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10 minute read
Hiring your 1st VP Sales - The challenge for founders to get it right...first time!
Unfortunately, the numbers don’t make for good reading, roughly 7 out of 10 first VP of Sales hires fail. The average tenure of these failed hires is around 1 year, so that’s a lot of lost time and capital for your business! Getting this hire right can be life or death for a start-up!
Making any hire carries risks, you can’t tangibly measure all hiring metrics, account for all scenarios, and foresee everything that is to come, but there are some things you can do to mitigate these risks and give yourself the best chance possible for getting the right VP sales, first time!
Who am I?
You are probably thinking ‘Who are you’? and ‘Why should I care about your opinions on this’? it’s a fair question. I have been working in the software/SaaS market for over 15 years as a global recruiter. In this time, I have supported well over 250 high growth (typically VC or PE backed) SaaS organisations and helped them to find top leadership and Go-To-Market talent globally.
Many times, I have been tasked with finding a company’s 1st VP sales hire, been brought in post hiring mistake to quickly rectify a negative situation or hire a VP Sales for later stage growth milestones. In this time, I have seen every hiring mistake in the book and made many of them myself. I have partnered and learnt from some of the best CEO’s and Founders in SaaS globally and wanted to share what I have learnt/continue to learn.
First, I am going to cover some of the formalities ‘What is a VP of Sales’, ‘What are their main objectives’ and ‘what does a founder need to think about before they decide to execute on the hire’. We will then get into some of the meatier stuff on what you can do to hire for a VP sales more effectively.
Understanding the role of a VP Sales
A VP Sales is responsible for developing and executing the sales strategy of a company. They play a pivotal role in driving revenue growth and expanding the customer base. While sales managers focus on day-to-day sales operations, a VP Sales takes a more strategic approach, aligning the sales function with the overall business objectives.
A VP Sales often acts as a bridge between the sales team and the executive leadership of the company. They provide valuable insights and recommendations based on market trends and customer feedback, helping the business make informed decisions to stay competitive in the industry.
The importance of a VP Sales in a start-up
As a start-up founder, you may initially handle sales yourself or delegate the responsibility to other team members. However, as the business gains momentum, it becomes crucial to bring on board someone who can focus solely on sales. A VP Sales brings in the expertise and experience necessary to scale the sales function and drive revenue growth. They can create a structured sales process, build a high-performing sales team, and navigate challenges that arise along the way.
In addition to their sales expertise, a VP Sales in a start-up environment often wears multiple hats, contributing to strategic decision-making, product development, and even marketing efforts. This versatility is essential in a dynamic start-up setting where agility and adaptability are key to success.
Key responsibilities of a VP Sales
A VP Sales has several key responsibilities, including:
- Developing and executing the sales strategy
- Setting sales targets and monitoring performance
- Building and managing the sales team
- Establishing and nurturing relationships with key customers
- Analysing market trends and identifying new opportunities
- Collaborating with other departments to align sales efforts
- Ensuring consistent sales forecasting and reporting
A VP Sales is often tasked with exploring and implementing new sales technologies and tools to streamline processes, enhance productivity, and improve the overall effectiveness of the sales team. By staying abreast of the latest advancements in sales automation and analytics, they can drive innovation within the sales function and stay ahead of the competition.
The challenge for founders
Founders often face two main challenges when it comes to hiring a VP Sales - identifying the right time to make the hire and overcoming the fear of delegation.
Expanding a business and taking it to the next level requires strategic decision-making, especially when it comes to hiring key personnel. One crucial decision that founders often grapple with is determining the optimal time to bring a VP Sales on board. This decision is not just about the financial aspect but also about the strategic impact it can have on the company's growth trajectory.
Identifying the right time to hire a VP Sales
Timing is crucial when hiring a VP Sales. Bringing them on board too early may not justify the cost, while delaying the hire could result in missed opportunities for growth. Founders should consider the stage of the company, the market conditions, and the revenue goals before making the decision. It's essential to strike a balance between having enough resources to support a VP Sales and recognizing when the business can benefit from their expertise.
Moreover, the decision to hire a VP Sales should not be solely based on financial metrics. Founders need to assess the strategic value that a seasoned sales leader can bring to the table. A VP Sales can not only drive revenue growth but also shape the sales strategy, build a high-performing sales team, and open new market opportunities that align with the company's long-term vision.
Overcoming the fear of delegation
As founders, it's natural to be deeply involved in every aspect of the business. However, failing to delegate important responsibilities can hinder the company's growth. Hiring a VP Sales requires founders to let go of some control and trust the newly hired professional to take charge of the sales function. Overcoming the fear of delegation and embracing the expertise of a VP Sales is essential for founders who want to scale their start-up.
Delegating sales responsibilities to a VP Sales not only frees up the founder's time to focus on strategic initiatives but also brings in fresh perspectives and industry best practices that can drive sales effectiveness. It's a transition that demands trust, clear communication, and a shared vision between the founder and the VP Sales to ensure a seamless integration and alignment towards the company's growth objectives.
What should you do?
Once you have decided to pull the trigger and hire your 1st VP Sales and have (at least in theory) come to terms with the idea of delegating the sales to a new sales leader, it’s time to execute. But what should you do/can you do to help you get it right?
Step 1 - Find a qualified objective opinion:
As a SaaS founder your background could be in anything, you might be a product person, Engineering focussed, love marketing, great at plumbing or just someone with a great idea. Granted you have got this far, and you have built your business to a point where you are ready to hire a VP of Sales. None of this however necessarily qualifies you or gives you the skills to hire a VP of sales. It is unlikely that you have hired one before, what interview techniques should be used, where should you look, what questions should you ask, what compensation should you pay, what should their job description look like, how do I build a quota and comms scheme etc etc.
It is therefore critical that you find someone, possibly a strategic board advisor, someone from your VC (be careful here), or (you will like this one) a trusted recruitment partner who knows what they are doing! Either way they should have a small, vested interest in the hire being a successful one and should have the experience of having hired (multiple) VP’s sales who have become huge successes and been massive change agents for their business.
This person/people should be the foundation of everything you do relating to hiring your 1st VP of Sales. Their experience and knowledge is critical to the success of your hire.
Step 2 – Define the Job Description:
At a high level this seems easy – they will sell stuff and hire good people who can sell stuff, but in my experience, this is often one of the biggest mistakes founders make. You should really take time to figure out what your ideal candidate looks like. So many times, I have been asked to find a range of candidates for a process across tenure, age, experience, skills, background etc. So that the founder can figure out, through a ‘feel’ which one will be the right fit. Effectively defining the role and the ideal candidate on the fly. In my experience this is a recipe for disaster.
You need to define – what experience level am I looking for? Do they have previous experience, have they ‘been there, done it and got the T-shirt’ (usually more expensive) or do you want an up and comer who is taking the next logical step.
Next what background are they coming from, is just SaaS good enough or do you want specifically your tech area. Who are they selling to, what problems do they need to solve, what is the sales cycle, average deal size and cadence. Not just now, but where do you want to get to? And so on.
By defining a well thought out, non-generic job description and ideal candidate profile, gives you a tangible ‘objective’ tool to measure candidates against.
Step 3 - What are you willing to pay:
Now you are starting to form an idea of what you want, the question is can you afford it? In my experience. What you want and what you can afford do not typically align, especially for early-stage start-ups. Seek the market data, what do you need to pay. If you can’t afford it then back to the drawing board, what are you willing to sacrifice. Going to market with the mindset of ‘you never know we might find someone’ never works out well and dramatically slows down the hiring process. The odds of landing your dream candidate at 30% below market rate are slim, especially if you want a top performer. Aim high but have a middle and a low version in mind, dependent on budget.
As a high growth start-up, often things like equity can play a big role in securing the right VP of Sales. Sometimes a VP Sales will sacrifice salary and bonus to get a strong equity play. Have this discussion before going to market, can you offer it or not? What sort of level are we talking? Potential 6 figure? 7 figure exits? Knowing this when going to market is important because it can shape the type of candidate you are looking for but can also significantly increase your chances of attracting top talent.
Benefits – typically less important for a VP sales hire in early stage SaaS but knowing what you can offer before you can go to market, again can help attract better talent.
Step 4 – What does success look like & What are they bringing with them:
What do you need from your new VP Sales – Do they need to bring a full sales playbook or do you already have one, do they need a black book of contacts that they can use straight away, do you need them to take you from €1m ARR - €15m ARR. Do you need them to build out a channel programme or do they need to build a team, in which case who can they bring with them? (if they can do this last one, it’s a great sign that they are a good leader and people are willing to follow them). This step links back to step 2 and defining the job description but goes a step further.
Considering this is important and communicating it with the incumbent is even more important because a job description is one thing but a founder’s expectations and measurement of success is another. Despite someone having all of the right skills and background, so often I have seen candidates coming into a new role with a completely different view of what success looks like to that of the CEO.
Step 5 – (My favourite) Choose the right recruitment partner:
It’s obvious why I like this one but ask any successful SaaS founder or CEO and they will tell you that finding a great recruitment partner is game changing for growth. In a high growth business, the leadership team should and will likely be spending 20%+ of their time on hiring related tasks. This is a huge amount of resource and having a partner that can ensure efficiency and ROI on this time can be game changing.
There unfortunately are lots of ‘not so great’ recruiters out there so finding the right partner can be a challenge, if you find it necessary to look beyondsaiyoconsulting.com, then you need to ensure you seek guidance from your network, seek referrals, ‘what agency did a certain hyper growth SaaS business in your sector use’? Ask the recruiter to provide case studies and references to. I would encourage you to interview the recruiter before you work with them, learn how they work, what their experience is and critically how strong their network is in your space.
Your final consideration when choosing a recruitment partner but still an important one should be cost. NOTE: It is not necessary to pay the huge fees associated with the Korn Ferry’s of the world to get a great executive search experience and result.
Now once you have a well-defined Job Description, know exactly what your ideal candidate looks like, have discussed and approved the market aligned salary and package (including equity), defined what success looks like and most importantly found your recruitment partner and route to market. It is now critical to define a great hiring process and identify how you are going to make the final decision.
The interview process for a VP Sales
The interview process for a VP Sales should be rigorous to ensure that the candidates have the necessary experience and capabilities to drive sales growth. It may involve multiple rounds of interviews, including one-on-one interviews, group discussions, and case studies. You should define the interview process and stick to it. Giving a great candidate experience is important and if you are jumping around and constantly changing the process it can create a negative impression. Founders should assess not only the candidates' technical skills but also their leadership qualities, strategic thinking, and cultural fit.
Now cultural fit is a challenging one. Going into the interview process you should take some time to define your ‘current’ company culture and identify some non-negotiables in terms of behaviours and characteristics and candidate needs to demonstrate to be hireable. Hiring against company culture is critical to the success of the candidate, especially at this early stage and at a leadership level.
During the interview process, founders should delve deep into the candidates' past experiences, challenging them with real-life scenarios and assessing their problem-solving abilities. Beyond evaluating their sales acumen, it is crucial to gauge their ability to lead and inspire a team, navigate complex business landscapes, and adapt to the dynamic nature of a start-up environment. Finding a VP Sales who not only meets the technical requirements but also embodies the values and vision of the company is paramount for long-term success.
Should you do an assessment? In my opinion yes. Something along the lines of a 30/60/90 or strategic plan are suitable to understand vision and suitability. Be very careful though! Before you ask someone to come and present to you or your panel, you need to collectively decide what you are looking for and communicate this to the candidate. I know this sound counter intuitive but there are many ways to skin a cat and often a candidate fails on a presentation because of the angle they approached the task, not the content contained within. Take the guess work out of it for the candidate and give them a solid vision on what to deliver, allow them to put their best foot forwards,
Making the right choice
If you have followed all the above steps and defined all the things you are looking for, then making the final decision should be easy. If you are lucky enough to have more than one candidate in the running, ticking all the boxes, then now is the time to take note of the ‘feeling’ part and the ‘instinct’ you feel towards them.
Making the final decision
After assessing all the candidates, founders should make the final decision based on a combination of objective criteria and their own intuition. It's important to trust your instincts and choose a candidate who not only meets the requirements of the role but also aligns with the company's culture and values.
Integrating your new VP Sales
Once the hiring process is complete, founders need to focus on integrating their new VP Sales into the company effectively.
Setting expectations and goals
Clear communication is key when integrating a new VP Sales. Founders should set expectations and clearly define the goals and objectives for the role. Establishing key performance indicators (KPIs) and regular check-ins can help monitor progress and ensure everyone is aligned.
Ensuring a smooth transition
A smooth transition for the new VP Sales involves providing necessary resources, introducing them to the existing team, and giving them time to understand the company's culture and processes. Founders should be proactive in providing support and guidance during the initial stages to help the new VP Sales settle into their role.
So as you can see hiring the first VP Sales is a significant challenge for start-up founders. It involves understanding the role, overcoming common challenges, following a rigorous hiring process, and making the right choice but if you get it right and by effectively integrating the new VP Sales into the organisation, founders can set their start-up up for success in driving revenue growth and achieving their business objectives.
If you are looking for a recruitment partner, objective advisor and market expert to help you with your executive hiring then please get in contact with us athttps://saiyoconsulting.com/contact-us