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Jason Lemkin (SaaStr)18 February 2024

Building a world-class sales org

8Frameworks
15Insights

Episode overview

Jason Lemkin explains how founders should recognize when their B2B product needs a sales-led motion, close the first customers themselves, and then hire two early representatives they would personally buy from. He details practical approaches to interviewing, compensation, quotas, sales-management scaling, and choosing leaders who remain close to customers and deals. The conversation also covers healthy product–sales tension, customer-centric trials and pricing, product involvement in major deals, and the economics and value of industry events.

Key ideas

  • Founders should personally close roughly the first ten customers and seek sales leverage once customer work consumes more than about 20% of their time.
  • Hire two initial sales representatives to create a human A/B test, prioritizing people who understand the product and from whom the founder would buy.
  • A VP of Sales should follow two quota-hitting representatives, learn the product deeply, participate in deals, and hire strong managers beneath them.
  • Use a realistic product demo in interviews, conduct reference checks, and favor candidates whose previous product was harder to sell.
  • Early sales compensation should usually be about 50% base and 50% variable, with a forgiving ramp before targeting roughly three-to-five times compensation in bookings.
  • Product leaders should join important customer conversations, while sales should receive a defined quarterly allocation of product-development capacity for prioritized requests.
  • Trials, contract terms, pricing, and free tiers should optimize for customer value and durable compounding rather than short-term revenue pressure.
  • Founders should ensure every sales conversation ends with an explicit next step and should make the current year customer-centric by shipping a few genuinely great improvements.

Transcript available · source text is retained privately and is not published

Frameworks in this episode

People & resources mentioned

Attributed to the moment in the episode. Timestamps are approximate.

People · 13

  • Jason LemkinMentionsJason created and runs SaaStr and previously co-founded and led EchoSign before its acquisition by Adobe.

    today my guest is Jason Lenin Jason created and runs saster the world's largest community for SAS and B2B Founders

  • Lenny RachitskyMentionstoday we've got another very special compilation episode something I've been pulling on more and more with the podcast and the newsletter

    thank you so much for letting me come

  • Aaron RossCoinedCredited with doing most of the work on From Impossible to Inevitable.

    I did almost none of the work although it's a lot of it's my content Aaron Ross did it

  • Marc BenioffMentionsPreviously appeared on the podcast and discussed Agentforce and the future of sales and customer-experience jobs.

    Mark benof today is still flying to meet customers

  • April DunfordMentionsApril Dunford was on this podcast and she has this book that she put out recently called the sales pitch

    I did a great episode with April Dunford where I don't know if you follow her stuff

  • Sam BlondMentionsJason Lemkin’s first SDR, later CRO at Brex and a partner at Founders Fund.

    the first SDI hired was a guy named Sam blonde who went on to be um cero at brex

  • Daniel ChaitMentionsMentioned in connection with Greenhouse and executive involvement in major customer relationships.

    I was just talking with uh Daniel cha at Greenhouse he does this they're over 200 million

  • Matt MullenwegMentionsDiscussed the power of compounding after twenty years building WordPress and Automattic.

    I just interviewed Matt Mullen Wick from WordPress 20 years he's been doing this

  • Tomasz TunguzCoinedPresented at SaaStr about free trials and trial length.

    Tomas tangas did a whole saster presentation just on free trials and free trial legs it was really good

  • Chris PrattMentionsActor associated with The Terminal List.

    I'm not into the Chris Pratt I'm not into that that goofy s goofy superhero movies he does

  • Tom CruiseMentionsPraised for delaying Top Gun: Maverick’s release until it could receive a theatrical launch.

    and Tom Cruz said no he's like this is G this is such a good product we're going to wait years

  • Jeff LawsonMentionswhen our uh Jeff Lawson or Cersei at the time heard about he started attending too

    you just might bump into Jeff Lawson or Eric Juan or whoever the next one they might be there

  • Eric YuanMentionsCited as an executive attendees might encounter at a leading industry event.

    you just might bump into Jeff Lawson or Eric Juan or whoever the next one they might be there

Resources · 33

  • SaaStrCoinedcompany · Jason Lemkin

    Jason created and runs saster the world's largest community for SAS and B2B Founders

  • AdobeMentionscompany

    and then sold to Adobe where he ended up as a vice president of their web services business

  • EchoSignCoinedsoftware · Jason Lemkin

    before saster Jason was the CEO and co-founder of echosign which he grew to over 100 million ARR

  • CommandBarMentionssoftware · CommandBar

    command bar is an AI power toolkit for product growth marketing and customer teams

  • VantaMentionssoftware · Christina Cacioppo

    this episode is brought to you by vanta helping you streamline your security compliance to accelerate your growth

  • CanvaMentionscompany · Melanie Perkins, Cliff Obrecht, and Cameron Adams

    canva didn't really build a sales team until they were well north of 500 million in Revenue

  • SlackMentionssoftware · Slack Technologies

    slack started all self-served and by the time they went public the majority of their revenue was Enterprise sales

  • SnowflakeMentionscompany · Snowflake Inc.

    there's folks like and snowflake has a well maybe is a much better example has a a free low-end version

  • NotionMentionssoftware · Notion Labs

    I think notion I think at 10 million ARS when they hired their first salesperson

  • HubSpotMentionscompany · HubSpot

    if I want to buy CRM I don't get to talk to Yaman at HubSpot or Mark Benny off

  • SalesforceMentionscompany · Salesforce

    you can run circles around 98% of the sales reps at Salesforce or HubSpot

  • CloudflareMentionscompany

    they worked at tulo or Cloud flare or wherever and they talk the talk

  • GitHubMentionssoftware · GitHub

    I would interview a lot of folks at places like GitHub back in the day

  • Tesla Model 3 PerformanceMentionsproduct · Tesla

    we are selling a Tesla Model 3 Performance it has competition I might not need it this week

  • GoogleUsescompany · Google

    I've gone on Google and I've seen there's no charg Network near your house there's only supercharges

  • PipedriveMentionssoftware

    the first investment I ever made was a company called pipe Drive which sold for a billion and a half

  • BrexMentionscompany

    Sam blonde who went on to be um cero at brex

  • Founders FundMentionscompany

    and then uh now is a partner at Founders fund

  • LinkedIn AdsMentionsproduct · LinkedIn

    LinkedIn ads allows you to build the right relationships Drive results and reach your customers in a respectful environment

  • GreenhouseMentionssoftware

    I was just talking with uh Daniel cha at Greenhouse he does this they're over 200 million

  • WordPressMentionssoftware · Matt Mullenweg

    I just interviewed Matt Mullen Wick from WordPress 20 years he's been doing this

  • AutomatticMentionscompany · Matt Mullenweg

    the number one thing he didn't understand at WordPress at automatic was the power of compounding

  • From Impossible to InevitableRecommendsbook · Aaron Ross and Jason Lemkin

    we actually wrote a book called from impossible to inevitable that sold about 100,000 copies

  • SaaStr UniversityRecommendscourse · SaaStr

    we have something called saster University s. University it's free there's a pretty good course on getting learning about sales

  • PavilionRecommendscompany

    there is a another Community um called Pavilion and I do think it's great

  • The Terminal ListRecommendstv show

    oh the terminal list the terminal list the terminal list the terminal list

  • Top Gun: MaverickRecommendsfilm · Joseph Kosinski

    the one I liked I that I couldn't believe if you want the second one you'll be even though as product people Maverick

  • OpusClipUsessoftware

    I love this Opus clip app for making clips from video

  • OnePlusUsescompany

    OnePlus it's the OnePlus OnePlus yeah it's the first one that's the same form factor same weight

  • SaaStr AnnualCoinedevent · SaaStr

    we did a one day SAS annual in 2015 and 3,000 people came including the evening

  • SaaStr EuropaCoinedevent · SaaStr

    our Europa event in London in early June June 4th to 5th please come

  • LinkedInUseswebsite · LinkedIn

    just search for me Jason Lyin linkedin's pretty cool I have 260,000 followers we have really good conversations

  • Lenny's PodcastCoinedpodcast · Lenny Rachitsky

    you can find all past episodes or learn more about the show at lenp podcast.com

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Insights & moments

The myth-busts, hot takes, explainers, and tools worth keeping.

Myth Buster· 2

Myth Buster1:07:00

The 'Full-Stack AE' Doesn't Exist in Real Life

LinkedIn lore says an account executive will magically self-source their own outbound with Apollo and ZoomInfo and prospect in their spare time. Lemkin says that only happens under heavy micromanagement in certain high-performance orgs, not in real life. Reps specialize into openers and closers, and what they actually do in their free time is sell real estate or courses, not more outbound.

  • Founders now expect self-sourcing AEs because of social media discourse, but it rarely works
  • AEs mostly want to be handed a lead, work it, and close it
  • You hire SDRs to generate the demand rather than expecting AEs to do it all
  • Full-stack AEs exist only when micromanaged in specific high-performance environments

and they do exist when they're micromanaged in certain high performance sales organizations but they don't exist in in real life right they're specialized

Jason Lemkin · 1:07:30

you know what sales reps do in their free time today they sell real estate or courses

Jason Lemkin · 1:07:30
#sales#roles#myths
Myth Buster1:21:00

Weaponizing Customer Success Destroys Relationships

Lemkin argues that when the market got hard, companies flipped customer success teams' goal from happy customers (retention, NRR) to squeezing revenue from the existing base, and it destroyed relationships. His example: a beloved product his team paid $299/month suddenly demanded $50,000 upfront or they'd shut it off that week. The demand was later walked back, which he says is almost worse because it proves it was just a threat.

  • 24 months ago CS was measured on retention and happy customers; last year it became revenue extraction
  • A $299/month product demanded $50,000 upfront under threat of same-week shutoff
  • The threat being reversed exposed it as a bluff, damaging trust further
  • Lemkin is against weaponizing teams that don't need to be weaponized

asked us for $50,000 up front or said they would turn it off that day that week maybe was that week $50,000 that's what happens…

Jason Lemkin · 1:22:00

when I talk to leaders customer success got weaponized and I don't like it

Jason Lemkin · 1:22:00
#customer-success#retention#b2b

Hot Take· 5

Hot Take06:30

A B2B Sales Team Isn't a Question of If, But When

Lemkin argues nearly every B2B company eventually needs a sales team, even self-serve darlings like Canva (which waited until $500M+) and Slack (mostly enterprise by IPO). The critical move is being brutally honest about how you actually won your first 10-20 customers: if closing them took effort, questions, and deployment help, you have a sales-led DNA and running from it kills you.

  • Canva deferred a sales team until well past $500M revenue; Slack's revenue was majority enterprise by the time it went public
  • Most companies end up hybrid, not pure PLG or pure sales-led
  • Be honest about how the first 10-20 customers found and bought you
  • If those customers needed effort, security answers, and onboarding, that is a sales motion, not self-serve

the most important thing though I've found is however you get those first 10 15 20 customers be honest be honest

Jason Lemkin · 07:00

sales is is not a question of if you're going to need a sales team it's a matter of when

Jason Lemkin · 11:00
#sales#b2b#plg#go-to-market
Hot Take19:00

Never Hire a VP of Sales Before Two Reps Hit Quota

A VP of Sales' job is to scale you from rep 3 to 300 using a script that's already starting to work. Hiring one before you have two quota-hitting reps asks them to find product-market fit, be the first rep, be the second rep, and scale it all at once, which Lemkin calls mission impossible. Do it too early and both the VP and half your seed round will be gone within eight months.

  • You need two reps hitting quota before hiring a manager for them
  • A premature VP hire is a Hail Mary that 'never ever' works
  • Early reps must be product gurus; at scale they can't be or you won't scale
  • A bad early VP hire can burn $2M of a $4M round because they never learn the product

so you need two reps that are hidden quota and then you hire VP sales if you hire it before then you're you're you're doing…

Jason Lemkin · 20:30
#hiring#sales-leadership#scaling
Hot Take23:00

Most VP-of-Sales Candidates Are Burnt Out and Don't Want to Sell

After interviewing ~50 VPs of Sales in a year, Lemkin says the majority no longer want to actually sell, just manage from home. His first screening question is whether they still want to do sales, and the fix is making them carry a bag. He recounts a top candidate with the best LinkedIn who refused to visit customers past the San Francisco peninsula because he was happy at home.

  • The last three years of market whiplash left the industry littered with burnt-out veterans
  • Want a VP in deals 20-30 hours a week when they start, not just reviewing dashboards
  • The best salespeople love the craft and love money; never hire a rep who doesn't like money
  • A great-on-paper candidate disqualified himself by refusing to travel to customers

the best sales folks love sales it's a craft they love money yes they love money and that does matter do not hire a sales…

Jason Lemkin · 28:00

I'm willing to visit customers but I won't go as far as the peninsula in San Francisco he's just happy at home

Jason Lemkin · 29:00
#hiring#sales-leadership#burnout
Hot Take37:00

In B2B You're Solving Problems, Not Selling

Lemkin's core thesis is that 99% of founders and reps misunderstand the job: you're not selling a used car, you're helping someone buy a Tesla Model 3, a great product with real competition. The best reps are so expert and honest that they'll even tell a prospect not to buy yet, sending them to a competitor if they need a feature you don't have and asking them back in six months.

  • Frame the whole market honestly, including where your product falls short
  • Software done right is magical and shouldn't need Boiler Room tactics
  • The best reps say 'no, we're not the right solution for you today'
  • That confidence to walk away is what lets them close when it is a fit

we are selling a Tesla Model 3 Performance it has competition I might not need it this week

Jason Lemkin · 37:30

the best reps will also tell reps when not to buy their product as as painful as that seems in tougher times in 2024 the…

Jason Lemkin · 38:30
#sales#selling#b2b
Hot Take42:00

If a Hire Fails, It's 100% Your Fault

As an investor Lemkin tries to be the last interviewer, telling the candidate they already have the job and creating a safe space to surface doubts so they don't bail in three months, even if founders get annoyed. His deeper conviction: no candidate can do enough diligence in the time available, so when a hire fails, it's entirely the founder's fault for not seeing it during hiring.

  • There is never enough time for a candidate to fully vet a role
  • Lemkin deliberately runs a 'de-selling' final interview to prevent early attrition
  • Founders shouldn't blame reps who quit or underperform
  • This ties to his broader 'be kind' philosophy on team failures

it is your fault 100% your fault if any of your hires fail don't blame them

Jason Lemkin · 43:00
#hiring#leadership#founders

Explainer· 1

Explainer45:00

How to Comp Your First Reps: 100% Ramp, Then 3-5x Coverage

Lemkin says founders panic over on-target earnings when they should focus on cash outlay and the coverage ratio. Pay market (often a 50/50 base/bonus split), let a new rep keep 100% of what they close for the first quarter to get points on the board, and design the plan so a rep ultimately closes 3-5x their take-home. Negotiating an OTE from $150k down to $130k is pointless; you want them getting rich by closing far more than they cost.

  • Base/bonus is usually a 50/50 split, so a $140k OTE is only ~$70k base
  • First quarter, let reps keep ~100% of what they close so they can eat and build confidence
  • Target coverage: 3x for SMB, 4x mid-market, 5x enterprise
  • You're really committing ~$20k of cash upfront to test whether a rep works
  • Don't over-tweak the model or you'll burn all your cash plugging a leaky boat

your first three months you you keep 100% of what you close

Jason Lemkin · 46:00

a sales rep's got to bring in four to five times what they take home

Jason Lemkin · 47:30
#compensation#sales#quota#hiring

Story· 2

Story08:00

The Company That Fired Its Sales Team and Fell From $5M to $1M

Lemkin describes a company he invested in that was doing $5M in revenue growing over 100% on a sales-led motion. When conditions got harder, the founders fired the entire sales team because they found sales icky and were tired of it. Twenty months later, with beloved customers and jaw-dropping logos, they were down to under $1M.

  • The company was at $5M growing >100% before firing sales
  • Founders killed the team because they disliked sales, not because it wasn't working
  • Revenue collapsed to under $1M roughly 20 months later
  • Lemkin says he can tell several stories exactly like this one

over 5 million 20 months ago to 1 million today because they fired the sales team because the founders didn't like sales they thought it…

Jason Lemkin · 08:00
#sales#founders#cautionary-tale
Story54:30

Hire the Rep Whose Last Product Was Harder to Sell

Lemkin's single strongest hiring heuristic: hire someone whose previous product was harder to sell than yours. If their last product was easier, they'll lack the skills; if it was even a smidge harder, joining you feels like gravity releasing from their feet. His example is Sam Blonde, his first SDR, who came from Intacct (selling cloud financials when nobody trusted the cloud with their books) and instantly became number one, later becoming CRO at Brex.

  • A harder-to-sell background transfers into an easier one; the reverse fails
  • Sam Blonde had struggled selling cloud financials at Intacct, then crushed it and rose from SDR to head of sales
  • His own words: 'this is much easier than Intacct'
  • Warning signs a product was harder: more technical, more competitive space, more complex business process

you gotta hire someone whose last product was harder to sell this is so important

Jason Lemkin · 55:00

Sam why are you why are you crushing it when everyone else here is struggling he's like this is much easier than intact

Jason Lemkin · 56:30
#hiring#sales#heuristics

Takeaway· 5

Takeaway11:30

Founders Are 'A+ Middlers' at Sales

Even founders who can't do outbound, write a cold email, or ask for a check are excellent at the middle of the sale, explaining the product and the customer's problem. Prospects love talking to the CEO. Lemkin's advice: lean into that natural strength, then just learn the one motion of asking for a next step.

  • You don't need to be good at opening or closing to close early deals yourself
  • Prospects find talking directly to the founder magical, unlike calling HubSpot or Salesforce
  • A startup founder can run circles around 98% of the reps at a big competitor on product questions
  • The gap to close is learning to ask 'what would it take to get going?'

almost all founders are A+ middlers A+ middlers a plus middlers right

Jason Lemkin · 11:30

no matter how bad you think you are as a Founder you're pretty good at the middle part of sales

Jason Lemkin · 12:00
#sales#founders#selling
Takeaway15:00

Your First Two Reps Must Be People You'd Buy Your Own Product From

The single cheat code for first sales hires: they have to be someone you would personally buy your own product from, regardless of resume. Ignore the logos on their LinkedIn. Lemkin says you'll interview 30 reps, 20 will break your brain, and you're hunting for the quirky 'pirate and romantic' who has irrationally fallen in love with your feature-poor product. His own first rep was living in his brother's garage and went on to close the company's first five, six, and seven-figure deals.

  • Expect to interview around 30 reps; most do no prep and don't visit your website
  • The trap is hiring for logos (Twilio, Cloudflare) and acronyms that don't matter
  • Leads are too precious to hand to someone who can't close them
  • His first rep, let go from a prior startup and living in a garage, closed the firm's first 5/6/7-figure deals over a decade

those first couple reps have to be people you would buy your own product from that's it

Jason Lemkin · 15:00

we're looking for pirates and Romantics in the early days

Jason Lemkin · 17:00
#hiring#sales#recruiting
Takeaway30:00

The Columbo Interview Question: 'What Will You Do Your First 14 Days?'

Lemkin's favorite 'Columbo-style' interview question for both VP of Sales and VP of Product is simply what they'd do in their first two weeks. If the answer isn't 'go meet customers,' he's out. He says the majority of product VPs he interviews don't say meet customers, while every great product leader he's worked with wants to disappear and talk to 20 customers.

  • Applies equally to VP of Sales and VP of Product
  • The disqualifying answers are 'work on process,' 'stand up Salesforce,' 'territory planning'
  • The best product leaders say 'leave me alone, I'm going to talk to 20 customers'
  • Wanting to visit or join customer calls in the first two weeks is the signal you want

if I don't hear from the VP sales or the VP product that I'm going to go meet customers out I'm out

Jason Lemkin · 30:30
#hiring#interviewing#product#sales
Takeaway35:30

The 'Sell Me This App' Test for Hiring Reps

Lemkin's interview version of 'sell me this pen' is 'sell me this app.' Give the candidate time (even hours) to prepare a real demo. He's shocked how many reps, from SDR to VP, reach a fifth or eighth interview without having watched a single explainer video or webinar. The rep who does the work, watches the video, and can sell it back to you, mistakes and all, is the one to trust with precious leads.

  • Make candidates actually pitch your product; give them time and don't make it a trap
  • A rep doesn't need to know how webhooks or API keys work, but must know the product as well as your public webinar
  • 98 of 100 candidates won't bother watching the explainer content before interviewing
  • Doing the prep proves confidence in the core problem being solved

it's got to be sell me this pen but it's not sell me this pen it's sell me this app

Jason Lemkin · 35:30

if you're a sales rep you don't actually have to know how the web hooks work or how to provision an API key but you…

Jason Lemkin · 36:30
#hiring#interviewing#sales
Takeaway1:27:00

The #1 Way Founders Can Get Better at Sales: Always Get a Next Step

Asked for the single most tactical thing a founder can do to sell better, Lemkin says learn to never leave a meeting without a next step. It doesn't have to be a check; it can be a demo for another stakeholder. In 2024 it's a four-stakeholder sale, so if you don't know what to ask, ask 'who else can I demo for?' Founders too often just end the Zoom and wait in their inbox for a next step that rarely comes on its own.

  • The next step doesn't need to be a close; it can be another demo or stakeholder
  • 2021 was a one-stakeholder sale; 2024 is a four-stakeholder sale
  • Log the next step in your CRM every time
  • March deals step by step into the 'Red Zone' before ever asking for money

the best sales people never leave a meeting without a Next Step The Next Step does not have to be a check

Jason Lemkin · 1:27:30

that's the number one tip is make sure yourself and log it in your CRM that you always have a next step

Jason Lemkin · 1:29:00
#sales#founders#tactics