The Benefits of Hiring a Stretch VP of Sales (and The Risks)
I’d been planning, and even started, to write a post on hiring a Stretch VP of Sales for a long time. It turns out Brendon Cassidy … who as VP of Sales at LinkedIn, EchoSign, and Talkdesk, took each from nominal to eight figures in revenue … had been working on the same post. So I’m turning him into a Guest Author at SaaStr. Let’s hear from him on this important topic. And since Brendon’s stuff rocks, expect to see more of it here. — ed./Jason
Hiring a VP of Sales in a startup is an incredibly hard thing. It requires good instincts, luck, timing, and plenty of other things to work. Even if you hire the right person there is no guarantee your startup is going to make it.
That said, it is gotten wrong a TON. And part of the problem is VP of Sales searches center too much around statements like “Jim was most recently the VP of Enterprise Sales at IBM” or “I want to introduce you to this gentlemen, he was the RVP at Salesforce and…). And just stop. Pause. And rethink this. There is another way to go about this.
If I were running a VP of Sales search, this is what my utopian criteria would be:
- Proven success building and scaling a startup from the ground floor to scale. Like $1-$50 million ideally.
- Experience selling deals in your price range and whatever the next level is after tilting upmarket.
- Understands and has experience running a sales org at your sales velocity (i.e. if your startup ASP is $20K in ACV with 45 day sales cycles and sells to the business side, if you get someone who matches that criteria that’s a pretty good bet).
- Can hire a team from scratch, and ideally has a list of people he wants to hire and people that want to work for him.
So if you can find someone who has all that, go get that person.
You done yet? Yeah. Most of you aren’t going to be able to hire that person.
Why not? Because there aren’t a lot of people that have built SaaS sales orgs from the groundfloor to success and scale. There are some. Just not a lot. You aren’t getting Matt Cooley at Mixpanel (who built New Relic and is now crushing it at Mixpanel). You aren’t going to get me. You aren’t going to get Sam Blond (0-200 reps at Zenefits in 18 months). By all means try. But the odds are really, really, low. Because we are all pretty risk averse and all of you offer varying forms of risk. And often lots of it.
So that leaves you two options: Hire the BigCo VP of Sales (probably an RVP or Industry VP at Salesforce or Oracle similar), or hire a stretch VP of Sales.
What’s a stretch VP? A stretch VP is likely a Director level guy who worked for the gentlemen listed above. Ideally he was the #2 or righthand. He was integral. You can logically make a case that Company X would not have become what it did without that person. Certainly that was the case with Sam Blond at EchoSign. On big decisions and strategy, Sam was in the room. I valued his opinion. So as we continued to grow, Sam got to have a voice in the major decisions we made. He learned how it’s done. Sam learned the process, the pace, the hiring (he knew exactly who he wanted to take with him when he went to Zenefits). Maybe the stretch VP can’t get you to $100 million in ARR. But he/she can get you to $10 million or $20 million much faster than the alternative. And, frankly, that’s ALL you should be worried about at the moment.
For me, I’ll take that over BigCo VP almost every day of the week. Because BigCo VP really doesn’t know what he/she is in for. He/she is going to bring BigCo reps with them, and they REALLY don’t know what they are in for. And, voila, you just wasted a year of your startup life that you don’t ever get back. A year you may never recover from.
This what it all boils down to with a Stretch VP of Sales…and questions to ask:
- Stretch VPs have to prove they can hire, period. If they can’t they’re dead. How do you help them? How long do you give them?
- Stretch VPs have to prove they can hire someone who can close a deal quickly. If they can do it once, they have a shot at doing it 10 times.
- Stretch VPs have to prove they can learn.
- Make sure they know they can hire 1, 2, 5 reps ASAP. And that they have a hunting license.
- Be worried if they bring no one in within 30 days.
- Be worried if the first 2 people they bring in don’t quickly close a deal.
- Be worried if they don’t develop any mentors. Encourage them to by giving them an “advisor allowance” of a few shares for mentors.
- Revenue has to tilt upwards within 3 months. Otherwise move on.
But do your due diligence. Don’t reach too far here. Don’t hire the worst Director from New Relic, Box, EchoSign, or Dropbox. Don’t hire a field sales manager to run your inside sales team. Because that’s just not a match. But hire the VP’s #2. Trust me. You’ll be better off.
So readjusted criteria. Have candidates in 3 buckets:
- Perfect Startup VP of Sales candidates
- Stretch VP of Sales candidates
- BigCo VP of Sales candidates
Look at all 3. But prioritize accordingly.