Hiring A Vice President of Sales for Your Early Stage Company

I truly enjoy playing a sales role with tech start-ups and keeping abreast of innovation, new ideas, participating in the disruption of nonproductive business practices, and adding good twists on old themes.  When opportunities present themselves for me to have discussions with early stage entrepreneurs, often the conversation turns to the important question, when’s the best time to hire a Vice President of Sales – that person who, within a few days of being on-board,  will instantly take their company to the next level financially. Words like “magic” and a “sales rock star” start to creep into our conversation and eyes light-up with excitement and anticipation. I can almost see their thoughts – visions of signed contracts, so many they’ll need new office space within a couple of weeks!

My first reaction during these conversations is to try and remove the words “magic” and “rock star” from their thinking, job postings, vocabulary, mental images, and their evaluation criteria of the sales talent.

It’s only my opinion, but neither of these descriptions of a sales professional, nor similar terms, fit what a good VP of Sales delivers. If images of “magic” and “rock stars” form the basis for making a hiring decision, it’s very likely the best candidate will be missed completely: that candidate who would help an early stage company grow its business quickly and consistently. Unfortunately, I’ve seen great sales talent literally forced out of a company by managers with these mental images. Stop it!

Of course all of us want excellent and consistent sales performance, but these old images of sales professionals bring up stereotypes of sales as a slick profession where the buyer is often coerced into making a quick purchase that’s not necessarily in the buyer’s best interest. In today’s world of rapid social communications, burned buyers often get the last laugh! A good sales process can seem magical but I can assure you it takes knowledge, hard work, planning, and persistence to consistently create that “magic”. If a magic “sales wand” existed, every business owner would have one or two.

I’ve successfully worked as VP of Sales and Business Development for early stage tech enterprises in Silicon Valley and for companies in the $300mm range. As a start-up VP of Sales, I’ve sold enterprise, SaaS, and PaaS, solutions to Fortune 50 clients so I come at this issue with a practical and experienced point of view.

A Few Insights

First, I think it’s important for the CEO (founders) of the company to have made, or have seriously attempted to make, a few sales before their new VP of Sales is hired. Those having gone through a significant sales effort typically remove the terms “magic” and “rock star” from their vocabularies and expectations. Selling by the founders needs to go beyond the warm introductions made by Board members or sales to their friends and family. In my opinion, the founders need to dive into what they might see as the murky and turbulent waters of new business development and win or lose a deal or two. A loss is not a disaster!

Second, the founders need to understand the model they used – whether they were successful or not. The point is not for them to create a sales process that’s etched in stone but rather to gain insights about how potential buyers react to them and their proposition. What objections did they encounter? Where is the buying hesitation? Will they actually buy my product within my lifetime? It might not be elegant, or pretty, or perfect, but this knowledge is valuable. This knowledge might even shape the future selling systems and processes used by the sales team. Oh, I suggest the founders not select their best potential or “must win” clients to practice their early selling!

Third, usually after winning or losing a few opportunities, the founders and the initial team of hunters come to the conclusion they would prefer to do their own jobs and hire a professional to drive sales. This is often the point when hiring a VP of Sales really begins to take shape.

So What Do You Look For In Your Vice President of Sales?

One note of caution before we continue. From a compensation stand point, be certain your product or service is complete enough for your new VP to achieve their on-target goals. Since much of the compensation for a Sales VP is typically tied to sales performance, and incomplete products typically sell for less money, it’s important for you and your new VP to understand the financial implications. If you find a great candidate and they’re willing to take the risk with you then you probably have a good fit. Also, if your funding is not completely in place, be upfront about it. Many experienced VP’s will work for a salary if they are given an equity stake or a lucrative bonus structure. It’s worth considering making these offers to an excellent candidate. They will more than repay your investments and will be very motivated to deliver.

Different Kinds Of VP’s?

There are different kinds of Vice President’s of Sales. Some of my VP of Sales friends work at very large companies and others for early stage ventures. Some VP’s of Sales at large companies have very few face-to-face customer interactions. Most are very numbers driven and are deeply concerned with margin variance, territory analytics, and the profitability of forecasts. Some work with sales CRM systems and then export data into spreadsheets the size of Texas!

I’m not saying analytical skills are not needed! I’m just saying, if you’re the CEO of an early stage company please be aware of the specific needs for your enterprise. Just because a VP comes from a large well respected company, or is well known, doesn’t mean that person is the perfect fit for your venture. For startups, the VP of Sales is often the only sales professional and needs to be able to deliver the entire sales cycle.

From creating a sales process, defining the sales targets, prospecting, pipeline building, qualifying, presenting, dealing with prospect objections, input on the creation of sales collateral materials, getting signed contracts, and forecasting, your first sales VP needs to demonstrate sales and process management skills and solid cross corporate communications.

The Experience Factor

Often times there’s a debate between hiring a VP of Sales with deep industry background or a younger candidate. My experience is, especially for early stage companies, people wear many professional hats. A VP of  Sales  for a startup tech company for instance, needs to understand how to collaborate with marketing, communicate with project/product management teams, understand market research, leverage marketing efforts, communicate with engineers, understand legal and contracts, participated in pricing strategies, communicate with the Board of Advisors and Directors as needed, be aware of business development opportunities, implement a sales CRM system, communicate with finance on deal structures, motivate salespeople if they have them, create a vision for the team, create sales plans, perhaps participate in fund raising activities, and many other responsibilities.

They may also be the sole sales person in place until they can grow their sales organization. For startups I’m more inclined to towards experience when it comes to the first VP of Sales hire – someone with broad business experience and insights, who loves a rapid pace, and isn’t easily dissuaded by uncertainty and the occasional calamity. And since there are usually very limited human resources to support administrative functions, the VP of Sales needs to be self-reliant on a variety of fronts.

Ideally your first VP of Sales should have solid sales experience. During an interview situation they should be reasonably able to reply to you regarding your selling proposition. They should also be able to present you with couple of twists that you may not have considered when it comes to selling your product or service. I’d very strongly urge you to consider candidates who have had formal sales training from a recognized sales training organization. Have them explain their personal selling system and why it will work for your company. An experienced VP of Sales should be able to create a very simple go forward “sales plan” after their initial interview.

MBA Imperative?

If you require an MBA that’s fine but I’ll tell you, the most successful VP’s of Sales I’ve ever met had bachelor’s degrees, several formal sales training courses, years of sales experience, and progressively challenging management roles. These are Fortune 1000 and startup VP’s. I’m not aware of any MBA program that offers salesmanship training that’s as detailed and focused as the training offered by the most reputable sales training organizations.

That’s my two cents worth! I hope this edition of SalesReminder helps you grow your venture!

 

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