Tricky topic, and there are clearly pros and cons to this hiring practice. We have seen some of our expansion stage portfolio companies recruit from their competitors’ sales teams. Sometimes it has worked… other times it has been disastrous.
In the instance of hiring from a competitor working well, one of our portfolio companies hired a relatively junior sales professional who required very little training, already understood the benefits of the platform because the competitor had a very similar offering (our portfolio company’s product was superior though, so it was even easier to sell) and most importantly, he was a great cultural fit. This rep’s role was Lead Qualification, and when he was hired by our portfolio company he started from scratch calling into industry-specific lists that we provided him. He did not bring a lead list from his previous employer… That would be unethical, and as venture capital advisors, we are adamant about our portfolio companies adhering to the highest of ethical standards in all aspects of their business. In fact, my colleague, Igor Altman, a Senior Associate at our Boston Venture Capital Firm, recently wrote a blog post about our ethics when it comes to business endeavors.
In the instance of hiring from a competitor not working well, another portfolio’s senior sales candidate was essentially hired for his “Rolodex.” If you are hiring a person for their business connections – watch out. At the end of the day, the Rolodex can only go so far, and if the person is not willing to step out of their comfort zone to make some proactive cold calls to new prospects, or meet new people to add to their network at conferences, industry events, etc – as the employer, you are in trouble. This is exactly what happened in the case of this “well-networked” rep. When the personal connections went dry, so did this person’s effort/enthusiasm.
For more insight on hiring from competitors and the pros and cons, check out Lee Salz’s post in his blog, Sales Architects. Also, Newsweek wrote a great article about creative ways to poach top talent.
Has your organization hired from competitors’ sales teams? I’d love to hear about how it turned out. Leave a comment!