Aug 23, 2024, 9:58 AM ETInterview, Fireside Chat

Chad Peets: Why Most Sales Reps Underperform & Remote Reps Ignore Development | E1193

Exceptional sales performance requires a willingness to make personal sacrifices, such as a daily commute, to accelerate career growth; a candidate unwilling to do so is rejected.
"Culture" is defined by the pursuit of winning, meritocracy, and professional development rather than traditional benefits or strict work-life balance metrics like hours at home.
The speaker believes innate selling ability is a binary trait; while skills can be taught, the fear of the phone and the ability to think three steps ahead are inherent.
The current talent market is increasingly difficult because fewer candidates are willing to "care" deeply enough to put in the necessary work to become the best in the world.
Recruiters should target candidates motivated by development and the desire to work with world-class products, not just those seeking a "hot" company to ride a rocket ship.

Sutter Hill brings in a CRO before product launch, a strategy the speaker argues is critical for founders who typically lack sales expertise to conduct necessary market discovery.
Founders and VPs of Engineering are not qualified to create the initial sales playbook because they lack the time to make thousands of prospecting calls and the specific skill set for sales discovery.
The CRO must conduct thousands of calls during the alpha/beta phases to validate product-market fit and define the necessary feature set before the product is built.
A pre-product CRO is essential to prevent building a product based on internal assumptions rather than direct customer feedback, which could lead to building features for a single account that kills the company.
This approach requires larger seed funding (around $10M) to support the CRO and early team, rather than the typical $2–3M seed round.

Selling to a single vertical limits Total Addressable Market (TAM); horizontal companies are preferred unless the vertical market is massive enough to sustain growth alone.
Product roadmaps must be co-designed with the CRO, who defines the features required to expand the Ideal Customer Profile (ICP) from, for example, 50 to 150 accounts.
A major failure mode occurs when sales teams are hired without the requisite product features to target new ICPs, causing reps to chase large, unrepresentative accounts that drain resources.
Sales leaders must capture customer data and pain points to feed Product Marketing, rather than attempting to create marketing content directly, which is a distinct skill set.
CEOs must enforce collaboration between Product and Sales; siloed operations lead to a cycle where Product builds what they want and Sales fails to sell it.

The ideal recruiting metric is "two candidates interviewed, one hired," achieved by deeply understanding the candidate's motivations and background to avoid unqualified applicants.
Interview processes must be binary and strict; candidates must be rejected immediately if they do not meet the profile, regardless of manager preferences or "culture fit" concerns.
The speaker advocates for "hire fast, fire fast," warning against letting hiring delays jeopardize next year's revenue forecast.
A previously high-performing rep often becomes a non-performer after three years due to burnout from the grind of pipeline generation; these individuals typically move to established corporations to avoid startup intensity.
Hiring managers should not allow engineers or HR to veto sales hires; only those who have sold similar products possess the qualification to assess sales candidates.
The speaker admits to a weakness in diplomacy, noting a need to be less confrontational when delivering hard truths or rejecting candidates.

Incentive structures should be tuned to behavior; for example, increasing commission percentages on expansion revenue to address slow land-expansion cycles.
Unit economics must support the sales motion; a $10k ACV deal generally requires an inside sales model, while field sales is reserved for deals roughly three times the inside sales OTE productivity.
Ramp times should be targeted at 90 days for inside sales and 6 months for enterprise field sales; longer timelines usually indicate enablement or product issues.
Customer Success (CS) should manage product implementation and utilization to drive value, but the sales rep must remain responsible for the expansion deal to ensure the "land" doesn't negatively impact the "expand."
Separation of PLG (Product-Led Growth) and enterprise sales motions is recommended; nailing one does not guarantee success in the other, as the value propositions and buying committees differ significantly.
Founders often err by moving to enterprise sales too early (e.g., at $3M ARR) without first validating the product with mid-market customers to ensure feature stability.
Gross Revenue Retention (GRR) is the primary indicator of product quality; Net Dollar Retention (NDR) measures growth and go-to-market effectiveness, but a slipping GRR signals a fundamental product problem.

Forecasts must be driven by business reality and data, not by arbitrary numbers set by a CEO to justify a valuation for fundraising; misaligned forecasts lead to leadership turnover.
The biggest mistake founders make when scaling is hiring the wrong CRO because they cannot articulate what they are looking for in a sales leader.
Onboarding must be a programmatic, multi-month investment with dedicated resources; expecting revenue immediately upon hire is a critical error.
Early-stage companies may need to accept negative margin deals to secure referenceable accounts that validate the ICP, though this becomes less critical later in the lifecycle.
The speaker advises new sales leaders to prioritize understanding the business and talking to customers immediately to add value to their teams.
The "coin-operated" stereotype of salespeople is dismissed as bullshit; effective sales leaders care about the company's long-term success and career development.