Hiring a VP of Sales at a startup is challenging. While others have written eloquently about when to hire a VP Sales, I will focus on what type of person to hire. Having run a sales team, worked under a VP Sales and Business Development, hired a VP Sales, and served as an adviser to a VP Sales, I am beginning to see some patterns for success (but I don’t pretend to have all the answers). In one case, I worked with a company that went through five VP Sales plus a handful of interim “consultant” types in a period of four years. While I wasn’t able to get directly involved in the hiring decision until the last hire, I learned a ton in the process. Here are some thoughts on why hiring a VP Sales can be so difficult, and some ideas around how to minimize the hiring risks.
Find a Missionary, Not a Mercenary
Larry Cheng wrote a great post contrasting missionary CEOs to mercenary CEOs. It is obvious that at the CEO level a company requires a missionary leader. Building a company is far too difficult and uncertain a process for a mercenary attitude to sustain one’s motivation. While a missionary CEO is an obvious choice, finding a missionary VP Sales is perhaps more important because the internal expectations at a company are that the VP Sales is a mercenary with little concern for product or people outside sales. As a result, a VP Sales who loves the people (see Cultural Fit below), product and market is great for company morale, particularly when the going (inevitably) gets tough.
Many will argue that having a singularly-motivated mercenary VP Sales is the right choice. I have been involved with companies where VC board members have pounded the table in favor of hiring a senior “sales animal” without regard for other qualities. I’m sure there are companies that have successful sales teams built around this type of person, but I just haven’t seen this strategy succeed. Of course a company needs a smart and aggressive person to build the team and systems required to scale revenue, but while those ingredients are necessary they are not sufficient to create an authentic, resilient and (most importantly) productive sales practice. To make the dough rise, your VP Sales must also be passionate about the people, technology, the market, and the company’s value proposition to customers. This is especially true for companies that are still tweaking their product and value proposition. In these cases, it’s important to have someone who can listen to customers and translate that feedback to the product, marketing, and development teams; in these cases, the sales team is the company’s ears. In earlier-stage companies, this person doesn’t have to be a “VP Sales” – in fact hiring a VP Sales too early is an unfortunately common kiss of death.
In many cases, the CEO/Founder has been leading the business development and sales efforts up until the point at which the VP Sales is hired. The VP Sales is brought in to scale the sales operations (personnel, comp plans, forecasting, systems, etc.) which might already include one or two account managers and someone running business development. Taking the step to scale up sales can lead to a lot of internal strife if the cultural match is off. If the VP Sales’ style is so different from that of the CEO/Founder, the culture can easily splinter into dysfunctional fiefdoms. One thing I’ve found that seems to quickly divide cultures is curiosity, or the lack of it. Founding teams are by nature curious people who enjoy solving problems. It makes sense to hire for this trait in the sales function, too, particularly when your efforts are just taking shape. You will want more of a BD person with technical and market knowledge who can execute a handful of deals with early partners/customers. However, if the BD person is also the person you intend to have scale the sales team, that person must also have experience managing a team and using a data-driven approach (using Salesforce or similar) to build and manage a pipeline, determine conversion rates, etc.
Rolodex and Domain Expertise
If a candidate sells you primarily on their “Rolodex”, chances are they are full of it. The best VCs have senior management or board-level contacts at prospective customers and partners and these VCs can be very helpful in opening doors for you. However, salespeople – even very senior sales people – generally cannot. Unlike someone focused solely on sales, VCs have multi-dimensional relationships with senior managers and board members. In many cases, VCs are providing valuable information or other intangible assistance to these operators – there is an exchange of value. In most cases, senior salespeople do not have the same type of multi-dimensional relationships and thus have fewer levers when calling in favors. While a few career VP Sales have strong relationships that translate into sales, I find that those who boast “extensive Rolodexes” very rarely generate results. Just because a prospect bought something from a VP Sales at her last startup doesn’t mean that the prospect will buy again on relationship alone. Most VP Sales have one or maybe two relationships that can be counted on to generate sales. So, while relationships certainly can be helpful, they should not be relied on – your VP Sales has got to have the leadership, energy and aggression required to open up new markets and secure new clients.
Trust and Judgment
This should be of obvious importance, but will your prospects, customers, and salespeople trust and respect this hire? Will you have faith in his or her judgment and forecasts? Let scuttlebutt inform your due diligence but trust your gut and ask for at least five references to confirm your impressions.
I think the best VP Sales are the ones who aspire to be CEOs. They tend to have a better appreciation for how the sales function fits into marketing, development, professional services, and support. The challenge is to identify these folks earlier in their careers and that’s difficult to do. In many cases, you’ll need to take a risk on someone who may not have “done it before”, but will crush it if you give them a chance. Finding “stage-specialists”, for example those who have repeatedly taken companies from $3-5 million in revenues to $25 million, is difficult although these pros do exist. Basically, you do best by hiring someone who has an ambition to achieve something larger (beyond simply a larger paycheck) and this ties back into finding someone who is a missionary and not a mercenary. This last principle applies across every role in the organization – you want missionaries.
And if You Make a Mistake, Fix it Quickly
Lastly, it’s critical to correct bad decisions quickly. If you have done everything to make a good hiring choice and your VP Sales is not working out, you need to part ways as quickly as possible. This is true for any hire, but given the expense and impact of building a sales organization, it is particularly important. Great sales teams energize and motivate an organization and bad ones poison the pool.