Recently I was talking to a startup that lamented they had hired a VP of Sales too early and wasted a ton of money. It was the typical situation: feel good about the innovative product, have a few customers, then hire the $150k salary plus stock VP of Sales to build the sales and marketing machine. It didn’t work.
The VP of Sales was focused on building out channel relationships with big resellers. The big resellers weren’t interested in reselling because there wasn’t enough market demand yet. After a year it was time for the startup to part ways with the VP of Sales.
Here are some things that should be in place before a startup hires a VP of Sales:
- 10 reference customers
- 5 case studies
- Repeatable customer acquisition process
- Inbound marketing plan
- Two inside sales reps achieving quota
These requirements are hard to achieve and should be owned and managed by one of the founders. With these items in place, a VP of Sales will be able to come in and start scaling out the sales organization.
What else? What other pieces should be in place before a startup hires a VP of Sales?
David Cummings on Startups 
Interesting…As we have 5 VP of sales and spread throughout the US – Atlanta, NYC, Chicago and in London and we wouldn’t be where we are without them. Personally, I prefer seasoned and proven senior sales people that are also willing to get their hands dirty. They represent the brand well and can close big deals and really drive revenue and business insights. Once the market is established and product is refined then we can hire the mentees. I think you pay for what you get.
David, thanks again for the insightful post. Much easier to learn this from you than the hard way, and I appreciate clear benchmarks rather than just high-level theory. I amongst others appreciate the time and insight. Keep it up!
I’m with Dave. All you really identified was a failure in a G2Market plan not a failure in having a VP of Sales early. So it’s a failure of management (who I assume defined the strategy) or – if they deferred to the VP of Sales to define the strategy then it’s his/her failure. This is a case of throwing out the baby with the bathwater (Get rid of the idea of a VP of Sales as these guys executed it poorly)
Justin – I agree with you if the VP of Sales has a successful startup background. The challenge is that most VP of Sales come from bigger companies where the G2Market plan wasn’t implemented by them. The exec then joins a startup that’s not ready and things don’t work out. The G2Market plan should be done by the co-founders, not the externally hired VP of Sales.
Couldn’t agree more! Great advice. I can only add that some recent near misses at some large clients, or logos is key. It means the team is getting close and with some Senior help more should follow.
Hire a VP of Sales with a background in what sales model you want to pursue. Don’t hire a field guy to come build an inside team. Vice-Versa.
I agree with you Dave. Sales needs to stay close the founders. I have seen it go badly wrong when the founders think they can pass to the baton to someone else too soon. I also think that @swagner2 is correct with his point about near misses – it means you are getting close and doing something right!
How do you guide cofounders who stand by the fact that they do not have sales knowledge and have always deferred to sales “experts” or the VP Sales to own?