Sales comp and quota structure for first hires

Jen Abel is GM of Enterprise at State Affairs and co-founded Jellyfish, a consultancy that helps founders learn zero-to-one enterprise sales. She’s one of the smartest people I’ve ever met on learning enterprise sales, and in this follow-up to our first chat two years ago (covering the zero to $1 million ARR founder-led sales phase), we focus on the skills founders need to learn to go from $1M to $10M ARR.

We discuss:

1. Why the “mid-market” doesn’t exist

2. Why tier-one logos like Stripe and Tesla counterintuitively make the best early customers

3. The dangers of pricing your product at $10K-$20K

4. Why you need to vision-cast instead of problem-solve to win enterprise deals

5. Why services are the fastest way to get your foot in the door with enterprises

6. How to find and work with design partners

7. When to hire your first salesperson and what profile to look for

—

Brought to you by:

WorkOS—Modern identity platform for B2B SaaS, free up to 1 million MAUs

Lovable—Build apps by simply chatting with AI

Coda—The all-in-one collaborative workspace

—

Where to find Jen Abel:

• X: https://x.com/jjen_abel

• LinkedIn: https://www.linkedin.com/in/earlystagesales

• Website: https://www.jjellyfish.com

—

Where to find Lenny:

• Newsletter: https://www.lennysnewsletter.com

• X: https://twitter.com/lennysan

• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/

—

In this episode, we cover:

(00:00) Welcome back, Jen!

(04:38) The myth of the mid-market

(08:08) Targeting tier-one logos

(10:50) Vision-casting vs. problem-selling

(15:35) The importance of high ACVs

(20:45)  Don’t play the small business game with an enterprise company

(25:09) Design partners: the double-edged sword

(28:11) Finding the right company

(36:55) Enterprise sales: the art of the deal

(43:21) The problem with channel partnerships

(44:41) Quick summary

(50:24) Hiring the right enterprise salespeople

(56:49) Structuring sales compensation

(01:01:01) Building relationships in enterprise sales

(01:02:07) The art of cold outreach

(01:07:31) Outbound tooling and AI

(01:14:08) Lightning round and final thoughts

—

Referenced:

• The ultimate guide to founder-led sales | Jen Abel (co-founder of JJELLYFISH): https://www.lennysnewsletter.com/p/master-founder-led-sales-jen-abel

• Mario meme: https://www.linkedin.com/pulse/missing-meme-led-me-woman-johann-van-tonder-im6df

• Kathy Sierra: https://en.wikipedia.org/wiki/Kathy_Sierra

• Cursor: https://cursor.com

• The rise of Cursor: The $300M ARR AI tool that engineers can’t stop using | Michael Truell (co-founder and CEO): https://www.lennysnewsletter.com/p/the-rise-of-cursor-michael-truell

• Justin Lawson on X: https://x.com/jjustin_lawson

• Stripe: https://stripe.com

• Building product at Stripe: craft, metrics, and customer obsession | Jeff Weinstein (Product lead): https://www.lennysnewsletter.com/p/building-product-at-stripe-jeff-weinstein

• He saved OpenAI, invented the “Like” button, and built Google Maps: Bret Taylor on the future of careers, coding, agents, and more: https://www.lennysnewsletter.com/p/he-saved-openai-bret-taylor

• OpenAI’s CPO on how AI changes must-have skills, moats, coding, startup playbooks, more | Kevin Weil (CPO at OpenAI, ex-Instagram, Twitter): https://www.lennysnewsletter.com/p/kevin-weil-open-ai

• Anthropic’s CPO on what comes next | Mike Krieger (co-founder of Instagram): https://www.lennysnewsletter.com/p/anthropics-cpo-heres-what-comes-next

• Linear: https://linear.app

• Linear’s secret to building beloved B2B products | Nan Yu (Head of Product): https://www.lennysnewsletter.com/p/linears-secret-to-building-beloved-b2b-products-nan-yu

• Gemini: https://gemini.google.com

• Microsoft Copilot: https://copilot.microsoft.com

• How Palantir built the ultimate founder factory | Nabeel S. Qureshi (founder, writer, ex-Palantir): https://www.lennysnewsletter.com/p/inside-palantir-nabeel-qureshi

• McKinsey & Company: https://www.mckinsey.com

• Deloitte: https://www.deloitte.com

• Accenture: https://www.accenture.com

• Building a world-class sales org | Jason Lemkin (SaaStr): https://www.lennysnewsletter.com/p/building-a-world-class-sales-org

• Peter Dedene on X: https://x.com/peterdedene

• Hang Huang on X: https://x.com/HH_HangHuang

• Hugo Alves on X: https://x.com/Ugo_alves

• A step-by-step guide to crafting a sales pitch that wins | April Dunford (author of Obviously Awesome and Sales Pitch): https://www.lennysnewsletter.com/p/a-step-by-step-guide-to-crafting

• Clay: https://www.clay.com

• Apollo: https://www.apollo.io

• Jason Lemkin on X: https://x.com/jasonlk

• Gavin Baker on X: https://x.com/GavinSBaker

• Jason Cohen on X: https://x.com/asmartbear

• Baywatch on Prime Video: https://www.primevideo.com/detail/Baywatch/0NU9YS8WWRNQO1NZD5DOQ3I8W6

• Playground: https://www.tryplayground.com

• ClassDojo: https://www.classdojo.com

• Jason Lemkin’s post about Replit: https://x.com/jasonlk/status/1946069562723897802

—

Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com.

—

Lenny may be an investor in the companies discussed.