• Mike Poledna

Why Enterprise Sales Reps Rarely Succeed in SaaS Start-ups

Updated: Jan 13


It's a common misconception among start-up CEOs that any sales rep can sell to big enterprises as effectively as small businesses. These CEOs may make the mistake of believing that hiring an enterprise sales representative from companies such as Oracle, IBM, SAP, EMC, and VMware as their first account executive is a wonderful idea. Many have fallen into this trap, and it has cost them dearly. In truth, enterprise salespeople have difficulty succeeding because the SaaS start-up selling environment is dissimilar from major technology companies. This blog post will cover a few of the reasons enterprise sales reps often fail when attempting to transition from big tech firms to SaaS start-ups.

Five Reasons Enterprise Sales Representatives Fail in SaaS Start-ups

Reason #1 - Enterprise sales reps are used to a particular lifestyle and standard of living that is difficult to maintain on a start-up's salary and benefits packages. In other words, they cannot afford to work for a SaaS start-up. They may initially accept a position thinking their background and sales skills will allow them to outperform the CEOs' expectations, but often they find out very quickly that it is not the case.

Reason #2 - The work culture at a start-up is often very different from what an enterprise sales rep is used to. The start-up CEO is usually very hands-on and daily works with the sales team. Also, there is little bureaucracy at a start-up, so decisions about products, solutions, and sales strategies are made quickly and can often change multiple times in a short period. Sales reps from big enterprises can find it challenging to adapt to this work environment and setting.

Reason #3 - Start-ups typically don't have the same resources as an enterprise company, making it difficult to support an enterprise sales team. The big tech companies have well-established marketing and product teams that can help the enterprise sales reps in their efforts to land new deals. Start-ups, on the other hand, typically have a few people who are wearing many hats and cannot provide the type of support enterprise reps are accustomed to.

Reason #4 - The responsibilities of an enterprise sales rep are usually much different than those of a typical start-up employee. Enterprise sales reps are used to having more time to be strategic and calculated in the approach to winning complex deals. They operate more as a quarterback coordinating resources and working across multiple internal teams to support sales opportunities. Account executives at SaaS start-ups, on the other hand, are responsible for generating their leads and closing them. They are effectively the marketing and sales departments. This requires a much different approach and can be overwhelming for an enterprise sales rep. The skills needed to succeed in a start-up are not the same as those at a big tech company. While both require strong communication, negotiation, emphasis on relationships, ability to prioritize tasks, etc., there are still some differences.

Reason #5 - The work/life balance is usually out of whack at a start-up, which can be challenging for someone with a family or other commitments or used to consistent and regular office hours. This is often the case because start-ups are growing rapidly and are always in a state of chaos trying to put out fires and keep up. The hours are long, and there is never a dull moment. Enterprise sales reps usually cannot handle this environment and eventually leave.

In Summary

As you can see, hiring an enterprise sales representative from one of these big tech companies is not always the best decision for a SaaS start-up. It can often lead to disaster. Start-ups need salespeople to be naturally flexible, adaptable and wear many hats. They also need individuals who understand the company's culture and are willing to work hard to help the business grow. If you are a start-up CEO, it is essential to remember these reasons before hiring an enterprise sales representative and avoid making the same mistake many others have in the past. Doing so can increase your chances of success and help your business avoid wasting time and money, and grow at a much faster rate.

Building a successful SaaS company is hard. The odds of failing are high, and it creates a lot of pressure on CEOs who know they need to grow sales quickly. But how? To address this question, I've written Sales Growth Simplified, a step-by-step guide for building and implementing a SaaS sales growth strategy in days, not months. You can check it out here.

20 views0 comments