It’s a bit of a bummer that oftentimes, once you finally hire a few great VPs at $1m, $2m, $3m ARR … and they do a great job … that they then don’t scale. They don’t turn out to be the right folks for the next level (as you approach and pass $10m ARR) and beyond.
A few signs I see again and again of VPs that can’t scale beyond $5m-$10m ARR:
- Lack of organization. You can get to $5m being only sort of organized. After that, though, you really have to get organized as a VP. Either by yourself, or with a Sales Ops / Marketing Ops / Some Sort of Ops leader under you. Look for dashboards, strong project management, strong pipeline projection after $5m ARR. If you don’t see things getting more organized, that manager can’t scale.
- Inability to hire great Directors / managers under them. Folks better and, in some cases, more experienced than them. By $5m in ARR, managers have to have begun to recruit great managers under them. Not mediocre ones. If you hear a lot of excuses about how their managers perform, it ain’t working. If you see too many weak and inexperienced managers being hired under her/him, it isn’t going to scale.
- Only hire folks that look, act, and talk just like them. Hiring your friends, and folks like them, can work OK in the early days, if your friends are pretty good at what you do. But it doesn’t scale. You need a village, a diverse one of all types, to scale.
- Fear of Large Numbers. Yes, the number gets bigger every year and every quarter in SaaS. It has to. The top leaders that scale embrace it. If you had a record $1m quarter last year, you may need a $1m month this year. And later, a $1m week. That can be very intimidating to those that can’t scale.
- Resistance to Distributed Teams. Everyone needs a distributed team of some sort to scale past $10m ARR these days. A sales team in Europe, or in a more cost-effective locale. A dev team in Israel. No one can scale in one location anymore.
- Threatens to Quit if You Bring in Her/His Boss. This is a tough one, but the best managers get that if they can’t scale, you’ll need to bring in someone that can. They get it. In fact, they say the same thing to their managers. If by contrast, a VP threatens to quit if you ever bring in a CRO or SVP above them, that’s a sign.
And finally, bonus sign #7:
- Things have flattened in their functional area for 2+ quarters. Everyone has a rough quarter. But if bookings don’t increase materially in 2 quarters, your VP of Sales has reached their limits. At least, without a boss helping them. Same with lead gen, story points, etc.
If you see too much of this, start recruiting a VP for the next stage. This doesn’t mean moving on from the current VP. It may instead mean hiring an SVP or CRO or CMO to help them get to the next level.
A bit more here: Around Year 5, You’ll Have to Build Your Third Management Team | SaaStr and in this Annual video on Building Your First Management Team with the CEOs of Zapier, Walkme, and Dialpad:
(note: an updated SaaStr Classic post)