When to hire an SDR

When to hire an SDR as an early stage startup

Jess Schultz
May 05, 2024

Hi friends - I decided to move this newsletter to Sunday. Hopefully this finds you with more time and a clear mind. 😁

This month I want to talk about some of the most common sales hiring questions, decisions, and mistakes I hear and see in early stage startups.

When should I hire an SDR?
When should I hire an AE?
When should I hire a VP of Sales?
When should I hire RevOps?

We’re going to start at the top of that list this week - with the SDR question.

When should I hire an SDR?

What is an SDR?

An SDR is a Sales Development Representative, sometimes also referred to as a Business Development Representative.

SDRs focus on outbound prospecting, lead generation, and preliminary lead qualification rather than closing deals. Their goal is to move qualified leads to the earliest stages of the sales pipeline.

Most SDRs have less than 1 year experience coming into the role and the average lifespan is roughly 6-12 months in SMBs.

This is the most entry level, least experienced, highest churn sales role out there.

When should you hire an in-house SDR?

Not any sooner than late* Series A in my opinion.

When you have -

strong signs of product-market fit and therefore a strong understanding of your ICP, buyer persona and value prop
an internal resource who has the sales expertise and capacity to train, coach, and manage this entry level resource

Why?

Because again, this is the most* entry level role, with the highest churn* and it’s unlikely that you (founder), or your early stage team, knows how to manage an entry level sales resource like this.

Do you know how to train them to prospect? Build lead lists? Write effective outbound copy? Automate outbound? Measure performance?

Almost always in my experience, the answer to the above questions is…no, you don’t. So if you don’t know how to manage them, and they can’t manage themselves (entry level), you aren’t ready to hire them.

Getting results from cold outbound is an art.

This is a visual I love to support my point:

What alternatives do you have in the meantime?

Hire a fractional VP of Sales or CRO (👋 ) to teach you how to build a scalable process to run outbound from your identity as the founder. Someone to train you and write the playbook so that you can eventually hire an in-house resource successfully.
Hire an SDR agency

Let’s explore these two options in greater detail…

	Fractional CRO	SDR Agency
Price	$8-10k/month	$5-8k/month
Pros	- Learn how to do it yourself (learn how to fish) - Full visibility and control, and therefore the ability to iterate quickly - Experienced high-touch support, fractional execs are well versed on the best tools, tactics, and techniques for success - Temporary or short-term investment for long-term results - The fractional exec can help you with more than just top of funnel outbound	- You don’t have to learn how to do it yourself - Most agencies have relatively short term contracts (3-6 months) making it a low risk investment - Experienced support, agencies are well versed in the best tools, tactics, and techniques for success - The agency will produce detailed performance metrics and iterate accordingly - The agency will already own/pay for all the tools and data needed
Cons	- Requires your time to learn and manage - You’ll need to buy the data and tools to automate and measure performance	- Requires your time and energy to educate the agency on your business - When you end the contract, the leads end. You don’t own the playbook, data, or tools. - Less visibility and control, slower feedback loop to iterate

Fractional CRO

SDR Agency

Price

$8-10k/month

$5-8k/month

Pros

- Learn how to do it yourself (learn how to fish)

- Full visibility and control, and therefore the ability to iterate quickly

- Experienced high-touch support, fractional execs are well versed on the best tools, tactics, and techniques for success

- Temporary or short-term investment for long-term results

- The fractional exec can help you with more than just top of funnel outbound

- You don’t have to learn how to do it yourself

- Most agencies have relatively short term contracts (3-6 months) making it a low risk investment

- Experienced support, agencies are well versed in the best tools, tactics, and techniques for success

- The agency will produce detailed performance metrics and iterate accordingly

- The agency will already own/pay for all the tools and data needed

Cons

- Requires your time to learn and manage

- You’ll need to buy the data and tools to automate and measure performance

- Requires your time and energy to educate the agency on your business

- When you end the contract, the leads end. You don’t own the playbook, data, or tools.

- Less visibility and control, slower feedback loop to iterate

Not all fractional CROs or SDR agencies are created equal and it will be critical for you to thoroughly vet either through referrals and reference calls.

But either option is almost always going to be better than you hiring an entry level SDR at first…the blind leading the blind.

And the reality is, every single hire (in-house or contract) is a risk. I’d rather reduce my risk with someone who is more experienced as an early stage startup with limited budget and limited time.

Particularly since outbound has gotten increasingly more difficult from both a technical perspective and from a conversion perspective.

The number of touch points per opportunity sourced through cold outbound has gone up 5x in the last 5 years (!!).

And there are a lot of amazing fractional execs and great SDR agencies out there. If you need a recommendation, feel free to ping me or book a call with me.

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See ya next week!

With love and gratitude,

Jess Schultz

Founder & CEO

Amplify Group