Counterintuitively, Peets argues that very low sales team attrition (e.g., 2%) is a red flag indicating a lack of accountability. For a scaling company, he models 25% annual attrition, comprising performance-based terminations (~10%), promotions, and voluntary departures, as a sign of a healthy, high-performance environment.
"Mercenaries" are transactional reps who perform well but leave when conditions change. "Patriots" are mission-driven team members who build a winning culture. While startups may need mercenaries for early traction, long-term success requires actively cultivating and hiring for patriot-like qualities.
Challenge the 'hire slow' mantra. Hiring is an intuitive guess, so act quickly. Once a person is in the organization, their performance is a known fact, not a guess. This clarity allows for faster decisions—both in removing underperformers and, crucially, in accelerating the promotion of superstars ahead of standard review cycles.
If you can't pay employees enough to retain them, the root cause is likely a flawed sales process, not a hiring issue. A weak sales motion prevents price increases, which suppresses profit margins and ultimately limits what you can afford to pay your team.
When a company consistently misses sales goals, the root cause may not be the sales strategy but a failure in the hiring pipeline. A high employee churn rate combined with an inefficient screening process starves the sales team of the necessary manpower to hit its targets.
Peets uses a simple rule to assess sales team health: the new ACV per rep must be at least three times their On-Target Earnings (OTE). If a team isn't meeting this benchmark in an established business, the unit economics are broken, and the company likely has too many salespeople.
Firing decisions should be a function of both incompetence and business constraint. Not all underperformers are equal priorities. Some are like a "trash can on fire in the driveway"—a problem, but not the company's main bottleneck. Focus firing efforts on roles that are the direct constraint to growth.
Don't hire more reps until your current team hits its productivity target (e.g., generating 3x their OTE). Scaling headcount before proving the unit economics of your sales motion is a recipe for inefficient growth, missed forecasts, and a bloated cost structure.
The cost of setting quotas too high is catastrophic: you demoralize and lose your A-player sales team. The cost of setting them too low is manageable: you overspend on commissions but exceed targets and retain a motivated team. The latter can be adjusted; the former is an unrecoverable error.
A sales organization has truly scaled when leadership stops talking about individual deals and starts managing based on predictable capacity. This means knowing that a certain number of ramped sellers will predictably generate a specific amount of revenue each quarter, turning sales into a machine.
Don't fire reps based only on a missed ramp quota. Instead, observe if they make consistent, incremental improvements in skill and knowledge during calls and role-plays. If progress is visible, they're worth keeping, even if it takes over a year to close their first deal.