In SaaS start-ups, the most common bad hire is the VP of Sales! - Just Digital - Digital Recruitment for Technology Companies

In SaaS start-ups, the most common bad hire is the VP of Sales!

In SaaS start-ups, the most common bad hire is the VP of Sales!

17th May 2017

In SaaS start-ups, the most common bad hire is the VP of Sales!

It’s a common theme amongst VCs that the first senior sales hires rarely work, and it’s only once the second hire is made that sales really start to ramp up. There are many examples of a VP of Sales not making it beyond the first twelve months which can be incredibly damaging as you lose so much momentum at such a crucial time. It’s even worse if they screw things up along the way, causing internal confusion.

 

One of the biggest problems seems to be the understanding of what the VP of Sales does in their role. Speaking with VCs about this, it seems that CEOs and Founders are expecting the wrong things, which inevitably leads to problems. Expectations aren’t aligned.

 

To understand who you should be hiring, you will need to understand what a great VP of Sales does at a SaaS company.

 

Here are the top 5 things a great VP of Sales does:

 

#1 Recruiting.  20% of their time!  You’re going to need a team to sell.  And recruiting great sales people and making them successful is the #1 most important thing your VP Sales will do.  And a great VP of Sales knows this.  They will either have a great network of foot soldiers to access, or will are constantly on the hunt for the next 2-3 hires. To hit their number, they need the heads and don’t hire in a reactive way. They are one step ahead of the next resignation or firing!

 

#2 Backfilling & Helping Their Sales Team.  Helping the sales team close deals. Working and closing key deals with them. Spotting issues before they blow up. Seeing opportunities ahead of the team. In general, making sure the team, irrespective of size and direct vs. indirect reports works as effectively and efficiently as they can.

 

#3 Sales Tactics.  How to compete! Pitch scripts. Segmenting customers. Optimising how best to work with Demand Gen and Marketing. Getting feature gaps filled with Product and Engineering. In summary, learning and understanding how to maximise the revenue per lead.

 

#4 Sales Strategy. What markets should we expand into? How do we shore-up existing customers? Where should we spend our resources, our money? As your business grows, the emphasis shifts from tactics to strategy, and the reliance for tactical execution shifts to your trusted lieutenants to repeatedly execute core Tactics.

 

#5 Creating and Selling Deals Themselves.  This is last of the Top 5. Important, yes, but it’s the least important of the five key tasks they should be doing. The problem seems to occur when the founder is looking to move away from sales and expects the VP to pick up where they left off, and place a lot of emphasis on the VP achieving a personal quota. To scale up quickly, and achieve great ARR, expecting anything beyond closing a few large deals themselves is unrealistic. The emphasis should be on building the team and infrastructure that allows you to achieve deal volumes.

 

The takeaway here is you shouldn’t hire a VP of Sales until you are ready to scale and build and fund a small, but growing sales team.

 

If the VP of Sales can’t see this themselves, they are most likely a great individual contributor but not the person to lead your sales effort.

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