How to Build Your First SDR Team, With Sam Blond, ex-CRO of Brex
"Don't hire SDRs before before you first have a successful outbound process with AEs"
About Sam Blond: Sam was one of the very first hires and CRO at Brex, where he helped build the outbound sales organization that drove 80% of Brex's revenue. Before Brex, Sam worked at other successful B2B companies including Zenefits and EchoSign (which became Adobe Sign). Sam shares his experience transitioning from an SDR role himself to leading sales teams and developing effective SDR functions.
Top 5 Learnings:
Start with AEs doing outbound before investing in SDRs
Hire experienced SDRs initially, preferably through your network
Evolve incentives from opportunity creation to revenue generation as the team matures
Scale the team only when data shows the existing team is effective
Adapt outbound strategies beyond "spray and pray" email sequences to leverage networks, provide value, and coordinate with marketing
How to Build an SDR Function
Sam Blond shared his experience building the SDR function at Brex, providing context and sequential steps for developing an effective sales development program.
The Brex Approach
At Brex, they had six account executives (AEs) before hiring any SDRs, establishing a baseline for successful outbound with existing salespeople before investing in a dedicated SDR function. Their first SDR hire was a senior leader, Ashley Kelly, who was brought in as a Senior Director to improve upon the existing outbound process.
After bringing in Ashley, she made three experienced in-network hires from her previous company, Lever. They scaled the team when data supported it, and over time shifted incentives from qualified opportunities to revenue generated when opportunities closed.
The results were impressive: 80% of Brex's revenue came from outbound efforts (both AE and SDR-driven). While initially AEs generated more revenue than SDRs, this balance shifted over time until SDRs were generating more revenue per rep than AEs.
When to Hire Your First SDR
A common mistake is hiring SDRs before the business is ready. Some founders hire an SDR as their first go-to-market hire, or AEs push to hire SDRs to supplement demand generation. However, Sam advises solving for two things before hiring your first SDR:
Have an existing outbound process that is working and that SDRs can improve upon. Don't hire junior SDRs to create systems and processes from scratch.
Have someone who can actively manage them - either a sales leader or a dedicated SDR leader. Until these conditions exist, just hire full-cycle AEs.
A critical caveat: AEs should do their own outbound both on day one and in year ten. This provides insights into what works and creates benchmarks for the SDR organization.
Who to Hire
At Brex, they hired a leader (Ashley Kelly) before any individual contributor SDRs. This approach works when you know the person you want to hire and plan to grow the team rapidly. If hiring a leader, ensure they're willing to do individual contributor work initially.
For your first SDR hires, look for some experience rather than hiring directly out of school. Even a few months of SDR experience or related sales background can make a significant difference in success rates.
Start with in-network hires. Leverage the networks of your existing team, including AEs who might remember top SDRs from previous companies. This is especially important for SDR roles where track records are limited compared to more experienced sales positions.
More on how Sam and Ashley worked together here:
How to Measure Performance
The two most common metrics for measuring SDR performance are opportunities created and revenue generated. These metrics relate to quantity versus quality - the further up the funnel, the more you're solving for quantity; the further down, the more you're emphasizing quality.
Initially, incentivize quantity (opportunities created) when the business constraint is having enough opportunities in the funnel. Over time, as you learn more about conversion rates by industry, persona, and revenue contribution, consider shifting to revenue-based incentives.
Signs that you should shift incentives include: hearing that "demo quality from SDRs is low" or seeing SDRs campaigning AEs to give them credit for borderline opportunities that won't close. At this point, consider shifting to incentivizing closed revenue.
Scaling the Team
Before scaling, know your numbers. Understand the attribution of closed revenue from the SDR channel, both in terms of new logos and revenue amount. Recognize that as you add to the team, per-rep efficiency will likely decrease. Therefore, only scale when you're encouraged by the existing team's performance metrics.
At Brex, they faced a situation where AEs were sourcing more revenue per rep than SDRs. Rather than continuing to scale the SDR function, they diagnosed the problem and made two key changes: they became more sophisticated with lead scoring, being prescriptive about which accounts SDRs should target, and they changed incentives from sourced opportunities to closed revenue.
These changes radically improved SDR performance, enabling them to generate more closed revenue than their AE counterparts. The lesson: understand your attribution numbers and don't invest in hiring more SDRs if you're not satisfied with the existing team's performance.
Trends in Outbound
The industry is moving away from "spray and pray" cold email sequences as this approach is losing efficacy. Reply rates are down to 1% or 0.5%, with meeting rates even lower.
Three effective alternatives to traditional cold outreach:
Leverage networks: personal networks of employees, investor networks, and existing customers. This approach yields higher ROI than cold outbound.
Give away something of value: Sam shared an example from OpenStore, where they tested different outbound approaches. Offering to send a bottle of champagne for a holiday celebration converted at exponentially higher rates than traditional outreach or even buying the prospect's product.
Combine outbound with brand tailwinds: Coordinate with marketing efforts, leverage PR around funding announcements, and time outreach to coincide with when prospects visit your website.
Q&A: Getting AEs to Prospect
In response to a question from Jason Lemkin, Sam acknowledged the challenge of getting AEs to do outbound prospecting. Many AEs prefer the "least effort path to quota attainment" and resist outbound work.
Sam admitted it's difficult to change an existing sales culture where AEs don't do outbound. The solution is to ingrain outbound in the culture from day one.
For underperforming AEs (bottom 50% of the team), Sam looks deeper at effort and attitude. What's unacceptable is someone who is not performing and not putting in the effort. For these individuals, he monitors their activities closely and addresses lack of outbound effort directly.
Top 5 Mistakes in Building an SDR Team:
Hiring SDRs before establishing a successful outbound process with AEs
Failing to have proper management in place for the SDR team
Hiring inexperienced SDRs as your first SDR hires
Scaling the team before ensuring the existing team is effective
Sticking with outdated "spray and pray" outbound tactics when they're no longer effective