SaaStr at Salesforce's Dreamforce '13: "How to Hire (And Fire) Your First VP of Sales"

SaaStr at Salesforce's Dreamforce '13: "How to Hire (And Fire) Your First VP of Sales"

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  When to Hire(and Fire) Your First VP of Sales Or Why Up to 70% of First VP Sales Don’t Make it 12 Months Jason M. Lemkin, Managing Director, Storm Ventures; Past Founder/CEO – EchoSign / VP Web Business Services – Adobe @jasonlk
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  Safe harbor Safe harborstatement under the Private Securities Litigation Reform Act of 1995: This presentation may contain forward-looking statements that involve risks, uncertainties, and assumptions. If any such uncertainties materialize or if any of the assumptions proves incorrect, the results of salesforce.com, inc. could differ materially from the results expressed or implied by the forward-looking statements we make. All statements other than statements of historical fact could be deemed forward-looking, including any projections of product or service availability, subscriber growth, earnings, revenues, or other financial items and any statements regarding strategies or plans of management for future operations, statements of belief, any statements concerning new, planned, or upgraded services or technology developments and customer contracts or use of our services. The risks and uncertainties referred to above include – but are not limited to – risks associated with developing and delivering new functionality for our service, new products and services, our new business model, our past operating losses, possible fluctuations in our operating results and rate of growth, interruptions or delays in our Web hosting, breach of our security measures, the outcome of any litigation, risks associated with completed and any possible mergers and acquisitions, the immature market in which we operate, our relatively limited operating history, our ability to expand, retain, and motivate our employees and manage our growth, new releases of our service and successful customer deployment, our limited history reselling non-salesforce.com products, and utilization and selling to larger enterprise customers. Further information on potential factors that could affect the financial results of salesforce.com, inc. is included in our annual report on Form 10-K for the most recent fiscal year and in our quarterly report on Form 10-Q for the most recent fiscal quarter. These documents and others containing important disclosures are available on the SEC Filings section of the Investor Information section of our Web site. Any unreleased services or features referenced in this or other presentations, press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase our services should make the purchase decisions based upon features that are currently available. Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements.
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  Jason M. Lemkin JasonM. Lemkin, Managing Director, Storm Ventures; Founder/CEO – EchoSign/Adobe; SaaStr @jasonlk
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  Jason M. Lemkin JasonM. Lemkin, Managing Director, Storm Ventures; Founder/CEO – EchoSign/Adobe; SaaStr @jasonlk
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  The First “VPSales” Probably Has to Be You You Have to Sell It Yourself First. And Then Hire 2+ Reps. You You + 2 Reps Hire VP Sales
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  Top 5 Thingsa SaaS VP of Sales Really Does Note Which One Comes Last  #1 Recruiting the Team • You’re going to need a team, and a good one. Quickly. • Player-Coach sounds great -- but at best, will be quickly obsolete as a role.  #2 Backfilling and Helping His/Her Sales Team  #3 Sales Tactics  #4 Sales Strategy  #5 Creating and Selling Deals Him/Herself
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  When to MakeThe Hire Immediately - Once you Have a Repeatable Process  Before a repeatable process = exercise in frustration  But just as importantly – if you wait even one month after you have Initial Traction – you are wasting time  Wasted time = wasted leads & lost 2nd order revenue, delay in getting to Scale
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  Change Your Thinking:A Great VPS is Accretive  A mediocre VPS is a cost center. Feels very expensive.  But a Great VPS is Accretive  Key: Great VPS Raises Revenue Per Lead Source: Boston Search Group 2011 http://bit.ly/v2Sbgi
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  Ways Your VPSWill Increase Revenue Per Lead  Ask. For the Most $$$ Per Lead.  Close. Closing is an Art – and a Science.  Hire. Better Than You.  Scale. More Reps Than You, More Quickly.  Position. Give Prospects Right Context.  Go Upmarket. Drive to Highest Practical Deal Size  Better. Great VPS Makes Your Product Better.  Fun. Great VPS Makes It Fun.
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  The Toughest Hireof All in SaaS  When • Too Early: Manager, Not a Magician • Too Late: Can Take 20 Months!  Who • Been There, Done That – Almost Impossible • Too “Heavy” a Hire? Or One Without the Full Experience?  Why • To Take Things To the Next Level; To Scale • But Usually NOT to Get Sales Going
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  The Toughest Hireof All in SaaS Hire Wrong, and You’re Set Back a Year  A Bad Hire Can Be Far Worse Than No Hire at All – It’s True  A Bad Hire Isn’t Just Hard Costs – It Involves Huge Soft Costs As Well • A B-level VP Sales Hires a B-/C+ Team Under Him/Her • Revenue Per Lead can actually go down dramatically under a mediocre VPS • Wastes Precious Leads, Wastes Time, Loss of Second-Order Revenue • You’ll Lose a Year – At the Worst Possible Time  A Bad Hire is Often Made Just as Things Are Taking Off • So Most Costly Time at All to Make a Mistake
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  The Toughest Hireof All in SaaS My Year of Hell. But Then – Right VP Sales -> Reignition.
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  The Costs ofa Bad Hire  Leads Doubled in Year of Hell  Yes, We Grew. But, Revenue Per Lead Declined.  Whose Fault?
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  Your VPS isAlso Feeding Second-Order Revenue Wrong Hire = No Second Order Revenue, Not Just Suboptimal Sales That Year
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  How My (Real)VP Sales Doubled Sales in 90 Days Hint: It Wasn’t New Prospects or Customers.  Immediately Upgraded the Team to Proven Closers. The First Week.  Got the Most Out of the Team He Inherited – And Got Rid of the Ones That Weren’t Working. • 1 + 2 alone Doubled Our Revenue Per Lead.  He Didn’t Even Attempt to Do It Alone.  He Ended Pipeline as a Metric – And Any Real Credit for It.  He Embraced Competition.
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  Different Stages ofVPS. Often, a Different Hire.  Hard to Get Stage Perfectly Right in Early Days  Few Truly Scale Across > 1.5 Stages. Hence, Most SaaS Cos. End Up with Multiple VPS
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  Key Screening forVPS  Sold at Next Year’s Target ACV – Controls for a Lot of Variables  Sold at Next Revenue Stage (ARR)  Similar Competitive Selling Background  Outbound vs. Inbound Ratio  First 3 People You’d Bring With You  Less Important: Domain Expertise
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  How to KnowIf You’ve Made a Mistake  You Should Know Subjectively In Just a Few Months – Just 50% of The Way Through Your Average Sales Cycle  Numbers Should Increase in 1 Sales Cycle – with Keen Focus on Revenue Per Lead  First Few Hires Should be Clear Upgrades – and made quickly + seemingly effortlessly
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  So As HardAs It Is – You Can’t Settle  It May Be Tempting to Hire a Placeholder VPS – especially if You Haven’t Done It Before  But You’ll End Up With a Crummy Team, and Lost Opportunities.  Start Early. Start Now.
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  When It’s Good– It’s Really Good  Great Sales Teams Have Low Turnover – They Want to Stay Together  Great Sales Teams Feed on Themselves  Great Sales Teams Energize the Rest of the Company  You Just Need a Great VPS
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  All about JasonM. Lemkin 2x Founder/CEO Selling to the Enterprise. Managing Director, Storm Ventures.  Co-Founder/CEO EchoSign, acquired by Adobe, 2000+ 5-star reviews on AppExchange  Grew business from $0-$100m+ ARR in ‘13 at EchoSign + Adobe  Managing Director at Storm Ventures: First/Early Investor in Enterprise start-ups, including Marketo, MobileIron, EchoSign, Appcelerator, etc.  SaaStr social community – 400k+ views a month on web + Quora