How to reduce your odds of failure with your first sales hire
Why 50-70% of startup sales hires fail and how to improve your odds of success
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
Function
Average Annual Turnover Rate
Sales
25%–35% (can exceed 50% in startups)
Customer Support
20%–30%
Marketing
17%–20%
Operations
10%–15%
Finance & Accounting
8%–12%
Engineering/Tech
10%–15%
HR & Recruiting
12%–18%
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
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.
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.
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
With love and gratitude -
If you want to learn more about working with me directly…
For B2B startups I serve as a Fractional GTM executive or advisor. Learn more about-
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