There’s a simple point I’ve been talking about a lot lately, but it’s a super important one:

When the time comes when you have enough momentum, capital, etc. to hire a real VP or two … you don’t have to start with the VP of Sales.  Even though that’s often the VP role founders first decide they just have to hire.

It’s the natural place many of us start.   We get 1-2 reps to hit quota, and we realize we need help to scale past that.  And indeed you do that help.

The problem though with expecting to immediately hire a VP of Sales as your first VP just at the perfect time is two-fold:

First, many VP of Sales candidates are waiting for opportunities a half-stage or even a full-stage later these days.   There are just so many SaaS start-ups today, those stretch candidates that 4-5 years ago might have joined a SaaS company at $1m ARR today want to wait until  .. say, $3m-$4m to make that risky jump.  Similarly, many veteran candidates today see even $8m-$10m ARR as almost too risky, whereas a few years ago that seemed like a great time to join.  Today those same candidates may want to find a $20m+ ARR start-up to join, or one with massive funding.  After all, you’ll get the same equity and more comp with less risk as a VP of Sales (or any VP in many cases) by waiting.

So by all means, hire your first VP of Sales at $1m ARR or so if you can.  I did, and many of us do.  But don’t let it close off other potential VPs to hire first.

Indeed, don’t let the hunt for a VP of Sales stop you from hiring another VP as your first VP:

  • As we’ve talked about many times over the years, you’ll likely be more than ready for a VP of Demand Gen by $0.2m ARR — $1m ARR, probably even earlier.  If she can just increase your qualified leads by even 20% (not very ambitious for an experienced candidate that can hold a number), that often covers her cost right there at almost any stage.  More here.
  • Similarly, a great VP of Customer Success can more than pay for themselves by $1m ARR or even earlier.  Imagine she drives your net revenue retention over the next 12 months up from, say, 100% to 115%.  That’s another $150k+ in bookings just from that $1m base!!  That should cover her cost, and then imagine all the second-order and other revenue she’ll set up for the following quarters and years.
  • A great VP of Product can also work revenue magic far earlier than most of us hire one.   What if you do hire that VP of Product at $1m ARR instead of $5m ARR, and because of that, you are able to close another six-figure+ deal by making those prospects and customers super successful?  By getting the team to ship that one extra critical enterprise feature to close that deal?  Again, here he or she may pay for herself in just a quarter or two by helping you close 1 or 2 big deals.

So yes, hire that VP of Sales at $1m ARR if you can.  But if you find another great VP at the same time, hire her as well.  And if you can’t find that VP of Sales?  Hire any of the others.  It’s not the same.  But they should all be accretive.  And also, take some stress off your plate.

(note: an updated SaaStr Classic post)

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