B2B Wins #43: Don't hire a sales exec
And other lessons from the early-stage trenches.
You've just closed your pre-seed or seed round. The money is in the bank. The weight of fundraising is off your shoulders. Now what? This is a critical moment for your startup. The decisions you make in the next few months will determine if you'll be able to raise your next round or if you'll join the vast majority of startups that never make it past their first raise.
I recently spoke with a founder who had just raised their seed round. They were excited about all the things they could now do with the money. Their first instinct? Hire a sales exec. Every fiber of my DNA screamed “NO!!!!!”
Why? Because I made that same mistake. Twice. I’ll tell you why that’s a problem in a moment.
The Don'ts
Let's start with what not to do. These are mistakes I've seen repeatedly. Some of these, I’ve made myself, repeatedly. I hope I’m learning. If nothing else, let me serve as a cautionary tale.
Don't hire a sales person
The most common mistake I see founders make is hiring a sales person too early. You think you need someone to "get out there and sell." You don't. What you need is to understand your customer and your product. No sales person, no matter how experienced, can figure this out for you. They don't know your product like you do. They don't have your passion. They don't have your vision.
The best sales person for your early-stage startup is you. You need to be in the market, talking to customers, understanding their pain points, and figuring out how your product solves their problems. This isn't just about making sales—it's about product-market fit. The insights you gain from these early customer interactions are worth more than any revenue a sales person might bring in.
Until you have too many leads that you can’t cover the landscape, a good signal of product-market fit, YOU are the lead sales person. Once you’re cooking, you can hire your first sales exec to document your process into playbooks and get on with scaling your go-to-market.
Don't forget your burn rate
The money in the bank feels infinite. It's not. I've watched founders treat their seed round like it's an endless supply of cash. They hire too fast, spend too much on nice-to-haves, and suddenly realize they have six months of runway left and no clear path to revenue.
Your burn rate is oxygen on a trip to the moon. You use it up before the trip is up, you’re toast. Every dollar you spend should be intentional. Every expense should move you closer to your next milestone. Remember, you're not building a lifestyle business; you're building a growth company. That means every dollar needs to generate a return.
I advise founders to always know what day they run out of cash. Not some vague notion of 3Q. The exact day. This keeps the notion of “burn rate” very real.
Don't chase shiny objects
Stay focused. You might feel like a sudden influx of cash allows you to begin to experiment with all sorts of product notions. Don’t. You are on the clock (See: Burn Rate). Yes, you’re going to get all sorts of advice and customer feedback. Your job is to sort out the noise from the signal and stay focused on the vision. Zigzagging all over the place—whether it’s product or GTM—just burns cash.
Your seed round isn't about trying everything. It's about focusing on one thing and doing it exceptionally well. Stay focused on your core thesis. The market opportunity you pitched to investors? That's what you should be building toward.
Don't overvalue process
You’re going to be tempted to “grow up.” Perhaps you’ll implement Salesforce, get a license to some fancy prospecting database, and build a robust GTM method. You’ll spend valuable time and money on these adult processes. But if I asked you about your customer count, you would sheepishly admit to a handful of pilots. You shouldn’t build processes for a scale you haven’t yet reached.
Early stage startups need just enough process to not be chaos. It’s similar to the sales exec advice. When you’re unable to manage a workflow because of volume or complexity, that’s a signal for process.
Your job is to learn and iterate quickly. Heavy processes slow you down. A simple spreadsheet will serve you better than an enterprise CRM at this stage. You can add complexity when you have actual complexity to manage.
Don't hide from bad news
One founder I worked with was running out cash. He had about six months worth of cash on hand, roughly $12M. Yes, $12M. I suggested he extend that to 18 months by getting rid of a ton of his staff. I call this the lifeboat strategy. Put you most valuable people, assets, and operations on the lifeboat. Get rid of everything else.
He took my advice to reduce the burn. He got rid of me.
A few months later he was out of business.
Bad news doesn't age well. Hide from reality at your own peril. Whether it's missed targets, failed product launches, or key employee departures, get it out in the open quickly. Your investors have seen it all before. They can help, but only if they know what's happening.
The Dos
Now for the positive side. Here's what you should be doing with your seed money.
Do set clear milestones
The moment your round closes, you should have a clear set of milestones that will get you to your next round. These aren't vague goals like "grow revenue." They're specific, measurable targets: "Reach $50K MRR with a 70% gross margin and less than 2% monthly churn."
Your milestones should be tied to your runway. If you have 18 months of cash, break that into three six-month segments. What do you need to achieve in each segment to be ready for your next raise?
HINT: The “Use of Funds” slide in your pitch should have these milestones written on it. Most founders put a crappy “Sales, Product, People” pie chart that is a waste of space. Tell investors what you’re going to achieve with the money.
Do keep talking to customers
The biggest mistake you can make is retreating to your office to "build." Your seed round isn't permission to stop talking to customers—it's fuel to talk to more of them. Every week, you should be having multiple customer conversations. Not sales calls. Learning calls. Some of the learning calls will be sales. But you’re still in deep listening mode.
What problems are they trying to solve?
How are they solving them now?
What would make them switch to your solution?
These conversations should inform every aspect of your business, from product development to pricing to go-to-market strategy.
Do maintain investor relationships
Your current investors just bet on you. They want you to succeed. Use them. Set up regular check-ins. Be transparent about your challenges. Ask for introductions. Let them help you avoid the mistakes that killed their other portfolio companies.
Now the harsh reality is that most of your investors have no idea how to do that stuff they promised you. Most of the money you got is “dumb”. That can be fine too. But you’re going to ask and if one of them is able to help, you will be deeply thankful for their wisdom. But don’t count on it.
Your next round starts now. Keep a list of target investors for your next round. Follow them on social media. Read their blogs. Understand their thesis. When you have good news to share, share it. Build the relationships now so you're not starting from scratch when you need to raise again. All those “Noes” that you got. Keep them on the list too. They could turn to “Yeses” for your next round. We don’t bear grudges when it comes to investors.
Do focus on Operations
Wait, didn’t I just tell you not to invest in heavy processes? Yes, I did.
Every founder wants to focus on product and sales. You should. But operations—how you deliver your product—is where you win or lose customers. I recently spoke with a founder who had amazing product-market fit but was hemorrhaging customers because of poor onboarding. Their churn rate was killing their growth.
Operations isn't sexy. No one writes Medium posts about their amazing customer support workflow. But at the seed stage, operations is your silent killer or your secret weapon. How quickly can you onboard a customer? How effectively can you support them? How consistently can you deliver value? These operational muscles need to be built early, when the stakes are lower and you have time to learn.
Measure your operational metrics as carefully as your sales metrics. The best product in the world won't save you if you can't deliver it consistently. Your seed round gives you the runway to get this right.
Do build a data-driven culture
In the early days, you can keep everything in your head. You know every customer, every feature request, every bug. But as you grow, this becomes impossible. The earlier you start making decisions based on data, the better positioned you'll be for scale.
This doesn't mean building complex analytics systems. Start simple: track your key metrics weekly, document customer feedback systematically, measure the impact of product changes. The goal is to build habits that will serve you as you grow.
Being data-driven will also help you with your next round. Nothing is more impressive to investors than founders who have a deep, data-driven understanding of their business.
The decisions you make in the months following your seed round will echo through the life of your company. Stay focused on what matters: understanding your customers, building a product they love, and creating a sustainable business model. Everything else is a distraction.