HubSpot’s CRO on the Right Way to Scale Your Team Before You Reach Product Market Fit
Editor’s Note: This is the second part of a two part interview featuring Mark Roberge. You can read the rest of this interview here.
Over the six years Mark Roberge served as HubSpot’s SVP of Worldwide Sales and Services (2007 – 2013), he grew the revenue run rate from $0 to $100 million and expanded the team from 1 to 450 employees. Today, HubSpot helps more than 16,000 companies in 90 countries attract, engage and delight their customers with personalized experiences.
In 2006, when co-founders Dharmesh Shah and Brian Halligan invited Roberge to join HubSpot as a member of the founding executive team, Roberge was a first-time VP of Sales and the team was still learning how to harness their diverse personalities to build a company that would last. Fairly early on, at a point when the team was bringing on approximately 30 to 40 new customers each month, the executive team came to their first major crossroads. Would they continue forward with the typical startup mindset and focus on doubling or tripling down on top-line revenue growth, or would they take a step back and focus instead on unit economics – “oil the machine,” as Roberge puts it, to ensure a strong foundation built on sound numbers.
At that time, the team followed Halligan’s lead and began hiring one new salesperson each month to support the company’s more aggressive sales goals. Though everything clearly worked out well for HubSpot, Roberge still wonders if that was the right decision. “I’ve been using a similar situation as my opening case for a class I’m teaching at Harvard Business School,” he says. “I like to highlight this debate for the students because the right answer is not black and white. I can tell you that if we were to do it again, I think we would have put less focus on the top-line sales and a lot more focus on the unit economics.”
Roberge got a kind of second chance at this challenge years later when HubSpot entered the software arena with its sales product, which included a totally different tech stack, brand, financial system and a new team. This time around, Roberge adopted a different strategy: starting with a small team of specialized salespeople who were perfectly suited for the product market fit phase, and then challenging those salespeople to get creative to drive revenue growth without increasing sales headcount.
The Right Kind of Salespeople
To best serve the company while they were still seeking product market fit, Roberge sought out a very particular kind of salesperson. “The type of salesperson you want at that stage is very different from the type of salesperson that you hire to scale after you’ve established the product market fit,” Roberge explains. “A lot of startups miss this. They may turn to a proven sales operation like EMC or Oracle to find a 24-year old with really good training. However, that person is likely not the ideal profile for this stage.” Roberge goes on to explain that those salespeople haven’t had the kind of experience that will enable them to accelerate critical learnings at this stage. “When these kind of salespeople joined those companies, they were handed a blueprint that told them exactly what to do. They were exceptional at following the blueprint, but may struggle when they have to create it.”
Roberge points out that at the product market fit stage, revenue and customer acquisition are just a happy byproduct of your sales team’s activity. At this stage, you need to focus on learning as much as you can about your customers and how your product fits into their lives. Based on this objective, Roberge recommends taking a more consultative approach, and that requires salespeople with a different mindset and skill set from those who have been trained to go to market armed with their pitch deck and focused only on getting a yes or a no.
“The product market fit salesperson goes to market with a theory and approaches customer conversations almost like market research,” Roberge says. “They focus less on the solution they have in their pocket and more on the perspectives and priorities of their target buyer with regards to the problem they’re trying to solve.” In addition to having an innate ability to navigate these kinds of in-depth and off-script conversations, the most successful salespeople for this stage are also able to accurately translate what they’ve learned for the rest of the team. As Roberge puts it, “That’s not your everyday salesperson.”
In addition to their research and communication skills, the salespeople who are best suited to this kind of challenge also share another attribute – they are more motivated by innovation than by compensation. When Roberge was putting together his initial team of four, he looked for people who were genuinely more interested in figuring out the vision for the product than they were in blowing out 200% of quota. Once your operation is up and running, it’s fine – even preferable – to have a team of “coin-operated” salespeople who are focused on raising the bar in terms of work ethic and performance. But, starting out, you need a different kind of sales animal on your team.
Scaling Through Optimization Instead of Headcount
Once you are ready to scale the output of your sales team, it’s important to remember that there’s more than one way to achieve that goal. Once Roberge’s initial team of consultative salespeople had nailed down the product market fit, he found himself facing some pretty aggressive revenue targets and also the assumption that, in order to meet those targets, he would immediately hire additional salespeople.
“I told our finance team that I’d sign up to the revenue targets and take the expense they’d allocated for new hires,” Roberge recalls, “But then I said that I’d take the plan back to my team and challenge them to hit the numbers without increasing headcount.” Roberge’s team accepted the challenge.
To reach the much larger sales figures without adding staff, Roberge encouraged his team to think outside the box. “I told them that I wanted to try to invest in the demand generation side of the formula and see if they could get creative about how they used technology, process improvement and skill development,” he says. “I wanted to see if they could drive their individual productivity high enough so that we wouldn’t have to hire additional salespeople.”
To support his strategy of growing sales without also growing headcount, Roberge put together a customized incentive plan worthy of the gauntlet he’d thrown down. “I framed the challenge in such a way that there was ample financial reward for success,” he says. “Obviously, if I’m asking them to drive a productivity of x to a productivity of 1.5x or 2x, that’s got to put more money in their pocket.”
Roberge and his team rose to the challenge with a wide variety of tactics and processes. They increased conversion rates by further segmenting potential buyers into micro-personas and personalizing the experience to those personas. They launched, tested and refined a nurturing process specifically tailored for lower quality potential buyers. Each week, the team held three film reviews that helped them analyze and iterate on exploratory calls, demos and so forth. They also worked extensively with the product team in order to optimize in-app experiences designed to automatically progress buyers through their journey.
Roberge’s non-traditional approach was a bold move, but one that paid off. Roberge can’t disclose the exact details, but public announcements about sales traction during that period tell the story well enough. Today, the company boasts more than 250,000 sales product users. “It was a really beautiful experience because everyone was trying to do the same thing. The company wanted it. I wanted it. The salespeople all wanted it for slightly different reasons,” says Roberge. And in the end, everyone got what they wanted.
By hiring the right salespeople in the early stages of product market fit, and then giving them the opportunity to take their game to the next level by optimizing how they leveraged technology, process and all the skills at their disposal, Roberge created a powerful sales machine that delivered stellar results without having to immediately increase headcount. Just goes to show that there’s more than one way to scale a successful sales organization.