Quantifying the Cost of a Bad Hire

This post is by Tomasz Tunguz from Tomasz Tunguz

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The chart above compares the contribution of two hypothetical inside sales people with $400,000 quotas to an early-stage startup’s finances. In this case, contribution is the 18 month revenue of sold customers tallied cumulatively minus the salary costs of $100k annualized of the sales person. I’ve modeled a six month linear ramp for the sales person to reach 100% of quota. The red line shows the case for a successful sales hire.

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