So you read my post on how to answer interview questions. Now after that, Tech Sales Mentors students will end up with ~3 offers. So which one should they use?
Well, let's first talk about how people generally do it.
There's two things that happen when I talk with someone who wants to break into tech sales or recently did:
This post is a guide for how Tech Sales Mentors students select companies to reach out to when they're trying to get their first job in tech sales. This helps them pick the right company the first time and move on to bigger & better, faster.
So let's begin!
This being your first job in tech sales, you don't have the knowledge yet to excel at the job. What you do have is a sponge-like mentality. You're going to soak up all the knowledge that you get.
But all knowledge isn't created equal. So you better make damn sure to find successful sales leaders to teach you these skills.
When you're looking at the SDR Manager (your manager) & the VP/Head of Sales (leader of the Sales team), you want to look for...
Did they excel at the same role in a previous company?
It can be hard to know if they did well in the role. The best indicator is how they performed against their quota. Look for someone who outperformed their quota over many years. The best place to look for this is on their LinkedIn. But, keep in mind plenty of people don't list this information. Not because they're hiding shitty performance, rather that level of transparency is weird.
A less strong, but more available indicator is how long they stayed there. Sales employment is performance driven. Venture capitalists have high expectations for sales leaders at high-growth tech startups. If they miss quota quarter after quarter, they're gone. So if they're a sales leader at a company for many years, it likely means they're performing well.
Is their previous company similar to their current one?
In the software world, building a successful sales team is closer to a science than most realize. If a sales leader excelled at one company, they can go to a similar type of company and run that same "playbook".
When I say a similar type of company, I don't mean a competitor. That one is obvious. Rather, I'm talking about a company that has a similar deal size. For instance, if their previous company sold $1,000 deals, I trust that leader to be able to do it again. But I'm not as confident that the leader can sell $100,000 deals. Different deal sizes require different skill sets.
Look for high growth rates
Remember how I said venture capitalists have high expectations? That high expectation is a high growth rate. A high growth rate is a clear indicator that sales leadership figured out how to sell a product that customers want. If the product doesn't solve a problem, you're wasting your time trying to sell it. It doesn't matter how good of a salesperson you are.
Paul Graham, one of Silicon Valley's best investors, has a great post on startups & growth here. Paul's blog is a masterclass in startup education, read it!
Paul simplifies the growth cycle of a startup into 3 parts.
Selling something people want is hard enough. Trying to figure out what people want adds a whole other level of complexity. So your first job in sales should be in the 2nd phase of startup growth. You can try your hand at phase 1 after mastering phase 2. We'll chat later about why you want to avoid phase 3.
There's no magical number here, but remember how we said sales is part-science? Those startups growing ~75%+/year tend to work out.
This is as important part of the equation as choosing to work for the right sales leadership. So let's jump into what you should consider when it comes to product:
Do you believe?
As a salesperson, you sell. Duh. But think about what you're telling people all day long. How the product your selling is the solution to their problems. Do you actually believe that? Does that actually get you fired up?
If you aren't interested by the product, you will hate a role that requires you to act interested in it all day long.
Who are you selling to?
This is the least discussed aspect of tech sales - listen up. There are lot of tech companies in the world. And based on who you're selling to requires different sales skills. You can sell software to different departments in a company - human resources, finance, sales. But who & what you really want to sell to is...
Technical products to developers. Developers are coders/engineers who create software products.
Selling to developers has exploded over the past few decades. It will become the dominant form of tech sales in the future. This is because of two trends:
With the change in what's sold & how it's sold, selling to developers is the in-demand skill you want. It's the subcategory within tech sales that requires the most sales skills. Here are some of the traits you need to show you have the potential to master:
Taking the role that will give you the most skills is especially important in tech sales. Your parents would stay at a company for decades. In tech sales, you'll stay at a company for 2-5 years. Since you'll be in the job market every 2-5 years, you want to have experience that gave you the most sales skills. That will give you a leg up vs your peers, who are competing for the same jobs. Selling to developers will allow you to pick from better, higher-paying opportunities.
Making the transition from selling to HR organizations to developers is a tough jump. While the HR selling reps might be capable, hiring managers prefer a rep who sold to developers.
That's why it's critical for you to make sure your first role in tech sales is selling to developers. For that entry-level role, hiring managers aren't asking for experience with developer sales. All they ask for is the right attitude and personality! After you sell to developers, it's much easier to switch companies (selling to HR, or any other department you're interested in). It's much more difficult to do it the other way around.
Bottom line: Your first role in tech sales should be selling to developers. It's fast growth is making it a more in-demand skillset. This path will set you up for better, higher-paying sales opportunities throughout your startup career.
You do not want your first sales job to be at Salesforce, IBM, Google, Oracle, or any other well-known, large company.
This is a very counterintuitive point. Society's acceptance of big companies justify it as 'right' employment option for us. When we join a big company, it signals to others that the big company accepted us. Big company employees proclaim they work there because it's a form of prestige. Society associate that employer's success with the employee's own success.
But the reality is much different. Let me explain why taking your first job in tech sales at a big company won't set you up for success.
There's a saying from the 80's when IBM was the most common choice for businesses trying to buy computers.
Nobody ever got fired for buying IBM.
Do you want your sale to be so easy that it's the obvious choice vs competitors? Well, maybe. Maybe you want a more relaxed job where it doesn't require as much sales skills and effort.
But let's look at the downside of that. In 2-5 years, when you're looking for your next sales gig, hiring managers will discount you. They will see you worked for a well-known brand that faced little competition. How are you going to sell a product that buyers have never heard of in a sea full of better known, larger competitors? This will limit your opportunities and earnings potential.
This is why you want to join a startup.
Again, this is why choosing the right first role in tech sales is so crucial. When it's your first role, you have that leeway of the employer not caring about your work experience. They care about your work experience if it's your 2nd, 3rd, 4th job in tech sales.
You're not going to be raking in the big bucks as a SDR. While you make a lot of money in tech sales - that will happen on your 2nd, 3rd, and so on roles. For instance, I know a kid that is 3 years into his tech sales career making ~$200K/year as an Account Executive (AE).
Having said that, look out for these things when you hear what your offer is. Employers are incentivized to hire you for the lowest cost you will accept. They especially take advantage of SDR's, who are new to getting full-time offers.
On-Target Earnings (OTE)
Your total salary is your on-target earnings. It's made up of two pieces:
You want to shoot for a salary of $70-80K OTE (if you're in San Francisco/New York). If you're settling for less than that, you are not getting a fair market rate. I'd also worry less about comparing jobs based on a few thousand dollars difference. Instead, focus on the topics I mentioned above. That is long-term thinking that will maximize your career opportunities & pay.
The real money in sales is made off your bonus
So let's walk through some numbers. I made $80K OTE in my first job in tech sales. It was $65K base and $15K bonus.
People love sales because the better they perform, the more money they make. They love that direction correlation between the two. That's why you want to avoid companies that cap your commission. As an example, Oracle has an $80K OTE (I believe the split is $50K base, $30K bonus) with capped commissions. Oracle doesn't care if you hit anything over 100% of your quota, you only get paid up to 100% of it. So if you hit 200% of your quota, you'd only get paid a $30K bonus, not a $60K bonus.
This is another reason to join startups. Startups are so laser-focused on growth that they incentivize you with 'kickers' to crush your quota. For instance, when I hit 120% of my quota, they structured my compensation to pay me as if I hit 130-140% of my quota.
Avoid unachievable quota targets
Now seeing a big potential bonus might make you want to jump on that offer, but hold your horses. Do you know how difficult it is to meet that quota?
It doesn't matter how big the bonus is if you can't meet your quota. If only 30% of the company is hitting their quota, RUN! Those companies focus on things that do not include making sure you as a rep are successful. Joining those companies will hurt your career & financial future.
You want to join a sales organization where ~75% of the team is hitting their numbers. That signals to you that the company is making the team shoot for goals that are actually attainable. Which means it's possible to actually receive that bonus.
And last but not least, let's consider the type of SDR program you'll be entering.
In sales roles, you're judged on your performance. They don't care how much work you put in (inputs), they care if you crushed your quota or not (outputs). But due to SDR's inexperience in sales, there is more oversight into those inputs. Sales orgs make SDR's follow best practices that produce satisfactory outputs.
That added oversight makes sense. But that level of oversight can differ.
Some sales orgs make you hit daily targets - cold call this many prospects and send this many emails out per day. SDR's roles are difficult in general, but this makes it downright brutal.
Once again, this is why SDR's should work for earlier stage startups. When such a small team has more responsibility, there's less time for oversight. That means there's less process so there is more freedom on how you will decide to go about hitting your quota.
This freedom is important. We all want ownership in how we get shit done. Someone looking over your shoulder, day in and day out, is a micro-managing relationship you should avoid.
Now don't get me wrong, you're still going to have to work hard. But you'll have more creative freedom on how you achieve your outputs.
Time to promotion
The ultimate goal of the SDR program is not to stay in it. Being an SDR is tough. The goal of it is a promotion into a higher responsibility sales role. This post talks about what roles you can get promoted into.
Most SDR's transition into being an AE. So we'll use that as an example.
You should aim for a company that promotes in a 12 - 24 month range. Ideally, it's closer to 12! Anything more than that, and you're taking an opportunity that isn't as good as what's out there.
So ask the employer about it & you can also verify yourself. Check some of the existing AE's at the company. Were any of them SDR's at this company before? How long did it take them to get promoted? Additionally, you can look at SDR's at the company. Are many of them in the role much longer than the employer said was the length of the program? If so, that's a worrying sign.
Whew, that was a lot. But I cannot stress enough how important it is to choose the right first company. Usually, SDR's stay at a company for ~3 years.
This is because to graduate from an SDR program, you have to do it within a company. You can't be an SDR at one company, and get a job as an AE elsewhere. So when you graduate from the SDR program and become an AE, you need to now get enough experience in closing deals. Only then will employers come to you with high-quality, high-paying opportunities at a new company.
You want to avoid a common problem I see many first-time SDR's make. They join a company without thinking through some of the things we mentioned above. They end up hating it and leaving. Then they restart the SDR program & the 3-year cycle at another company. This adds unnecessary time & work to you getting into higher-paying sales roles.
So before Tech Sales Mentors students choose an offer, we go through what we chatted above. We make sure it checks the boxes. We want their first SDR role to set them up for the best & highest-paying opportunities when they get back on the job market in ~3 years.
Thank you to those who contributed to this essay through feedback and conversation: Rishika Raichandani, Juliena Tran, Marcus Rider, Vishal Arya, and Tobias Abdon.