One of the biggest changes since we started SaaStr is the massive number of SaaS veterans out there. The decade-long run of next-generation SaaS start-ups, and the incredible growth in SaaS unicorns and decacorns has led to a lot of experienced execs on the market. This is great. I wish there had been even a fraction of this many SaaS execs when I was getting going.
- But many experienced folks just don’t want to do it all again. Because SaaS is hard. Each quarter, the bookings plan starts at $0 again. The lead commit goes up each quarter and every year. The bar to grow even faster has been raised. And as time goes on, not everyone wants to do all of that again.
- So it’s natural to want more of a team to do it for you. To hire 3-4 folks to do what you used to do mostly yourself. To want a head of sales operations and a director of sales to help carry the load not later … but on Day 1. To not have to manage any customers yourself in customer success, and instead be a strategist. To hire a head of demand gen to get those leads for you, so you don’t have to get all those leads yourself this time.
- In many cases this is a good thing. When you are ready to really scale — say $8m-$10m+ in ARR, usually — there is now a whole surplus of candidates who will come in and build a team for you. Often in just a month or two, if they are good at recruiting and have kept their network warm (as the best leaders too). These days, the top VP candidates already are keeping 3-4 folks warm for their team. They know they’ll need them for their next role.
- And you’ll need a true team with management layers in each functional area after $8m-$10m ARR. You can’t scale after that without one. Your marketing team will need, not just a VP, but a head of demand gen, a head of content marketing, a head of field, and even marketing ops. You’ll need 5 folks in marketing at $10m+ ARR, not 1. You’ll need not just a VP of Sales, but also a head of sales/revenue ops, a head of SDRs, a head of East Sales and a head of West Sales, a head of Business Development, etc. as you race past $10m+ in ARR.
The mistake, though, I see a lot is hiring this SaaS Veteran That Needs a Team Too Early. There are so many great experienced SaaS execs out there, you may want to hire one you fall in love with at $2m-$3m-$4m ARR. That has the experience, the insight, and even the intuitive deep connection to your product that is so appealing.
But if she or he won’t do the work herself, are you ready to sign up for not just 1 hire — but 5+? Do you have the budget? And do you have the budget for all the soft and hard costs associated with those hires?
In fact, a seasoned VP often net net costs 10x what a Stretch VP costs. That math here.
Most of you don’t have that budget and capital. Not yet. So make sure your dream VP can really do most of it herself in the early days. Or at least, with just 1 or 2 key hires. Push here. Make sure they will really do whatever work you need them to do on the budget you really have.
Because I see too many CEOs fall in love with an exciting VP that in the end has done it all herself before, but today, doesn’t want to anymore. Which is fair. It’s just, unless you have the scale, the capital and the infrastructure to support an entire team now … that great VP. Won’t be great for you.
And she or he will fail, leave, or both.