Hi friends - Hope you’re having a lovely weekend. I’m going to stick to the theme of sales hiring for the rest of the month. Like it or not 😆 

Did you know that sales roles consistently experience the highest turnover rates across all business functions?

Yep, 30% or higher generally for all company sizes and 50-70% within startups*.

Let’s unpack why and how you can try to beat the odds.

How to reduce your odds of failure with your first sales hire

The statistics around sales hiring

Sales roles consistently experience the highest turnover rates across all business functions.

Here's how sales turnover compares to other departments:

Sales turnover rates vs. other functions

Note: The data above is generalized for all company sizes and industries.

Now, if we narrow our view to look at data within startups -

Startup sales failure rate data

1. 50%+ failure rate in the first 12 months

   • According to various VC insights, over half of early-stage sales hires at startups do not make it past their first year.

2. 30%–50% annual turnover in startup sales teams

   • Various sources, including Bridge Group and Modern Sales Pros, report that the annual turnover rate in startup sales teams ranges between 30% and 50%, higher than in established companies.

3. VC-backed startups see higher failure rates (70%)

   • According to a number of SaaStr studies, early sales hires at venture-backed startups experience 70% or higher failure rates, especially if hired before product-market fit.

Why early sales hires fail at startups

Now, let’s talk about why the failure rate is so high -

• Hired too early → Bringing in salespeople before product-market fit, or bringing in senior sales hires too early

• Lack of clear sales process → No repeatable playbook for success (remember what I told you last week…)

• Poor onboarding & training → Many startups lack structured training programs or resources (remember what I told you last week…)

• Unrealistic expectations → Founders often expect sales hires to "figure it out" without enough support + expect them to close more $$ faster than is reasonable.

• Mismatch in experience → Salespeople who have only worked at larger, more established companies often struggle at startups + salespeople with the wrong industry, ACV, etc. experience

What can you do to improve your odds

• Do not hire a salesperson before you have -

  • at least early signs of product market fit (i.e., 10+ customers and/or $1mm+ ARR), and

  • 80% of what is on this checklist

• Do not make your first full-time hire a VP of sales or CRO (i.e., don’t hire too senior - too early)

• Consider hiring a fractional sales leader first to help you -

  • Build a strategy, comp plan, and realistic expectations around sales hiring, and

  • Build out the foundational elements mentioned in the checklist 

• Build out a detailed Ideal Candidate Profile*

What the heck is an Ideal Candidate Profile?

I’ll unpack that next week. See ya there!

Some related content to check out

• Preparing for your first hire: A checklist for founders

• When to hire an SDR

• When to hire an AE

• When to hire a VP of Sales

• When to hire RevOps

Want to learn more about how I help startups increase their revenue by 150-590%? 👀 

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With love and gratitude,