Building a Sales Team

Hiring Your VPs: When Can You Compromise?

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Jason Lemkin

I know these days we’re all talking about Unicorns and Decacorns, but not too long ago, it was all about Rockstars.  That you absolutely, positively, have to only hire “Rockstars” in your startups.  The very best of the best.   As if that was some sort of profound insight 🙂

Rock_star_ver1It’s true.  A Rockstar engineer really is 10x better than the next tier.  And a Rockstar VP is really what you need in every position.  If you don’t think you need a great VP of Sales, Product, Marketing, Customer Success, and Engineering — then all that all that means is you’ve never worked with a great one.

And yet … is it worth waiting 6-9 months to hire a VP that’s a true Rockstar, if you’ve struggled to make the hire?  Or can you compromise?  And if, so, where and when?

There are no perfect answers, but let me throw out a few thoughts for each of the major SaaS VP positions:

Head of Customer Success – Where Can I Give?  What you really want is someone that has (x) successfully managed at least a small team of CSMs before, (y) ideally to quota, and (z) in SaaS.  The problem?  There just aren’t enough of them.  We’re just not far enough along in SaaS 3.0 to breed enough veterans here for all the next-generation SaaS companies.

What I do know, is if you leave this position vacant for even a month — you’re putting Second Order Revenue at risk.  You can’t afford that.  So I’d hire earlier here rather than wait.  I’d take a risk on someone that might be a leader, but isn’t proven yet.  It’s tough to hire someone without SaaS experience here, but even that, I’ve seen it work.  What you do need is someone with (i) experience managing customer implementations (ii) over an extended period of time (iii) to quantified success.  That’s the minimum spec.  But I’d give on almost anything else to not leave the role open too long.

Head of Marketing – Where Can I Settle?  Again, what you really want is someone that has (x) proven demand gen experience, with (y) true ownership of a lead commit and (z) the ability to also drive the strategic side of marketing, product marketing, competitive positioning, and all the rest.  Here again, we have the same problems as the Customer Success lead hire, but worse.  First, there just aren’t enough of these hires to go around.  And even worse, many of the ones that do hit (x) (y) and (z) … don’t really want to be hands-on anymore.  Maybe that’s fine if you’re at $5m ARR growing 20% MoM and just raised $20 million.  But for most of you, you’re not ready to hire a entire marketing team.  So you’re going to have to give, again.

To me the first question is — do you have leads?  If you have leads, then the Head of Marketing job in some ways is simpler. Maybe not easier, but simpler.  In that case, his or her job is, at the end of the day, (x) to increase your revenue per lead and (y) get more leads.  He or she doesn’t have to jump start the engine.  They “just” have to make it run better.  So if you have leads … I’d “settle” with someone that at least knows how to manage the funnel and has owned a lead commit.  Even if you aren’t getting that CMO visionary today.  At least, it’s something to think about.

If you have no leads though, you’re expecting a lot more.  You absolutely need someone that can create demand from nothing, the bare earth.  If you give and don’t get someone with that experience — it probably will be a hopeless hire.

Head of Sales – What Corners Can I Cut?  Again, a hiring paradox 🙂  What you really want is someone that has (x) built a successful team that (y) wants to do that all over again, (z) is willing to start again at your ARR level, and (aa) has a proven track record in SaaS.  That’s asking a lot.  Should you hire an up-and-comer?  Someone without similar ACV experience?  Someone who has been a team lead, but hasn’t really built a team?

A bad VP of Sales is a total disaster.  The worst hire you can make (maybe a bad VP of Engineering is even worse, but we’ll put that aside for now).  But not making the hire at all is pretty awful, too.

I think my net net advice is give on a lot, but there are two things you can’t give on.  First, your head of sales, must, must, must have recruited at least a handful of successful folks under him or her.  I just never, ever see it work out where the Head of Sales is learning how to directly hire (and really, manufacture) a great sales rep on your nickel.  Second, you have to match the right outbound vs. inbound experience.  A sales manager that has only done inbound will struggle to learn outbound on your nickel.  And to some extent, vice-versa.  A sales manager from the field will see inbound as a low-rent part of sales.  These field guys should not learn how to build and manage an inside team on your nickel.  You just don’t have that kind of time.

If your Head of Sales has hired a few amazing reps, and the core sales paradigm she’s experienced in matches yours … and you love him or her 🙂 … then I say, take the risk.

….

Net net my real advice here is yes, hire Rockstars.  But don’t let 6 months go by if you’re trying to get from Initial Traction to Initial Scale without making your critical management team hires.  Just don’t let it happen.  Your whole future is going to be derived from how quickly you get from $1m to $10m ARR.

Screen Shot 2015-03-02 at 10.49.17 AMThese strong hires here are going to get you to $10m ARR 20%+ faster (or more), and that will have a profound impact getting you to the next level.  But if you wait too long to make them, looking for perfection … you’re leaving money on the table.  Lots of it.  At the most critical stage of scaling SaaS.

And if you hire someone great to get you there, and they’re not the right person at $10m ARR … then top them.  You need to learn to do that.  Because when you’re scaling a team, the players change over time.  The team stays the same, but the players do need to change over time.  Even if we don’t really like it, sometimes, at some levels.

If you can’t hire all Rockstars … use the above guide to help know where to “settle” on great folks that are still at least the promising opening act for the rockstars.  And do it based on the calculated risks above.  Not faith.  Or hope.  Or a good looking, but not quite right, LinkedIn.

Published on March 4, 2015
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