Ah, the VP of Sales.  The toughest hire.  Such a high failure rate.  I want to help.

So this is the third in our series.  The first post is What a Great VP of Sales Actually Does.  So you expect the right things and hire your rockstar at the right time to do the right things.  The second post is a script for you to use (and modify as you see fit) – 10 Great Questions to Ask a VP Sales Candidate.  So you hire someone that really did it, and can do it — not a pretender.

OK, so you’re ready to make the hire.   You know what to expect.  And now you’ve got your script to help ferret out the posers.

Now — who do you hire?  Just so you know, there are 48 Different Types of VP Sales.  If you want it to work — make sure your top candidate is the right type for your SaaS company.

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First, let’s look at 4 stages of ARR and the 4 types of VP Sales that match those stages.  Because the #1 mistake is hiring someone for the wrong stage, with the wrong stage experience:

The Evangelist.  The Evangelist is someone that is generally very smart and passionate about your product (already understands it in the first meeting) and is very customer-centric.  The Evangelist can immediately go out and just start selling your product to anyone they can get a meeting with and can chat the ear off any inbound prospects.  The Evangelist can seem like just what you need to hire if you’ve never hired a VP Sales.  You’ll like the Evangelist.  A lot.  So does everyone on your team.  The problem with The Evangelist?  He or she has never actually built or scaled a sales team before.  They know how to think creatively and cross-functionally.  They’re fun to work with.  But 9 times out of 10, this is a waste of a hire and your time unless it’s super early.  Because you have to be the evangelist, along with the first 1-2 reps you hire.  Look for these skills in your first reps.  But after that, as your first VP of Sales — you need someone that can scale and really build a team.  Not just be engaging and know the product cold.

The only exceptions I’ve seen work here is if you yourself don’t talk to enough prospects and customers — so they can at least do that for you in the early days — and you can move this person over to, say, VP Biz Dev after you hire both the first 1-X reps and a real VP Sales.  That can work if the founding team has very limited experience with customers and customer management.  But if you do this, you’re going to need to bring in a real VP Sales pretty quickly, as soon as you hit $1-$2m in ARR probably.

Mr. Make-it-Repeatable.  This is the unicorn.  This is what every SaaS company post-Initial Traction needs, like a VP of Demand Gen Marketing (vs. Corporate Marketing).  The problem is 95% of VP Sales on the market can’t do this phase.  In this phase, you have some customers.  Not a ton, but some.  You have some inbound leads.  Not enough, but at least a few.  You have a micro-brand.  You’ve hired 1-4 reps on your own.  But you have no idea or ability how to scale this or get it to the next level.

Here’s what happens with Mr. Make-it-Repeatable if you get the hire right.  Almost immediately, your Revenue Per Lead goes up.  Because they know how to close.  They know how to hire and recruit.  And they know how to build the basic processes you need to do it again, and again, and again.  Because they like winning, they like managing, and they like figuring out the puzzle of how to get from $1m or $2m to $10m or $20m+.  The improvement, if you make the right hire, in fact, happens in one sales cycle or less.

If Your VP Sales Isn’t Going to Work Out — You’ll Know in 30 Days

This VP Sales at this phase just has to make it happen.  They can’t pretend or hide behind Powerpoint presentations or “pipeline” dashboards.  They can’t take credit for other’s people’s work.  They can’t just be a glorified order taker.  Most folks with Director or VP of Sales “experience” on their resumes can’t do this phase.  But if you find someone at this stage that has actually done it before, for real — it’s glorious.  Find this person.

Ms. Go Big.  This is hard to find for real, too, but it’s not quite as hard as Mr. Make-it-Repeatable.  Why?  Because coming into a decently funded SaaS company with $10-$20m in ARR … well … it’s all a process.  You sort of do the same thing, again and again at this phase.  You hire more of the right people that are a fit for your ACV.  You standardize and scale your SDR program.  You go upmarket a bit, often, and build out a field sales team.  You get the lead generation engine really working with the VP Marketing.  You move to a true account-based approach for larger customers.

It’s hard to find these candidates but you can find them.  Just get them from a company that just went through this phase.  But don’t expect 95% of these candidates to be able to do the earlier phase, from $1-$10m, if they haven’t really done it before.  Our VP of Sales at Adobe Sign / EchoSign, Brendon Cassidy, was able to do the whole thing.  But it helped that he’d been the first head of sales at LinkedIn and build out corporate sales there from zero leads and almost zero revenue …

And unlike Brendon, not all Mr./Ms. Make-it-Repeatables can scale and grow into Ms./Mr. Go Big.

>> Also, note one key thing: it’s extremely unlikely any VP Sales candidate from Salesforce, from Successfactors, from Twilio or Stripe (yes these are big companies now), from whatever Big SaaS company can possibly fill either of these roles.  They will all almost certainly fail.  Why?  They just never even remotely did it at your phase.  Joining Salesforce when it was at $1 billion in revenue, even as a manager?  Yes, it’s SaaS … but the sales processes at $1b+ just are so different from an $xm ARR start-up.  It’s not their fault — but they just won’t understand how to do either of these phases.  With enough capital, they can hack the Ms. Go Big phase, but even then, it’s rough and expensive.

Mr. Dashboards.  This is unfortunately what you get a lot of when you try to recruit out of the Big Cos.  This VP really understands how to sell up.  How to make an internal presentation.  And he often looks pretty good in a suit.  Your board will probably love them.  But really, all they do all day is look at and think about Dashboards and meet with his Managers.  They often don’t even really talk to customers and prospects all that much.

What changes can I make to the team to get the dashboards up?  How do I get more resources?  More budget?  Who can I hire, and who can I fire?  How do I get rid of the bottom 20%?  Where should the SKO be this year, and what sort of suite can I get?  What events can I do behind a secret rope for my Top 50 prospects?  This is what they work on, in large part.  And all this does matter at scale.

At some point, you will need Mr. Dashboards.  That’s fine.  A manager of managers of managers.  But whatever you do, don’t hire him until you are past Unstoppable.  Because unless he or she did it for real before they were Mr. Dashboard — they have no idea how to get you to $5m, or $10m, or $20m. No idea at all.

-> Finally, we can distill a lot of this down to one key criterion:  Has Your VP of Sales at some point in her career sold at a startup at your ARR today?  Or at least — where your ARR will be 12 months from now?  You can stretch this to 12 months from now, because you’ll be there soon enough, and you need to hire and start selling like the startup you will be in 12 months.  So if your top choice worked at a startup at $25m ARR and you’re at, say, $10m-$12m ARR today, that can work.  You can backfill some of the gaps.  But it’s unlikely to work out if you are at, say, $5m ARR.  That’s a stretch too far for a candidate that has never worked anywhere below $25m ARR.


OK, now you say, I get it, there are basically 4 types of VP of Sales for a SaaS company.  I’ll make sure to hire the right one.  But, SaaStr, how did you get to 48?

Aha.  Because once you have the right candidates with the right backgrounds above, then you need to make sure of three more factors:

#1.  Can They Do Competitive Sales?  Many VP of Sales are NOT good at competitive sales.  That may be fine depending on your market.  But if your market is extremely competitive, make sure your VP Sales comes out of that background.  Folks out of Salesforce, for example, are great at many things.   Competing, in my experience, is not one of them.  At Salesforce, they need to be good at closing, at upselling, at driving up the deal size, at getting people to buy something they may not even deploy for a year.   It’s tough.  They are competing — but it’s for budget dollars and against inertia.  But they aren’t really competing with Oracle, Microsoft and Netsuite.  Not in a deadly, winner-takes-all-fashion.  Not really, at least not in most segments.

So if you are in a competitive space, make sure you hire someone that loves to compete.  If they do, it’s fun.  If they don’t, they’ll flail and be miserable.  And thus fail.

#2.  Experience With Similar Deal Sizes.   Broadly speaking, there are 3 categories of ACV for most SaaS companies:  $x,000.  $XX,000.  and $XXX,000.  Of course, you may have customers of all different sizes, most of us do.  But optimize your VP of Sales around your average deal size, your ACV.  Hire someone that has only done $50,000+ deals, and they’ll have no idea how to manage a high-velocity in-bound team doing $5,000 deals.  Hire someone with tons of $5,000 deal experience — I doubt they’ll know how to Sell to Power.  How to really get on jets and close.  How to do field sales.  And you’ll lose lots of the big deals to the competition.  And/or close them for far less revenue than you could.  So make sure your VP Sales has at least some recent experience at a somewhat similar deal size / ACV.  And ideally that your core ACV is their sweet spot.

#3.  Inbound vs. Outbound.  If your model is primarily inbound, make sure you hire someone that has managed a lot of inbound.  If you need an outbound component, make sure the VP Sales can do that.  Can he or she hire a whole floor of SDRs, trying to get meetings set up?  Most VP Sales have done a little bit of both, but whichever is a bigger part of your business, match that to their experience.  Almost all VPs of Sales are better at one or the other.

So 4 different stages of VP Sales by ARR x 2 different competitive experiences x 3 different deal sizes x 2 types of leads/customers = 48 types of VP Sales.

No matter how exciting a candidate seems, make sure you have the right type.  I know it seems to narrow the field down quite a bit.  I’m sorry about that.  But be patient.  Find the right fit, and it will all work out well.  Skimp here, hire someone from the Other 47 — and they will Fail.  I can almost guarantee it.  And it won’t be their fault.  It will be yours.  After all, you know all of the above.  They don’t.

(note: an updated SaaStr Classic post)

The Playbook to Hiring Your First VP of Sales and Not Screwing it Up…….with Cassidy Ventures Founder Brendon Cassidy (Video + Transcript)

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