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Jason Lemkin (SaaStr)18 February 2024

Building a world-class sales org

8Frameworks
15Insights

Frameworks in this episode

Sales5 steps

The A+ Middler and the Next Step

Founders are already elite at the middle of a sale — the only skill to add is never leaving a meeting without a next step.

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Finance5 steps

The Early-Stage Sales Comp Ramp

Pay 50/50, give away 100% of quarter-one bookings, then hold reps to closing 3-5x their take-home.

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Sales4 steps

The Harder-to-Sell Heuristic

Only hire reps whose last product was harder to sell than yours — never easier.

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Strategy5 steps

The Sales Roadmap Budget

Give sales a fixed quarterly slice of the roadmap — say 10% of story points — and make them force-rank it.

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Sales5 steps

The Sell-Me-This-App Interview

Make every sales candidate demo your actual product before you hire them — no exceptions.

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Strategy5 steps

The VP of Free

Somebody must be the champion of the users who never pay — and it can only be product and the founders.

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Sales5 steps

The "Would I Buy From Them?" First-Rep Test

Hire your first two sales reps on one gut criterion: would you buy your own product from them?

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Leadership5 steps

Two-Reps-Then-VP (The 3-to-300 Rule)

Never hire a VP of Sales until two reps are hitting quota — and never hire one who won't carry a bag.

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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