Brendon Cassidy: Why You Should Never Hire Someone You Do Not Know in Your First Five Hires | E1124

Intro (0s)

• Brendon Cassidy expresses excitement about the upcoming discussion.
• Cassidy and the host acknowledge that it has been a while since they last met.

Brendon’s Background (45s)

• Cassidy entered the tech world around 1999-2000, starting his career as a recruiter during the dot-com bubble.
• The dot-com bubble burst led to a collapse in the recruiting industry, forcing Cassidy and his colleagues to adapt and reinvent themselves.
• Cassidy highlights the importance of adaptability and convincing others of one's expertise, which became essential skills during that challenging time.
• Despite their lack of experience, Cassidy and his colleagues went on to achieve significant success in their careers.

Changing Landscape of Sales (3m27s)

• The traditional sales strategies and tactics are no longer effective.
• The focus has shifted to unlearning bad habits and adapting to new market conditions.
• The old customer acquisition costs are no longer relevant.
• Outbound sales and marketing models have become obsolete.
• Startups are now laser-focused on break-even, profitability, and long-term sustainability.

The Decline of Outbound SDR Model (5m36s)

• The outbound SDR model is no longer effective due to market saturation and competition.
• There is a need for new and innovative ways to reach customers.
• Leveraging relationships, influence, and referrals can be an effective way to accelerate growth.
• Many companies are still operating with outdated outbound SDR models due to a lack of better alternatives.
• The current market conditions make it difficult to create personalized outbound marketing campaigns that stand out from the competition.

Impact of AI on Outbound Sales (7m17s)

• AI's impact on outbound sales is significant and complex.
• The shift of demand generation from marketing to sales has caused problems.
• Great VP of sales are unlikely to accept jobs in companies that rely on an outbound go-to-market model for growth.
• Many founders cannot clearly articulate the problem their company aims to solve or why they are the ones to solve it.

Defining a Sales Playbook (9m5s)

• A sales playbook is not a canned response but varies depending on the company and its circumstances.
• It should be rooted in understanding the customer's thinking, pain, psychology, personal opportunities, fears, and upside.
• Brendon Cassidy believes in selling to a person, not a company.
• Spending hours doing discovery calls is unnecessary if the salesperson has already researched and understood the customer's problems and psychology.

Importance of Customer Understanding (10m36s)

• Understanding customers is crucial as their problems and pain points are finite.
• Knowing the different paths and potential turn-offs helps in effective customer conversations.
• VPS sales can be improved by deeply understanding the customer's perspective and needs.
• Knowing the customer's world and true pain points is essential for successful sales conversations.
• Great teams have a mapped-out understanding of their customers, avoiding unexpected challenges during calls.

How Discovery Should be Like (12m20s)

• Discovery should be a means to an end, not a prolonged process.
• Discovery should be limited to 5 minutes, indicating a lack of effort in understanding customers if it takes longer.
• Teams should map out and execute the sales process within a 30-45 minute call.
• Founders should create a loosely built Playbook outlining successful strategies and approaches.
• The VPS team should eventually write the detailed Playbook based on their experiences.

Hiring VP of Sales First vs. Sales Reps (14m36s)

• Founders should be actively involved in early sales.
• Hiring a VP of sales as the first sales hire is not recommended.
• Founders who lack sales experience may need to reconsider their assumptions.
• Successful SaaS companies often have active founders in early go-to-market.

Hiring Multiple Sales Reps at Once (15m26s)

• Hiring two sales reps at a time can be advantageous.
• Hiring two different types of people can be beneficial.
• It's difficult to assess salespeople accurately.
• Salespeople are often not entirely honest on their resumes.
• Hiring sales reps "off the street" is risky.
• The odds of finding successful sales reps through online job boards are low.
• For the first five sales hires, it's best to rely on referrals from trusted individuals.
• Investors are not always reliable sources for hiring recommendations.
• Advisors or influencers in the industry can provide valuable recommendations.
• Consider forming a five-person advisory team to assist with hiring.

Structuring the Hiring Process for Sales Reps (19m32s)

• Always have candidates do a demo or mock sales call based on what they currently sell.
• A panel of experienced sales hires should unanimously approve the candidate's pitch.
• This creates a high standard, but it ensures that candidates can effectively sell their product.
• For SDRs, focus on hiring individuals with coachable characteristics and potential for growth.
• After the first three to five hires, focus on aptitude, talent, coachability, ambition, and work ethic.
• Avoid hiring individuals with extensive experience in large tech companies, as their skills may not be transferable to a startup environment.
• Look for candidates who are willing to take on the challenge of convincing prospects that their problem is legitimate and worth solving.

Financial Incentives for Sales Reps (23m44s)

• Pay sales reps a high percentage after they cover their operational costs.
• This ensures that sales reps are profitable and not a cost center.
• The EchoSign model is a good example of this type of compensation structure.

Common Mistakes in Hiring Sales Reps (25m24s)

• Expecting to hire successful sales reps off the street can lead to a high turnover rate.
• Signs that a sales rep is not working out include:
  • The founder feels the need to take over and run calls for them.
  • The sales rep does not seem to be improving over time.
• Running a tight monthly sales process helps prevent sales reps from pushing deals out and making false commitments.

Onboarding Sales Reps (27m19s)

• Give new sales reps time and training to onboard effectively.
• Founders should initially accompany new reps on sales calls to provide guidance and support.
• Utilize sales call recordings and demos for reps to analyze and learn from.
• Encourage reps to listen to relevant sales calls to gain insights into the sales cycle.
• Consider using a tool like Gong to facilitate call analysis and learning.

Firing Sales Reps (29m5s)

• Avoid adhering to a strict "fire fast" philosophy without considering individual circumstances.
• If multiple sales reps are being fired quickly, it may indicate broader issues beyond individual performance.
• A quarter plus some change is a reasonable timeframe to assess a rep's progress.
• By the end of the second quarter, a rep should be fully ramped up.
• If a rep falls short in their first quarter and shows no improvement in the second quarter, consider letting them go.

Brendon’s Biggest Mistakes in Hiring (29m57s)

• Enticed by resumes and experiences that may not reflect current abilities.
• Hired someone who looked great on paper but turned out to be a poor fit for the company culture and performance.
• Realized that investing in and promoting proven internal talent is more effective than hiring externally.
• Emphasized the importance of hiring people who have sold within the same ballpark of price point, sales cycle, and velocity.
• Hiring someone with a very different sales background can create tension and a high failure rate.

Deal Reviews (34m27s)

• Brendon Cassidy shares his approach to conducting efficient deal reviews.
• He emphasizes the importance of monthly reviews, where salespeople commit to deals and identify potential deals.
• Cassidy highlights the correlation between customer communication and the likelihood of a deal closing.
• He suggests that a lack of communication for more than three days indicates potential issues with a deal.
• Cassidy stresses the need for constant communication with customers throughout the sales process.

Dealing with Lost Deals (36m47s)

• To increase the chances of winning deals, it's crucial to be present at every layer of the deal, from the C-suite to the evaluators, decision-makers, and users.
• Losing a deal is usually not about what was done wrong in the final stages, but rather about what wasn't done or established earlier in the sales cycle.
• When a partner recommends someone, it's important to do your own due diligence and not rely solely on the partner's recommendation.
• Brendon Cassidy won a deal against DocuSign by focusing on every evaluator and user, while DocuSign relied solely on their partnership with Salesforce.
• Cassidy's strategy of checking in on every evaluator and user daily and rehearsing witness statements with them proved to be successful in winning the deal.

Quick-Fire Round (43m32s)

• Sales tactics that have not changed in the last five years:
  • Salespeople dependent on an SDR team to drive their own deal flow will always be successful.
• Sales tactics that have died:
  • Outbound SDR model is declining.
  • AI will likely take over demand generation, which most VPS of sales do not want to own.
• What Brendon would most like to change about the world of sales:
  • He wants to see a world where startups start their sales process as close to the customer as possible to mitigate risk.
  • He does not believe in the traditional methods of sending mass emails and making thousands of calls.
• Company sales strategy that Brendon has been most impressed by recently:
  • Rippling:
  • CRO used to work with Brendon at EchoSign.
  • Has built a super team.
  • Talkdesk:
  • Adjusted to the current market conditions and is now doing well.
  • Lantern:
  • A Rippling for the sales Cloud type of play.
  • Incredible early founders and traction.
• General observations about the market:
  • When the market is down, there is a bounce in early-stage startups and founders.
  • Super talented people tend to flow into the early-stage world when the risk is mitigated between a big company and a startup.