The Rabid Pack

I am a member of the Jason Nation and over on the Launch blog Mr. C has a nice article. The overall post itself is about management misdirecting employees. While I don't always agree with everything Jason says or does he nails the startup sales equation. 

Dealing with a rabid pack of sales wolves is perhaps one of the hardest management challenges in business.

Sales people are an odd group of mercenaries, and the best ones seem to have a perverse sense of competition and drive that is unique in the employment landscape. They are very aware of incentive structures and seem to love being put in them.

They like having a percentage of sales targets to hit, and levels and bonuses associated with certain milestones. The more complicated a structure and game, the more turned on and tuned in they seem to become.

Great sales folks seem to look at life as this huge casino or Zynga game, where they are placing 20 bets on five different tables.

I've long learned to embrace this dynamic at new companies by setting

a) absurdly low base salaries (think $30K to 60K)

b) absurdly high commission structures (10% to 25%)

Why?

It's a filtering mechanism for me to get the most insane, rabid and self-confident sales folks — and filter out the lame "professionals." The times I've put up six-figure bases and the standard 3% to 5% commission structures, I've gotten the weakest, non-rabid, meek sales executives who are more concerned with driving almost fancy cars, wearing fine clothing and having lush expense accounts than their actual commission structure.

Those sales folks are death at startups. They lack the drive and creativity to sell new products  because they are — largely — old, fat dogs.

At some big company with 300 sales folks, they're great for managing existing accounts. At a small company with under 10 sales folks, those "professional" sales types are the kiss of death. They need everything handed to them on a silver platter, and they can't close deals because of the product, the marketing kit or the fact that we're doing something new.

In fact, two sales folks I gave the low-base-and-high-commission structure to easily broke $500K in *commissions* for me in the first two years of the Silicon Alley Reporter and Weblogs Inc.

They both made fives times what I made as CEO — and I loved it.

Startups need hungry hunters that want to kill.

July 22, 2011  |  Comments  |  Tweet  |  Posted in Entrepreneurship, Management, Startups