How to pay salespeople at an early-stage tech company

#News(Startup) [ via IoTGroup ]

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In the end, I came up with a set of questions that any tech startup CEO or early-stage sales leader can ask to figure out how to pay their first sales hires.
While I can’t cover the full breadth of topics on defining a structure, I can cover two of the biggest issues: how to determine base versus variable compensation, and what actions should trigger commission.
There is a difference, however, between a salesperson thinking “I didn’t make quota, I shouldn’t get those sick new Beats EarPods” and “I didn’t make quota, I can’t make rent.” As such, the first question I tackled was degree of variability in our compensation structure.
In the process, I developed a set of questions that will assist when determining the right base versus variable compensation model.
Do you know your customer segment, and do you have a repeatable sales model?
This question evaluates whether your company is ready for a commission structure at all.
In order for a salesperson to control their fate, they need to know the segment you are targeting and a baseline sales motion.
This question is particularly important for early-stage companies because commission sometimes stands in opposition to the concept of “all hands on deck.” Often, the best initial sales hires are the “Navy SEALS” of industry: ready for a cold call, a networking event, or a pricing negotiation.
To compensate primarily on closing sales or scheduling new demos may dis-incentivize behaviors you must have early on in a tech startup’s lifecycle.
The trigger — or what action a salesperson is compensated on — ended up being the most important question I had to answer.
At first glance, it appears to be an easy answer: Trigger commission when there’s a sale.
The company’s primary means of generating revenue was post-sale, what is traditionally referred to as a “land and expand” model, where maintaining a relationship with the customer creates opportunities for upselling product add-ons

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