Always Be Closing
How remote work will enable tech sales jobs to drive growth for secondary markets
Remote work unlocks opportunities for people outside of core markets. The sales profession is growing rapidly, and has lower barriers to entry than coding. Secondary cities with lots of young people can utilize programs like Flockjay to exploit this opportunity and grow their economic footprint. For real estate investors, opportunities that mirror Phoenix and Salt Lake City will emerge.
Upon college graduation, I reached a crossroads. I graduated from the #2 ranked real estate program in the US (go Badgers), but wasn’t interested in the career paths I saw ahead of me. I knew I wouldn’t Excel in a role where I was making spreadsheets all day and would stagnate. I also thought the then-current methods within real estate for tracking and analyzing data, searching for space, and forecasting were wildly outdated. As a result, I developed an interest in startups emerging within the real estate space.
Eager to break into this world, I took a job in sales at SiteCompli—a software company that tracked building compliance. Software sales wasn’t a field I sought out (or had heard of) back in Wisconsin. To me, my first job was an avenue to get to where I wanted to go, which proved fruitful when I left SiteCompli for WeWork.
Much to my surprise, software sales was not only lucrative but constantly offered available positions. While software sales wasn’t the endgame for me, I learned a ton, and I found it peculiar how little visibility I had into this field coming from the Midwest. Descriptions of the Midwestern work ethic often include: hard-working, personable, empathic, and organized. These traits are ideal for succeeding in sales, almost as if the years of selling oneself on toughing out cold winters hardened these attributes into us.
So why, according to a 2018 Ladders Report of the 15 cities with the most $100K+ tech sales job openings, did NYC and SF have over 30,000 positions available, while Chicago had 13,000, Minneapolis 5,000, and no other Midwest city had above 3,000?
Here is where you tell me I’m stupid and that SF and NYC are bigger technology hubs and pay higher salaries on average, so naturally, the data bears out the trend.
But, is sheer geographic magnitude the most effective way for these companies to source talent? Sales is a critical function for a tech company of any size—especially mid/late stage startups. Do SF + NYC have enough talent to keep churning out highly skilled sales people to sell these products? Maybe, but I bet plenty of undeveloped and cheaper talent exists elsewhere. If only there was some sort of shift that could allow and incentivize these companies to source talent from across the country….
Always Be Closing
The intention of this post isn’t to extrapolate all the effects of the shift to WFH models, or to argue about what the future of the workplace looks like. For that, check out Packy’s post, “We’re Never Going Back”, or Dror Poleg’s book, Rethinking Real Estate. However, it’s undeniable that the professional world changed irreversibly in 2020.
A Gartner survey of company leaders found that 80% plan to allow employees to work remotely at least part of the time after the pandemic, and 47% will allow employees to work from home full-time. In a PwC survey of 669 CEOs, 78% agree that remote collaboration is here to stay for the long-term. Kate Lister, president of Global Workplace Analytics, estimates that by 2025, some 70% of the workforce will work remotely at least five days a month.
This shift will enable employers to broaden their talent pool geographically. Even if tech companies continue to concentrate in the Bay Area, NYC, LA, and the othet usual suspects, certain job functions will operate remote. Previously, remote jobs at tech companies were mostly concentrated within the engineering department. Working from home was associated with software engineers, who spent the majority of their day heads down writing code.
While certain sales jobs occurred remotely, they tended to be “outside sales” roles in which individuals essentially operated as traveling software salespeople. These roles still depend on proximity to physical business centers where the clients work and the pitches take place. Pre-pandemic, the majority of major sales meetings occurred in person. While initial stages often took place over the phone or Zoom, a perception existed that deals close quicker in person. Due to this industry wisdom, fast growing companies built the majority of their salesforce within the confines of HQ. Where were these companies primarily headquartered? Well, according to Indeed, the top 10 markets for technology job openings in 2020 were:
That list correlates well with a Glassdoor report of the top 10 highest paying markets for sales professionals.
Currently, tech companies are limiting their pool of available sales talent and paying top dollar for said talent. You may wonder—at this point, are these cities simply the best place to source sales talent? Can you really discover or develop talent at scale in smaller markets?
The answer to that is yes— all you need to do is look at Utah. You read that right.
According to a study released by the Kem C. Gardner Policy Institute, Utah’s tech job growth is the second-fastest in the nation at 4.9% per year over the last 10 years. Utah developed a reputation as a hotbed for enterprise B2B software, with most attributing its success to a unique and successful culture for sales. In Fast Company writer Adam Bluestein’s post, “How Mormons Built the Next Silicon Valley While No One Was Looking”, he describes how most of these B2B software founders have gone through what amounts to perhaps the most strenuous sales “boot camp” in the world: a two-year mission spreading Mormonism abroad.
Additionally, this is Aaron Skonnard, CEO of Utah based $3B software company Pluralsight, on why Utah has been a hotbed for selling software:
“It’s an incubator for those skills, because you’ve got to live with people you’ve never met before. You’re assigned a companion who you’re with 24/7 until you get changed. And you’re constantly being rotated between different companions – which you have no choice or input into. And then you go out and sell the hardest thing it is to sell, which is religion. I do think there’s something transformative about that experience that produces leadership qualities, selling skills, and high EQ.”
This sentiment speaks to something that separates sales from a lot of other functions within tech. Sales is extremely difficult, but can be taught to anyone possessing the right mindset and willingness to learn. Jobs such as software engineer, data scientist, UX designer, etc. require specialized skillsets and usually a degree or a specific program certification. Sales only requires a pipeline of (mostly young) ambitious people willing to work hard, something that many cities boast. More on this in a bit…
So overall, what has this tech sales success meant for Utah’s job and real estate markets? According to the Kem C. Gardner Policy Institute, tech companies now account for 18% of the state’s GDP, with the average salary of a tech employee $47,600 higher than an employee in another industry ($106,100 vs $58,500). The state collects $2.5 billion in tax revenue from the tech industry, and this is what the housing market in Salt Lake City looks like:
This isn’t a one off— another Western city exists that leverages software sales jobs to expand its economic footprint.
In 2008, Phoenix was considered the epicenter of the housing crises. According to the Obama Administration’s Homeowner Affordability and Stability Plan, two-thirds of all residential mortgages in metropolitan Phoenix were underwater. Phoenix had 117,000 foreclosures (the third most in the US) and the unemployment rate peaked at 10.3%.
Fast forward 6 years and Phoenix was singing a different tune. According to CBRE, during the prior two-year period from 2014 to 2015, Phoenix ranked second with a 36.3% increase in tech jobs, trailing only San Francisco. By the end of 2018, Phoenix employed 57,311 workers in high-tech software and services, according to CBRE, the 12th most of any U.S. market. What role did sales play in Phoenix’s tech renaissance? According to a 2017 LinkedIn Global Recruiting report, Phoenix was the second densest sales hub, with a growing talent pool every year. Residents between 18 and 34 years of age are projected to account for 24.2% of the total Phoenix metro population by the end of 2021. Per Zillow, the residential housing market follows this high growth narrative:
During my time at WeWork, when I spoke with enterprise companies looking to expand their footprints, Phoenix frequently came up under a specific use case. As companies increasingly utilized a hub and spoke approach for their office space, the top destination to build sales and customer success teams was Phoenix. The main reasons cited— a fast growing 22-35 year old population and cheaper salaries relative to SF, NYC, LA, Boston, and the like.
These companies’ goal was to find young + cheap talent and develop it into a successful sales force— Phoenix simply provided the best way to accomplish this.
Somewhat unfortunately for Phoenix, the rise of remote work in 2020 might kill that competitive advantage. There are plenty of cities in the US that boast (1.) lots of young people and (2.) cheaper salaries relative to those of SF, NYC, LA, Boston, etc.
As office workers shifted to working from home in 2020, many predicted a steep decline in sales for public SaaS companies. However, the opposite happened. Sales grew 43% year over year and SaaS stock performance did this:
Tools like Zoom, Gong, Outreach, Slack and Google Suite made selling from your couch not only doable, but successful. Going forward, it’s safe to assume companies will capitalize by increasing hiring outside of major markets, reducing labor costs.
What does this mean for cities, specifically secondary markets looking to grow?
If the goal is to grow a city’s job market, the first place most start is tech. Frequently, people associate technology jobs with software engineering. We’ve all heard the advice that “everyone should learn to code” or that workers should be retrained through “teaching them to code”. As someone who tried to learn how to code, I can attest to how foolish that attitude is. While many people have the capacity to code, it’s naive to assume that every personality type will pick up such a specific skill set.
As mentioned above, skills like coding, design, and data analysis require a degree or advanced skill set learned through a specific program. Part of the reason the attitude of “learn to code” took hold is the prevalence of coding schools, such as: Lambda School, General Assembly, Flatiron School, Fullstack, App Academy, etc. These programs allow for companies to source from a wider pool of talent than just college graduates, without taking on the responsibility for skills training. If a job-seeker lives in a smaller city, they can attend Lambda School online, learn to code, and get hired for a remote software engineering role, all without a college degree. This journey represents a tremendous economic outcome, often doubling or tripling that person’s income.
Given that tech sales does not require an advanced degree, it’s easier for cities to expand the pool of available talent. As companies seek to fill more of these roles remotely, who will step up and serve as the Lambda School of sales for these secondary markets?
One answer is Flockjay. Boasting that sales is “the best kept secret in tech”, Flockjay promises through online classes and live instructors to teach you everything you need to know to be job ready in just 10 weeks.
“Most people don’t even know that a job in tech sales is even a possibility,” Shaan Hathiramani told Techcrunch. The average income of a student before they go through Flockjay’s training program is typically $30,000 to $35,000 according to Hathiramani. Upon graduation from Flockjay, those students can expect to make between $75,000 and $85,000.
Similar to the value proposition of coding schools, that income jump equals a tremendous economic outcome for that individual. Additionally, the tech sales industry’s massive growth rate supports a multitude of these potential payoffs. The 2020 LinkedIn emerging jobs report places job growth at 34% for sales development representatives (SDR) and 28% for Chief Revenue Officers (CRO). Worldwide, sales talent — from entry-level to senior-executive — ranks among the top three hardest skills to find, according to Manpower's latest Talent Shortage Survey. With more companies willing to hire remote, a service like Flockjay will emerge as critical to supporting the growth of the sales profession.
As we’ve seen with the growth of markets like Phoenix/Salt Lake City, tech sales roles provide substantially positive economic outcomes for cities and real estate markets. As tech companies shift resources to support more remote sales going forward, opportunity exists for multiple cities to grow as their citizens fill these positions. The good news for these secondary markets is that programs like Flockjay provide the infrastructure for anyone to be successful.
If you’re an ambitious 24 year old living in Cincinatti, Ohio, you could complete the Flockjay program and immediately secure a role at a partnered SaaS company— potentially doubling your salary. For residential real estate investors, it makes sense to pay attention to secondary markets with a high net migration of millennials (San Antonio, Nashville, Columbus) that can supercharge growth with many additional tech sales roles.
Remote work unlocks opportunities for people outside of core markets. The sales profession is growing rapidly, and has lower barriers to entry than coding. Secondary cities with lots of young people can utilize programs like Flockjay to exploit this opportunity and grow their economic footprint. For real estate investors, opportunities that mirror Phoenix and Salt Lake City will emerge.
Where will those opportunities be? Look for cities with an abundance of closers.
Cheers,
Evan