The Unicorn Blueprint
WITH DANIEL FRANKENSTEIN, CO-FOUNDER & PARTNER AT JOULE VENTURES
In the ever-evolving landscape of startups, the journey from inception to achieving unicorn status is fraught with challenges. CEOs and sales leaders alike must navigate a complex maze of decisions that can make or break their company. In a recent episode of Tech Salescraft, Daniel Frankenstein, Co-Founder & Partner at Joule Ventures, and his guest dove deep into the nuances of building successful sales teams and the critical role of CEOs in driving company growth.
Timing is Everything
One of the most significant takeaways from the discussion is the importance of timing in hiring a sales team. For early-stage startups, rushing to hire a salesperson before there’s a proven product-market fit can be detrimental. Daniel emphasised that founders often make the mistake of hiring too early, particularly when they haven’t closed a POC (proof of concept) or secured a paying customer. As he succinctly put it,
“If you’re looking to expand before you’ve maxed out your current team’s capacity, you’re probably hiring too early.”
The Art of Selecting the Right Sales Talent
Choosing the right salesperson for a startup, especially in its early stages, requires a nuanced approach. Daniel advocates for hiring individuals with functional expertise, particularly when the product is complex or operates in a specialised field like cybersecurity. This ensures that the salesperson not only understands the product but can also extract valuable insights from early customer interactions.
“Functional expertise is not just about selling—it’s about validating your product’s place in the market,” Daniel noted, highlighting the importance of having salespeople who can ask the right questions and drill down into customer feedback. This approach is crucial for ensuring that the product evolves in the right direction, setting the foundation for long-term success.
The CEO’s Role: More Involved Than Ever
A common misconception among founders is that hiring a sales team means they can step back from sales activities. In reality, the opposite is true. The CEO’s involvement becomes even more critical once a salesperson is hired. Daniel stressed that founders must remain deeply engaged, providing ongoing support and ensuring alignment between the sales team and the company’s broader goals. This includes regular catch-ups that go beyond what’s documented in the CRM, focusing instead on overcoming immediate challenges and strategising for future growth.
“The moment you think you can disengage from sales is the moment your company starts to lose its way,”
Daniel cautioned, underscoring the CEO’s role as a product support leader, tightly integrated with the sales team’s efforts.
Avoiding the Pitfalls of Overfunding
Another critical aspect discussed was the risk of overfunding, particularly in the post-2021 economic climate. Many startups, flush with capital, made the mistake of building extensive corporate infrastructures around products that hadn’t yet found their market. This not only increased burn rates but also distanced the founding team from their customers—a perilous move that can stifle growth.
Building a Sustainable Sales Culture
Daniel also delved into the intricacies of structuring compensation for early sales hires. He highlighted the importance of aligning incentives with the company’s long-term goals, rather than just short-term revenue targets. This approach ensures that salespeople are not just chasing logos but are also fostering meaningful customer relationships that will drive sustainable growth.
“Incentivise the behaviours you want to see,” Daniel advised, noting that salespeople, particularly in the U.S., are often “coin-operated.” By carefully structuring compensation packages, startups can motivate their sales teams to focus on high-quality, long-term customer engagements rather than quick wins.
Final Thoughts
For founders and CEOs, the journey to building a unicorn is not just about having a great product—it’s about making strategic decisions at every turn. From timing your first sales hire to staying deeply involved in the sales process, every choice can have a lasting impact on your company’s trajectory. As Daniel Frankenstein wisely pointed out, “Fail early, fail cheap, and learn quickly,” a mantra that can help startups navigate the unpredictable waters of growth and scale.
As you reflect on these insights, consider how they apply to your own startup journey. Are you ready to take the next step? If so, remember that the right timing, the right team, and the right strategy are your keys to unlocking unicorn status.