Interview: Startup Sales Veteran, Scott Hughes

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Interviewee: Scott Hughes, Vice President of Sales and Business Development at PunchTab.

I met Scott when he first took over leading all sales at PunchTab and since then under his leadership they have hit a growth rate of 700% and have closed deals with brands like: Quicken Loans, Arby’s, Duck Tape, Così, The Yankee Candle Company, Bareburger, BCD Travel, RingCentral, MakeUseOf, just to name a few.

Scott’s team has nothing but great things to say about his leadership and I was excited to interview him for Sales4StartUps! He is an awesome sales leader and has an innovative sales mind.

Check out the interview:

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Jorge: How long have you been doing startups and can you tell us a bit of your journey?

Scott: I’ve been at various stage B2B software/SaaS startups from Angel Funded to Series D for most of my twenty-year career. A couple of them though didn’t remain startups. I was fortunate enough to experience an IPO with Interwoven (my first startup) back during the dotcom boom and then continued with them for several years as a public company. I started as the second Account Exec and was the first Regional Sales Director after a promotion. It was a great experience for me.

It’s where I kind of got addicted to the high growth, dynamic environment of small software companies going after new markets and trying to beat the odds. I was also part of an acquisition with Lombardi Software in 2010. We were bought by IBM, so I did a short stint with Big Blue post acquisition. From there, I quickly jumped back into the startup world and worked for Lithium (very mature startup-Series D), Badgeville (Series C), and now I’m with PunchTab (Series B) leading the sales team.

 

Jorge: What does “sales” mean to you?

Scott: It really just means accurately diagnosing a problem and being the best to communicate your unique solution and then proving it during the evaluation cycle.

Scott: What are the core differences between the selling at an early stage startup versus a big company?

At an early stage company, you need to be a true evangelist and be adaptable, creative, and tenacious. Usually the prospect hasn’t heard of you, and often you don’t really even know who your true buyer is for a while. Also, you’re usually competing for some relatively small discretionary budget.

Being able to convince large companies to shift some money from something already proven and take a risk on something unproven necessitates that your message is tailored to them and the value proposition really stands out. In addition, when you’re building a pipeline from scratch, it takes serious perseverance.

 

Jorge: There are a plethora of pre-revenue b2b/enterprise startups in U.S, especially in Silicon Valley. A) What do you recommend a these founders focus on when seeking to build out their first sales organization?

Scott: Great question. First of all, their first sales team needs to be entrepreneurial like the founders. Start with two people who see the vision, and believe it’s a business they would have started themselves. Second, the first sales people should be scrappier, “up and comers” versus the big company veterans who can no longer afford as much risk in their careers and are typically spoiled by having all the extra tools and resources at their disposal. Third, they should possess all the qualities described in question #3 above.

 

Jorge: What should a b2b/enterprise startup’s sales process and organization ideally look like at these various stages in their life:

Scott:

•After their first week

There is no process in the first week. You start calling your network and try to find some reputable contacts to validate your business.

•After their first quarter

You should have some validation after the first month and have been through an initial list of top prospects to test the product/service.

•After their first year

The basic process and forecast stages should be in place at12 months. The revenue progress after year one varies quite a bit. At a minimum, you should have your first 10 early adopter customers (if B2B enterprise) committed to deploying your product or service.

•Post acquisition/exit

This is a tough question because companies get acquired at various stages. However, by Series B, most companies need to at least have a basic sales and forecasting process in place and have a strong sense for how they will build a repeatable sales model and scale the business.

 

Jorge: I have heard you are really great at scaling sales organizations. How can salespeople and sales managers improve sales performance and customer intelligence?

Scott: Salespeople can improve performance by staying hungry and taking their craft seriously. They need to keep up with the latest tactics and tools and not get lazy by relying on what used to work. It’s similar for Sales Managers.

However, Sales Managers need to also stay focused on optimizing the sales process and making sure they have the right type of talent as the business matures. The first sales people are not necessarily the right ones once you start hitting critical mass and the deal size gets bigger and the sales process gets more complex.

 

Jorge: How have you seen selling “evolve” over the past 10 years?

Scott: It’s evolved in a few ways. First, in the B2B enterprise market, it’s shifted to at least 80% SaaS and away from on premise perpetual licenses. As a result, sellers have had to learn a new business model and realize that the buyer has more power than ever before. In SaaS, the buyer is a renter vs. an owner (they are dating vs. marrying).

They usually only sign up for a year at first, so you’re really dealing with a 12-month pilot at best with the first contract. This means that the deal size is a bit lower than you want, and post- sale customer service needs to be exceptional, or they won’t renew and extend their subscription for a longer term. It also means the sales cycles need to be shorter, and therefore, you really need to be efficient with how much you invest to earn their business.

 

Jorge: What are your 3 favorite sales tools and why?

Scott: 

1) Salesforce – No CRM is perfect, but this is still my favorite. I rely on the dashboards and reporting daily.

2) LinkedIn – This is an obvious choice these days…great for networking, prospecting, and general intelligence about the people you’re selling to.

3) Marketo – I like its lead scoring and campaign management capabilities. It helps sales teams better focus and have broader reach at the same time.

 

Jorge: Any tips, tactics, best practices that you would like to share with our readers?

Scott: Just one. And it goes back to the beginning of the sales cycle…Every encounter with a prospect should start with the question of whether they are serious or just curious. All too often there is a lot of time wasted hoping someone who is just doing a little investigating is going to buy. The best salespeople are those who know how disqualify early and focus on the right opportunities.

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