How to Hire a Great VP Sales '14: From NY Enterprise Tech Meet-up

21,107 views

Published on

How to Make Sure You Hire a VP of Sales That Doubles Your Revenue. Not One That Flushes Your Scarce Capital Down the Drain.

Published in: Business

How to Hire a Great VP Sales '14: From NY Enterprise Tech Meet-up

  1. 1. Jason M. Lemkin SaaStr Managing Director, Storm Ventures; Founder/CEO – EchoSign/Adobe; @jasonlk saastr.com & quora.saastr.com 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
  2. 2. All about Jason M. Lemkin 2x Founder/CEO Selling to the Enterprise. Managing Director, Storm Ventures.  Co-Founder/CEO EchoSign, acquired by Adobe, 3000+ 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 – 700k+ views a month on web + Quora
  3. 3. The First “VP Sales” Probably Has to Be You You Have to Sell It Yourself First. And Then Hire 2+ Reps. You You + 2 Reps Hire VP Sales
  4. 4. Ideally, Have 2 Reps Doing Well Before Hire VPS  Otherwise, You Won’t Know Yourself  Don’t Want to Hire a VPS Too Early • Too Expensive, Too Confusing • You’ll Hire Wrong Type of VPS  A/B Test Will Also Help You Learn
  5. 5. Top 5 Things a 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
  6. 6. When to Make The 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
  7. 7. 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
  8. 8. Ways Your VPS Will 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.
  9. 9. The Toughest Hire of 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
  10. 10. The Toughest Hire of 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
  11. 11. The Toughest Hire of All in SaaS My Year of Hell. But Then – Right VP Sales -> Reignition.
  12. 12. The Costs of a Bad Hire  Leads Doubled in Year of Hell  Yes, We Grew. But, Revenue Per Lead Declined.  Whose Fault?
  13. 13. Your VPS is Also Feeding Second-Order Revenue Wrong Hire = No Second Order Revenue, Not Just Suboptimal Sales That Year
  14. 14. 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.
  15. 15. Different Stages of VPS. 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
  16. 16. Key Screening for VPS  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
  17. 17. How to Know If 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
  18. 18. So As Hard As 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.
  19. 19. 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
  20. 20. Q&A

×