The scaling bottleneck, Experience

So as the companies first sales leader, you’ve built the first team of sales people for a new startup, sales are good, and now you want to grow…. How do you scale up in order to hit your operating plan?

Just One Thing (JOT) to take away : Scaling is more complicated than hiring, and experience is the main bottleneck to scaling a team.

You are in the business of creating more experience.

You’ve taken your first group of sales team hires, and you’ve made them successful, you’ve made them “experienced” in your companies’ sale. By definition this first team is the most experienced team you have, so you need to go out and get more inexperienced people with the hope of eventually making them experienced too.

In theory, most people are thinking about the problem like this:

X Experiemced + Y inexperienced = ( X + Y ) Experienced

So lets start hiring!

Experience doesn’t scale that way

Unfortunately, the formula above is just the theory. In reality, its much more complicated.

Let’s look at how people move from inexperienced to experienced. First, they can learn on their own, which takes a lot of raw talent. You might get lucky and your first couple of sales people could ramp up this way, but the odds are very low that you’ll build an entire team out of this type of person. The second method is learning by spending time with people who have more experience than them. This could include spending time with a manager, a trainer, a team lead, or simply a peer coach that has more experience. This is the way the majority of a sales team will learn.

Experience, in order to pass from one person to the other takes time, another constrained resource. When these new inexperienced team members arrive, someone is going to have to take the time to slowly teach them all of the skills. The amount of time is directly correlated to how long it takes a new sale person to ramp and start producing at full capacity (ramp time). This process will more than likely be even slower because you don’t have a training team, and you haven’t had time to document all of the things that lead to success for a new hire.

Last, you can get some leverage by cracking the code on your type of sale, and putting the playbook into a good training program. This is difficult, because early on most organization don’t have enough data to really understand why their sales machine works. If you do have there resources (historical data , quality data, analysts, large teams), and you crack the formula, then you can clearly document the process to success and build it into a training program. Sales people can’t become experienced simply through theoretical training, but it helps structure their efforts, and gives them the why behind each of the actions they should be taking in the day.

Here are some of the variables in the formula:

• # of Experiemced people on team
• # of new people being added to the team
• Ramp time
• # Number of Managers
• # of Trainers
• # of experienced peers
• Level of understanding of the organizations sale
• Quality of the training program

The reality is that the scaling formula becomes a lot more complicated:

X Experienced + Y inexperienced + Manager Time(/ Span of Control) + Ramp Time + Trainer Time + Level of knowledge about the sale = More Experienced People

Solutions

There is no silver bullet!

Yes, you could pay for more experience. You could pay for people that have selling experience in general, or you could go look for people that have experience specifically in your industry. The reality is that this would take longer, because you’d have to find these people, and it would be more expensive to hire them.

So the main option is to really learn how to scale your organization while maxing out the experience bottleneck. The key here is getting the best coverage ration of experienced people to inexperienced people.

Experience Scaling Formula

X experienced + Y inexperience ( if Y < 1/3 of X over the time it takes them to ramp) = X+ Y Experienced people.

The key is not to hire so many people that it deletes the ration of experienced people to inexperienced people, thus slowing down the transfer of knowledge.