Hiring Your First SaaS SDR: Essential Steps for Startup Success

Whitney Sales

March 1, 2021

Hiring your first sales development representative (SDR) can feel like such a relief. Finally, your early-stage SaaS business has someone who can focus solely on bringing in new customer leads. While you as a founder are likely to continue selling, it’s nice to know you can focus your efforts on revenue growth instead of the day-to-day sales grind. However, hiring the right SDR and setting them up for success is a critical part of startup success.

To help you successfully make your first SDR hire, we spoke to our friends at People Data Labs (PDL), specifically Morgan Blehm, Manager, Sales Development and Laura Rennels, Customer Success Manager and previously the first SDR at PDL, who have built their demand generation org from the ground up and have key learnings to share. Also, having helped hundreds of startups set up their sales function, I’ve sprinkled in a few anecdotes and pieces of advice from my experience.

Hire an SDR only when you have a repeatable process

It’s tempting to hire a salesperson as the very first hire you make. It intuitively feels “right” to have someone focused on sales in a business. However, this is the wrong mentality at an early-stage SaaS startup. Instead, only hire an SDR when you have a repeatable process for generating leads outside of your team’s network.

For example: you know your ICP and where they live online. Further, you’ve proven with early founder-led sales efforts which outreach methods are most effective at engaging customers. With that, a new SDR simply has to come in, learn the process, and follow the well-worn path. If you don’t have a successful, repeatable process, we would not recommend making the investment in an SDR. The point of an SDR is not to build a process, but to execute on it.

“At a small company, things change quickly and it’s all about gaining momentum,” said Laura Rennels, a Customer Success Manager at People Data Labs. “Rather than look for someone with established selling skills, look for someone who is curious, asks questions, and is creative.”

Once you have a repeatable sales process, hire an SDR as quickly as you can. After that process is developed, it’s a waste of your time as the founder to focus on lead generation when you could be focused on interacting with your customers and ideally closing them. It’s also important to note that an SDR does not take over all the selling. You as the founder should still be running the sales calls and doing most of the ‘closing’ work (the SDR could sit in as a form of professional development, but you are the most equipped as the seller).

Ideal previous experience for an SDR

While an SDR role is junior, you should still look for previous experience. This may or may not be job-related, and should contain:

Writing: Journalism, marketing, fundraising, or any other role where a lot of communication is written.

Previous sales and prospecting experience: Ideally, this comes from selling a mid-market to enterprise product. That way you can more easily assess technical skills and communication skills. However, it can come from any kind of role.

Stakeholder engagement: Look for roles where the candidate had to engage volunteers, fundraise, or get other people to join in what they were working on.

“Look for someone who is curious, asks questions, and is creative,” said Rennels. “These skills will be instrumental in helping you build your company from the ground up.”

Critical SDR traits to hire for

The SDR role is one of the most junior roles in a startup, so you’re looking more for the right skill set and character rather than a specific kind of experience. From a key capabilities perspective, look for clear, concise writing ability and the ability to solve problems creatively. Writing is an underrated SDR skill, but it’s critical since most of the SDR’s engagement with the customer will be through writing – emails, linkedin, twitter, etc. Creative problem solving will also be helpful for getting connected with hard-to-reach, but valuable prospects.

In the interview process, here are a few of the traits it’s important for a startup to assess for:

Work ethic and self-motivation

Grit and perseverance: Ask about a time when the going got tough, and how they worked through and kept themselves motivated through the challenge.

Self-starter: With remote work on the rise, it’s likely your team will be working in a different location from you. Also, as a founder you won’t have the time to spend motivating someone to do their job. Make sure the candidate has an orientation towards independent work and is comfortable giving it a go.

To assess these two traits, try this question in an interview: Can you talk me through a project you worked on or an accomplishment you are proud of? How did you get started? What did you do? Why are you proud of this?

“Look for someone who hustles with a fast tempo,” said Rennels. “This person needs to be comfortable in a fast paced environment with a complete lack of structure. They need to be able to adapt, learn fast, and not be afraid to try new things.”

Raw talent and growth mindset

Technical skills: Check if they are familiar with basic sales technology like CRMs and Linkedin Sales Navigator.

Coachability: You will spend a lot of time giving SDRs feedback on their performance, especially in the early days. Make sure you’re hiring someone who can learn from feedback.

To assess raw talent and coachability, give the candidate a prospecting exercise before their second interview. In the interview, ask them how they felt about their work. In response, give them a piece of constructive feedback.

“I should have focused less on candidates that might have been a great cultural fit but not necessarily the best technical fit,” Morgan Blehm, the Manager, Sales Development at People Data Labs. “The candidate we did end up hiring had 2 years of previous experience in sales and came on and instantly made a positive impact with bringing in qualified meetings his first 2 weeks and bringing many new processes and workflows to the team.”

Communication and team skills

Communication skills: In the SaaS world, SDRs will spend a lot of their time explaining the benefits of your (likely complicated) technology in dead simple terms that apply to a prospect’s needs.

Here’s how you can assess these skills: After explaining the role and responsibilities, ask the candidate “Can you talk me through your previous work, internship, social experience that you think applies to this position and how you see it applying?”

Making 30 / 60 / 90 days a success

The main KPIs for this role will be how many sales qualified leads the person generates per month. On the journey to this KPI, milestone metrics will include things like calls made, emails sent, LinkedIn requests sent, and other performance trackers.

Ensuring that an SDR is set up for success to hit that KPI is about setting a foundation early.

At 30 days, the SDR needs to deeply understand the company, customer, product, and market. They should be hitting about 25% of quota. This is a critical time, said Blehm, even though they aren’t driving major revenue yet, saying “there is so much to learn about the SDR role in itself but learning about [the] company was just as important to us.”

At 60 days, they need to have a clear understanding of your ideal customer profile (ICP), product positioning, and start building their own processes for scalable demand generation based on their creativity and previous experience. At this point they should be at 50% of quota.

By 90 days, an SDR should be working independently, prospecting, and sitting on qualifying calls, and hitting near, or at over 100% of their quota.

Having an SDR join the team can be an exciting time, but it doesn’t mean the sales work is over. In fact, it really means the work is about to scale. Once you’ve defined your ICP and built a simple process for your SDR to follow, you’ll spend more of your time interacting with prospects on sales calls, learning from prospects and customers, and likely noting issues to fix or new opportunities for growth.

Whitney has helped startups grow for 15+ years and is considered an expert in entrepreneurial selling and building early-stage sales teams. She is General Partner at Forum Ventures and the creator of The Sales Method (@thesalesmethod), a systematic process to help startups identify their target markets, launch products to market and scale sales quickly and successfully. Prior to developing The Sales Method and joining Forum Ventures, Whitney helped four companies earn a place on the Inc 5000 Fastest Growing Companies list including LoopNet, Joby, Meltwater, and SpringAhead.