on HN are web-based companies, and if your pitch is tight and concise, you can outsoruce some of the early (tele)sales pretty effectively. There are lots of companies that specialize in outbound/telesales. If you can bring them good qualified leads (like through a web signup form, or other self-selected method) then sales outsourcing in that scenario can be very effective.

If your sales cycle is long, complex, or otherwise requires more face-to-face time, then outsourced sales are unlikely to be very cost effective for you.

Early sales people can be found on a commission basis, but you need to really know your target price and market pretty well. Base vs. commissions, recoverable draws, over-plan accelerators and such all need to be thought through somewhat carefully to make sure you don't end up in a regrettable situation.

Without more info on your company, product, market, etc. it's hard to give more finite advice.

answerly• 18 years ago

I spent ten years running various types of sales organizations and have never had a positive experience in outsourcing sales. I have hired outside consultants with experience selling in certain areas to make warm introductions to companies in their rolodex. But, in these cases, me or my team always handled the sales process. The consultant simply received a spiff if one of their warm leads turned into a sale. Sales is just too core of a function to be trusted to outsiders. Also, early on, the sales process is your best source of constructive feedback on the product, pricing, etc. You need to hear that directly- an outsider won't be able to communicate that effectively.

FredSource• 18 years ago

I would recommend against it. I co-founded a small enterprise SW company and we tried several "commission only" sales people and teams. This become a time sink. No success what-so-ever!

When we focused on doing it ourselves things picked up. One "trick" we used that worked was to 'SPIFF' sales people who had complementary products to give us leads. This lead to our eventual acquisition ...

tm• 18 years ago

What is SPIFF?

jbyers• 18 years ago

http://en.wikipedia.org/wiki/Spiff

ocskills• 18 years ago

Hiring salespeople purely on commission is tricky. It shifts all the initial risk to the side of the salesperson. Therefore people willing to work that way often want a big slice of the revenue and aggressive payment terms. While the lack of up-front risk for your company is nice, the commission terms can come back to haunt you if your product / service becomes successful.

cardmagic• 18 years ago

I have had enormous success with lead generation with the help of TimeSvr (http://www.timesvr.com/). $60 a month and they can spend hours a day coming websites for email addresses, sending personalized emails, and tracking their actions and progress in CSV files.

redsymbol• 18 years ago

This looks pretty amazing. On their pricing page, they claim that the $60/month plan is specifically for individuals, not business use, though - how do you get around that? Just sign up for a personal plan, and so far they let you use it in the way you describe?

shafqat• 18 years ago

Can we have some more details? This looks interesting, but I can't see how you used them. They look like Mechanical Turkers - did you just give them detailed instructions?

Ask YC: Any startups here have luck outsourcing sales?

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