For many startups, the transition from founder-led sales to a professional sales team is a critical milestone. Sendbird, the customer communications platform that has raised over $220 million in funding, navigated this transition successfully. CEO and co-founder John Kim recently shared insights on their journey from founder-led sales to building a robust sales organization.
The Tipping Point: $5M ARR
Kim reveals that Sendbird relied on founder-led sales for a significant period, stating, “We’re still founder led sales until we’re past 5 million in revenue.” This approach allowed the company to deeply understand its product and market before investing in a formal sales structure.
However, Kim admits that in hindsight, they may have waited too long to make the transition. “I think we hired a little bit too late,” he reflects, highlighting the delicate balance between maintaining control and scaling growth.
The Chicken-and-Egg Dilemma: Sales or Marketing First?
One of the key decisions startups face when scaling is whether to hire a sales leader or a marketing leader first. Kim addresses this dilemma, noting, “There’s always a question around do you hire marketing leader first or sales leader first? Some sales leader do nothing, join a company when there isn’t a marketing leader.”
In Sendbird’s case, the decision was influenced by their strong inbound lead flow. Kim explains, “But thankfully at that point, we have so much of inbound flowing in. Like sales leaders, like look at the, like, heard the numbers. I’m like, okay, if this is working, I can start closing deals.”
This abundance of inbound leads made the sales leadership role more attractive and viable, even without a formal marketing structure in place.
The Hiring Timeline
Sendbird’s approach to building their executive team was methodical. Kim details the sequence: “So went through a couple of iterations. I think initially probably was after our vp of sales arrived, probably shortly after, I’m guessing three, six months after.”
He further clarifies the revenue stage at which these hires occurred: “And this was when we’re doing, call it five, $6 million in revenue.” This provides a clear benchmark for other startups considering similar hires.
Leveraging Inbound Leads
A key factor in Sendbird’s successful transition was their strong inbound lead generation. Kim emphasizes the importance of this, stating, “So most of our growth, even still to this day, comes from inbounds. Like 90% of our leads and pipeline do come from inbound, although we have some of our larger customer debt. We went through outbound, through whether it be founder, emailing or LinkedIn.”
This strong inbound flow provided a solid foundation for the new sales team to build upon, allowing them to focus on closing deals rather than solely on lead generation.
Early Customer Focus
Kim attributes much of Sendbird’s success to their intense customer focus from the early days. He shares, “I think initially some of the things we got was we really obsessed over customers. And I think we still do. I, on a weekly basis, I talk to anywhere between two to five customers every single week.”
This customer-centric approach not only helped in product development but also in understanding the sales process and customer needs, which proved invaluable when transitioning to a professional sales team.
Evolving the Sales Approach
As Sendbird grew, their sales approach evolved to match their changing customer base. Kim explains, “Initially because were building social networks for moms and my first company was a gaming company, we’re like, oh, we should add chat for social and gaming. So that was our bread and butter. I initially we’re targeting SMB startups who are making games, who just need a chat for their community features or for their social application.”
However, over time, their focus shifted: “But over time, more and more customers in the mid market to enterprise categories start to survive over longer term period. We still have customers who were very early on, signed up very early on, are still our fantastic customer now in one of our larger customers.”
This evolution in their customer base necessitated a more sophisticated sales approach, further driving the need for a professional sales team.
Lessons for Startups
Sendbird’s experience offers valuable lessons for other startups approaching the transition from founder-led sales:
- Timing is crucial: While Sendbird waited until $5M ARR, Kim suggests earlier might be better.
- Leverage inbound leads: A strong inbound pipeline can ease the transition to a professional sales team.
- Maintain customer focus: Regular interaction with customers provides invaluable insights for sales strategies.
- Be prepared to evolve: Your target market and sales approach may change as your company grows.
- Consider the marketing-sales balance: Decide whether to prioritize sales or marketing hires based on your current lead generation capabilities.
As Kim summarizes, the transition from founder-led sales to a professional team is “a constant evolution.” By carefully considering timing, leveraging existing strengths, and maintaining a customer-centric approach, startups can successfully navigate this critical transition in their growth journey.
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