As you try to hire up for your SaaS company, you’re going to be faced with a lot of choices and trade-offs.  No hire is the perfect package.  Do you take a risk on someone a little more junior than you’d like?  Someone from a company a little larger than you’d like?  Someone from a very different industry?

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I don’t have all the answers here.

But there’s one thing I can tell you in SaaS, at least:  Almost Everything Except the Product Itself is Sort of the Same at a Given ACV (Annual Contract Value) Level.

By that I mean:

  • If your deal size is, say, $5k per year, there’s a certain way you sell.  A certain way you market.  A certain way you retain customers and prove support.  A certain way, even, that you build software.  A certain way you deal with a high velocity of leads, and a need to close a ton of deals each month.
  • With $20-$50k deals, it’s different again.  You can spend more time with prospects.  You close fewer deals.  Customers will expect more services, more account management, more configuration.
  • At $100k+ deals, it’s different again.  You’ll need to get on a plane, most likely.  You may need solutions architects, more sales engineers, more support.  Marketing can do things that seem very expensive, but don’t need much yield to be High ROI.  Your engineers can build complex features that only a handful of customers use.  Your VP Product will really get to know individual customers.

I’ve learned I can pretty much predict what you’re doing, and what you will be doing in your SaaS company, and help you staff up, if I just know three things: 1.  your stage, 2.  your current Average Deal Size / ACV, and 3. your target Average Deal Size / ACV for next year.

You’ll want different salespeople for different segments, obviously.  But more importantly, you have to start with just one VP of Sales.  One VP of Product.  One VP of Marketing.  None of even the best candidates will have done it all, all segments.  So I’d pick candidates for all your top positions, even VP of Engineering, that have worked extensively and ideally primarily with customers/products at your target deal size.

My learning, suggestion, and insight is just this.  Hire the smartest, bestest people you can.  Of course.

But then, hire people who can sell, who can market, who can ship software, who can retain customers, and who can build features, that match your target average Deal Size for next year, for the next level of your company.

Then they’ll have already learned 80-90% of the skills you’ll need to have to succeed in your organization.  You can drop them in and they’ll just succeed.  Even if they have no idea how your product really works, what your customers are really like, or what makes you special.

And this in the end is a lot more important than domain expertise and industry experience.  If you’re smart, you can pick that up in a month or two.  But the skills it takes to sell to a $10k customer?  That can take years to really acquire.

(note: an updated SaaStr Classic post)

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