James Allgrove joined Stripe in early 2014, having previously worked in consulting at Bain & Co. He set up and scaled its European and East Coast presences over the course of over six years before leaving and becoming Chief Revenue Officer for a Fidel API, a Series A Startup that he helped navigate and scale through Series B. Now an advisor to early-stage startups, James helps PLG companies define and execute GTM strategies to scale their businesses. Here, he explains why a sales-led motion is a key ingredient to achieving scale.
If a PLG company claims to have an entirely self-service product without any sales support, they’re either:
a) in an early-stage motion and therefore only serving a narrow segment of customers or
b) not being truthful about not having sales reps.
No matter how intuitive the self-serve or product experience is, every PLG company will need both a product-led and sales-led motion once it reaches a certain size in order to keep on growing.
In other words, it’s not about whether you’ll need a sales team. It’s about when, where, and what sales resources you’ll need to layer on top of your PLG engine to drive efficiency and higher conversion rates.
Here’s the three-step model we used to roll out our sales-led motion at Stripe.
First: Recognize when to add sales resources into the PLG motion
Early on, sales reps are the last thing on a PLG leader’s mind—most companies don’t think about incorporating Sales until they start gaining market traction. As your product and growth matures, the types of sales resources you need, and where you need them, will also shift. At first, this typically starts with hiring a single sales rep. Later, it might be building out an enterprise team or customer success function.
I experienced this growth journey first hand at Stripe, joining the company in 2014 as its first commercial person on the ground in Europe. Initially, we focused on converting our self-serve SMB sign ups into live users, rectifying friction points within the product and signup flow and layering in automated touchpoints. As we gained more momentum, we began to use additional data to prioritize leads and to understand where to best apply sales resources. Once we understood that, we could then begin to build a sales team to fit those needs.
After a few years, we saw patterns that were very interesting but didn’t expect. We had lots of developers signing up for Stripe who were part of big enterprise companies. Although they didn’t have a high intent to purchase or the capacity to do so, they would still have a sales conversation because they ended up getting prioritized.
What would often happen is 3, 6, or 9 months later the CFO would get in touch and be like:
“Hey, my development team tells me I need to set up an account with Stripe so they can integrate it. I've never heard of you guys. Can you tell me more?”
This became a strong indicator for our enterprise motion. We would nurture product adoption and provide support to enterprise end-users, while having reps who worked on getting in front of decision-makers. If your product-led motion lets companies envision what they can accomplish with your product and build a case for it, the enterprise sale becomes much easier to unlock.
Second: Figure out where Sales will drive the most value
Before hiring your first rep or building a sales team, you have to understand where Sales will drive the most value.
At Stripe, we did this by mapping out lead scores using an “intent vs. potential” matrix, which helped us see where to apply sales resources for maximum leverage. Leads in the top-right quadrant represented high intent, and we’d reach out via email or engage with other folks in the organization depending on the opportunity size.
We mapped out our matrix following a hierarchy of internal and external signals, and then assigned scores based on ICP and intent.
- Use data to identify the highest potential customers. Since there’s a lot less revenue data for smaller companies, we pulled in firmographic data such as their Crunchbase profile, amount of VC funding, number of employees, and other company details from LinkedIn. Think of what data points on your customers give a strong signal and use those. Don’t be afraid to get creative here! You can also create your own with landing pages or waitlists to gauge demand.
- Try to determine who is interacting with your product. With a technical product, the leads most likely to close were employees in technical roles, such as developers. Dig into data at the individual-role level to find companies with a concentration of your best fit users.. They’ll be much more likely to choose you and you’ll get a much higher engagement rate. Think about ways to identify your ideal target within a company and then find companies with a lot of those users.
- Incorporate additional customer attributes to focus your efforts. You can also crawl company websites, pulling information such as industry, product or offering, geographic region, and if they use a competitor product. Doing this will help you exclude folks in industries or countries you can’t support, as well as de-prioritize those who don’t have a use for your product. This allows you to focus your efforts on the customers that are most likely to buy.
- Factor in relevant product indicators. We scrutinized different indicators within the product as well. Look closely at their actual product usage to determine intent. For example, did they send API calls using their test keys? Make live API calls? Log into the dashboard? Look up how to activate their account? How long are they spending on the API documentation? You can apply scores to each of these product usage indicators in order to gauge the customer’s intent. You can also tag or roll these up into easily digestible signals for a sales team to use during conversations.
Third: Decide what sales roles best fit your GTM priorities
One of the top questions startups ask me is what sales roles they should start with. There isn’t a cut-and-dry answer—it depends on a multitude of factors such as company stage, target market, and GTM priorities. That said, there are some common questions early-stage companies ask:
Where in my sales or sign up process should I add sales resources?
There are certain points in your sign up or sales process where adding more resources can add significant leverage. Start by looking at your pipeline to see where signups or deals are falling off and think about if there are ways you can apply sales resources in order to change your conversation rate.
For example, maybe a lot of customers drop off when they get to the pricing or payment page then you may want to consider allowing an option to ‘talk to sales’ at or before that point, or create a ‘request a custom quote’. You may be missing out on converting customers who need more bespoke pricing than your standard.
Or perhaps you are converting your signups well, then there may be a high leverage opportunity in using sales resources to drive upsells with existing customers. Don’t be afraid of experimenting to see where your highest ROI will be before committing to building out a team.
What should I look for in my first sales hire?
In the earlier stages, customer traction—not sales traction—is your key priority. You also have a lot of unknowns at this point, such as the industries you’ll eventually move into. I recommend looking for a generalist who can float across all the deal stages, as well as connect with different types of customers. You don’t necessarily want someone without any sales experience, but it shouldn’t be their only interest or experience either.
This might look like someone who did consulting before joining a startup in some sort of a commercial role. In other words: they understand businesses and have some background in selling. Hiring someone generalist like this allows you to explore different points of leverage in your sales process before committing to more specialized resources later on.
One mistake I see startups make is hiring their first sales rep based on their experience selling to companies similar to their early customers. The problem here is that it locks you into a customer segment that might not get you the most traction long term. Someone who can only sell into one segment or industry will often carry expectations and rigidity that introduce limitations in capacity and flexibility which is not ideal at an early stage.
What comes first: the AE or the SDR?
Starting out, having your first few AEs run outbound is the best way for them to learn the full sales process. It also gives you a better feedback loop on what resonates best with customers. When the time comes to hire an SDR team, they can also build the playbook with the SDRs to explain what works well. This helps SDRs get up to speed fast while giving AEs more time to focus on closing deals.
Exceptions do exist, such as if you’re targeting really small companies or in a space where there’s a lot of potential customers. Here, it might make sense to hire SDRs or an agency to drive as many leads as possible. In a situation with large market potential, you’re probably better off using an agency since your value proposition is likely easy to understand. But if your proposition is highly complex or technical, and geared toward a very specific target market, an agency won’t be as effective as hiring in-house.
Do I need customer success, account management, or both?
When it comes to hiring for customer success and account management, you’ll need to consider a few things.
How much upside exists within your customer base? Where can you drive more share-of-wallet? Are there additional products to upsell? Or is it about retention?
- For share-of-wallet and upsell opportunities, focus on customer success. Again, since there are a lot of unknowns in the beginning, start with a generalist who can keep customers happy, be a good listener, and help you prioritize your opportunities.
- For retention, consider the contract length and frequency of purchase decisions and build your team around those needs. In a price-competitive industry, you’ll need an account manager to help retain customers and defend against heavy market competition.
In a lot of business, including Stripe, there’s tremendous upside on existing customers. With so much of our customer base being VC-backed technical companies that grew quickly, customer retention was a key value-add for us. We only had one product early on, so we started out with an account management motion. As we added more products, we brought on customer success roles to upsell products and help our customer accounts increase and optimize their product usage.
Hopefully this provides some angles for you to consider as you figure out how to add sales to your PLG motion. Product-led companies can drive revenue in whole new customer segments when sales resources are applied in a thoughtful and strategic way.
You need to do both, and sales is not a bad thing or something to be scared of!
You just need to be smart about WHERE you're applying sales, WHO should drive those efforts, and HOW to support customers in a way that benefits both your pipeline and the customer.
If you need more tactical or tailored advice for your business, please reach out – I’d be happy to help!
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