When Should You Hire a VP of Sales for Your Startup

 

I’m a co-founder/host of a community called Thursday Night Sales and this topic came up in a chat I had with one of our members. 


They told me their company (SMB focused) has a growing sales team that is currently led by the CEO.  They’d tried hiring a Head of Sales, but it turned out to be a bad hire and they had to let that person go.  


They specifically asked: what metrics or discussion points can be presented to the CEO to help shift his thinking and build trust to hire for the VP of Sales position again?

 

Well… it’s complicated.

 

Before you reach that coveted ‘unicorn’ status, there’s a lot of work to be done to drive revenue and growth.  

 

One of the most important takeaways I could ever share that different stages of business require different sales leaders.  As much as we want it to be easy with a one-size-fits-all solution, that’s simply not the case. 

There are 48 different types of VP of Sales, so make sure you choose wisely! 

 

 

Furthermore, the VP of Sales is one of the most important and influential hires a startup will make.  And it also has the potential to be one of the most disastrous if you botch it up (think 7-figure lasting effects).

 

 

“70% of Saas First VP Sales don’t make it to 12 Months. It’s one of the most common, and also most devastating mishires in startups.” – Jason Lemkin

 

So why is a bad sales leadership hire so devastating?  Because that person will touch nearly every aspect of your business and is ultimately responsible for your buyer journey and their experience, which directly affects your bottom line.  Without sales you have no business. 

So, let’s not get there in the first place.  As long as you hire your VP of Sales at the right time to do the right work, with the right people, and the right process (a la an intentional, defined process to make an exceptional hire), repeatable and sustainable growth will follow. 

 

In this article, I’ll run through everything you need to know to hire that VP of Sales at the right time, so you can avoid cleaning up the colossal mess that occurs when the wrong person is hired for this critical role.

 

The Downside of Hiring Too Early

 

The first thing to do is assess your current stage of growth, because it doesn’t make sense to hire a VP of Sales until you’re able to give them the springboard to do what they do best. 

 

Some questions to consider that point to your timing being off:

 

  • Do you understand your market and buyer journey?
  • Do you have customers yet?
  • Is your revenue growing?
  • What does your sales process look like?
  • Do you know why your customers buy, why they stay, and why they leave?
  • What does your Marketing engine look like?
  • Is the product ready (especially for enterprise customers that require customization or integrations)?

 

A general benchmark to aim for is $1-2M in ARR, with a small team already working on selling your product.  

 

Case in point, “If you don’t get the right leadership in place, it’s super costly. And of course, the right leader has to be the right leader for the company at that stage. If you’re zero to $10 million in revenue, you need to hire a builder. You need to hire someone that can actually build the process and the foundation… You don’t need to hire that hot-shot executive, if you will, that has a great brand name. They may not be in the position to roll up their sleeves and do the dirty work that needs to get done in the zero to $10 million stage,” – Doug Landis, Growth Partner, Emergence Capital

 

 

Timing comes up often, this is a great illustration of typical hiring time for a VP of Sales post- startup launch: 

But numbers aren’t the only metric that should drive your decision making.  You’re not ready to hire a VP of Sales until you have a proven, repeatable sales process already in place and can answer the questions above thoughtfully and thoroughly.  

 

Make no mistake, hiring a VP of Sales before you have a sales process in place is like putting an Olympic swimmer in a swimming pool before it’s filled with water.  They can’t do their best work because you haven’t set them up with the tools they need to get the job done.  

 

A true VP of Sales is NOT someone you hire to get sales going at your startup.  It’s someone you hire to accelerate pre-existing sales into the upper echelon of success. 

 

They will recruit and hire A+ sales talent, help the team close bigger and better deals, work well across the organization to avoid the ‘us vs. them’ mentality, understand your buyers to develop sales strategies that allow the team –– and your company –– to flourish in your market.  

 

So, don’t hire a VP of Sales until you’re ready to fund, build, and scale a growing sales team.  

 

If you’re a founder and trying to crack the sales code without brand recognition, this one’s for you.

 

Downsides of Hiring Too Late

 

While the overwhelming majority of startups make the mistake of hiring too early, it’s also possible to miss the mark and bring on a VP of Sales when you’ve gone too far.  

 

In my experience, the problems associated with hiring too late typically stem from Founders trying to run the sales team on their own.  FYI, most of them have no idea what they’re getting into. 

 

Running a successful sales team is a lot of work and takes a ton of experience to nail from the get-go.  

 

Also, when Founders try to run their own sales function it inevitably pulls them away from the rest of their brand and the product.  Imagine what happens when your competitors are continually innovating their products, improving on the benefits they offer their customers, AND have a dedicated sales team digging into the market… 

 

They’re going to amass a sizable advantage over your company by the time you come to your senses.  

 

If you try to manage a sales function without a detailed game plan, it’ll turn into a dysfunctional hornet’s nest of randomness that’ll need to be cleaned up later.  Poor planning and a lack of intentionality when it comes to the buyer journey is the silent killer of many-a-startup.  

 

In short, trying to run a sales function as a Founder leads to:

 

  • Your product suffering in the process
  • Huge time/money cost of an inefficient (or incompetent) sales function
  • Losing ground in the market to companies with similar products and strong sales teams in place. 

 

 Speaking of losing ground in the market… 

 

I recently talked to a Founder who’d promised the board that they’d have a sales leader and team in place by the end of Q3 (we spoke on 9/1/2020).  Now they’re dealing with the repercussions.  They still haven’t made the hire, the board is unhappy, and they’re risking a shaky start to 2021.

 

The company is already 26% behind on their goal and the new team (when they eventually hire them) won’t have enough time to onboard and get up to speed to meet their quota.

 

And on top of all that, hiring late usually leads to making rash decisions that create the prime ecosystem for a mishire.  

 

If you don’t have the right people, in the right roles, doing the right work, think about how it’ll affect your buyers and their experience with your product.  It’s the worst type of boomerang effect. 

 

 

The person you end up hiring will be forced to play catch up and deal with unrealistic expectations, limiting their chance for success.  

 

The Right Time to Hire a VP of Sales

 

Now that we’ve got the bad timing issues out of the way, let’s go over the right time to hire.  

 

Here’s the ideal situation:

 

Once you bring an experienced VP of Sales onto your team, you have to be ready for the growth that’s going to come.  Things can ramp up quickly!  

 

Increasing sales doesn’t mean you can just sit back, relax, and watch your new revenue rise.  

 

Is your product ready to keep up with the increased demand?  Do you have a customer support team ready to look after all your customers?  Are you ready to reinvest that revenue back into the business and intelligently scale to new heights?  

 

Once you hire that all-star VP of Sales you have to be ready to pounce on the fruits of their efforts.  Plan ahead, be diligent, and enjoy the ride!

Before we wrap things up, one last point on the topic… 

 

Ultimately, when you are ready to hire, make sure you hire a VP who believes what you believe.

 

How is your leader going to effectively lead your team and help you grow the business if they’re not intrinsically motivated to help you achieve your mission?

 

Answer: they’re not. At least, not very well.

 

The truth is, people don’t buy what you sell, they buy your mission. And a lot of businesses forget this applies to their sales hires of the future too. But it’s especially important for leaders because they’re the ones who set the tone and culture of an organization.

 

Take it from me — the best salespeople and sales leaders want to believe in what they are selling. Even more so, they want to believe in the business they are building by selling it.

 

Watch this TED Talk from Simon Sinek where he explains how this works: 

 

Wrapping Up

 

When it comes to hiring a VP of Sales, timing is everything. 

Hire too early and you’ll be setting up your new VP for failure –– they won’t be able to leverage their sales experience without a solid foundation in place. 

Hire too late and you can fall behind in your market, rush a bad hiring decision, and create a nightmare of a mess to clean up in the long run.  

 

A great VP of Sales is worth every penny.  


How has the timing of this hire worked out at your startup?  

 

Leave a comment below!