Getting to Initial Scale

When the Player-Coach is Just That. And No More.

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Jason Lemkin

We’ve talked a lot on SaaStr about not screwing up that VP of Sales hire.  Done right, it will accelerate your company to the next level.  Done wrong — you can lose the better part of a year, and half of your last round of capital.

And we’ve talked a lot about the trade-offs in the hire, including how to think about Stretch VPs … the ones that haven’t quite done it yet, but working for you is their shot.

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The reality is, most of you are going to hire a Stretch VP for your first VP of Sales, or at least, your first VP of Sales that works out.  More on that here and here.  Otherwise, you’ll probably be stuck with a Failed VP, or someone from Too Big a Company that never did it, etc. etc.

Once you’ve made the hire, then you have make sure you’ve got it right.

I’m going to suggest two gates, two quiet check-in points:

First, revenue per lead has to go up within one sales cycle.  It just has to.  We talked a lot about this here.  If a VP of Sales can’t take the leads you already have, and at least, get more money out of them than you did … he has failed.

When we first wrote about this here, it was controversial, a lot of people said “you have to give a VP of Sales more time”.  But I think once everyone that’s done it thinks about it, they agree.  Any decent VP of Sales drives revenue up at least within a number of months equal to your average sales cycle.

OK, if she passes this test, if she increases revenue within one sales cycle — then good news!  She can sell, and sell with spirit, authority, and chutzpah.  She can take over for you as the interim head of Sales.  Which is great.  She can close deals, and take a lot off your plate.  That is a big deal.

But next up is a second test, and one that ultimately is just as important for a VP of Sales:

The second test is if, within a second sales cycle, by say month 5 or 6 at the very latest … has she scaled up at least one (and ideally two) other sales rep that has truly hit quota?

Because there’s a pattern I see with maybe 30-40% of Stretch VPs.  They are great individual contributors (or you never would have hired her).  They are aggressive, so they can bring in the first batch of hires for her team.

But sometimes, the management and training skills aren’t there.  At least, not yet.  She doesn’t yet, at this stage of her career, have the ability to get folks she hires to hit quota repeatably.

And this will be super frustrating all around, because in this scenario, she’ll still be hitting quota herself … either literally, by carrying her own quota as VP of Sales, or by so backfilling the team that she essentially closes all their big deals for them.

This is when, often sadly, you have to make a change.  You have to.  When, by the second full sales cycle, she hasn’t been able to truly grow the team into multiple quota-achievers.

OK, so that’s the problem.  Don’t let it drag on any further.  She’ll never hire and scale a good enough team under her to hit the plan.  She never will if she hasn’t gotten 1-2 AEs to hit full quota by say month 6.  It’s not even her fault in this case.  She just needs to still report to a great VP of Sales.  Which isn’t you.

So, my suggestion, is sit down with her at this point and be honest and appreciative.  Because if you are both, there’s still a chance you can make this all work and not lose your best closer.  You can tell her we need a VP of Sales that can truly build a team, and that’s not her — yet.  But you want her to stay.  As a Director of Enterprise Sales.  As a Senior Sales Lead.  As something.  And that you aren’t going to cut her OTE comp (ideally).

After all, in this case, it’s not her fault.  It was just a stretch too far.  After another few years reporting to a great VP, she may well be ready.  And if you can keep your top closer in an IC role, or team lead role for a while, your revenue won’t take the hit it would if you lose her.

Published on May 4, 2016
  • John Sherer

    Thanks for the post, Jason. What is some of the best content you’ve come across to help a stretch-vp nail training? Specifically for a technical product.

  • Chris

    Great post and completely agree, especially since I’m one of those stretch VPs. I would remind all founders to heed this statement, “drives revenue up at least within a number of months equal to your average sales cycle.” While you may expect to see results within 3 months, if you are a true enterprise SaaS play, you likely won’t see results until 6 to 9 months in, especially if you had a failed VP of Sales previously who may have pursued the wrong leads, wrong strategy, etc. I had to “undo” a fair bit of the work of my predecessor and it took a solid 9 months (equal to our sales cycle) before it was apparent my actions were working.

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