What is this talk about?
Avoiding common mistakes when hiring your VP Sales, and tips on how to do it right.
Who is Jason Lemkin?
Co-founder & CEO, EchoSign (Acquired by Adobe), SaaStr. Did $100M in revenue with Adobe this year.
How to hire your (first) VP Sales (and not screw it up)
Non-scientific study of 80 startups. 70% of Saas first VP Sales don’t make it to 12 months. It’s one of the most common, and also most devastating mis-hires in startups. However, if you avoid the most common mistakes, you’ve got much better chances of finding the right VP Sales.
Mistake #1: Wrong hire for your stage
The biggest mistake is founders want to hire from Salesforce or Dropbox or another big name company. He made a personal mistake here as well. Hired “Mr. Dashboard” when he should have hired “The Evangelist”.
Stages and types of VP Sales:
- The Evangelist: < $1M
- Mr. Make it Repeatable: $1M–$10M
- Ms. Go Big: $10M–$40M
- Mr. Dashboards: $40M+
Don’t just look for a smart, talented, experienced person to become your VP Sales. Look for one who is a good fit for the job that needs to be done in your company.
Recommended reading: The 48 Types of VP Sales. Make Deadly Sure You Hire the Right One.
Mistake #2: You start hiring too late
When you have 10 customers, you should start looking for your VP of sales, because it can take you a long time to recruit a good VP Sales. It took Jason Lemkin 20 months!
Mistake #3: You expect your VP of sales to be a magician, instead of a manager
You need to give them time. Time to recruit great reps, time to help the sales team, time to tune sales tactics in order to maximize revenue per lead, time to make the right strategic decisions.
Getting these things right is more important than closing deals themselves. Although it is important that your VP Sales also closes deals, your VP Sales should first and foremost focus on the things that scale. Read this to get a better understanding of what your VP Sales should be really good at.
Mistake #4: Pipeline doesn’t mean c*ap
If you keep hearing pipeline, pipeline, pipeline ... you’ve probably hired the wrong person.
Here’s what you (and your VP Sales) should be focusing on instead as a key metric: Qualified Lead Velocity Rate. Read this to learn more about it.
Mistake #5: Your VP Sales must be accretive, not a cost center
Avg. pay for VP of Sales is $300k.
Key: Increase revenue per lead.
How to make your VP Sales a success on every level
- Start early, as soon as you have 10 customers.
- Don’t settle. Must be stage-appropriate and have done it for real.
- Do it yourself first. Only then will you know.
- Pay very well. But only for success.
- Trust. You must trust your VP, Sales.
Further recommended reading
When You Hire Your First Sales Rep — Just Make Sure You Hire Two (If you’re not yet ready to hire a VP Sales.)
Watch the 2:50 minute video segment “How To Hire VP Sales?”