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When is is right to hire your first VP Sales?
Why it's best to cool your boots when it comes to deciding to hire a sales leader.
I met a founder with a pre-revenue SaaS product the other day who is struggling to raise funding. He said that he has a lot of interest from VCs, but they’ve all said “call us once you get your first customer”. The trouble is, he hasn’t got a paying customer yet. He’s a technical founder and so his question to me was “should I go and hire a VP Sales?”.
The logic is that if you’ve worked out what’s not working (in this case: sales) then you need to pay to fix it (find a sales leader). A bit like if your car stopped working, you’d pay a garage to fix it. His reservation wasn’t whether the time was right, but more whether he could find the money to pay someone.
I solved his prevarication by explaining that even if he had the funding already, it was absolutely not the time to hire a sales leader and he should put that idea right out of his head now.
Putting aside the fact that the ‘call us when you have a paying customer’ excuse may just be an easier way for VCs to close down the discussion for a business they’re not interested in, here are the reasons I gave him for not hiring a sales leader yet:
1. He probably has a pretty awesome sales person already
He’s the CTO but he spoke about his product with passion and enthusiasm. He was totally brilliant at selling the product and would kick the a** of any seasoned sales person if he was put in front of a qualified lead. Most founders are the same: they eat, sleep and breathe the product because it’s their baby. Founders need to sell the product to begin with because at this stage, the most valuable thing (more valuable than revenue) is real insight into your customers and the problems they are looking to solve. There’s nothing like asking someone to part with cold, hard cash to getting a sense of what resonates and what doesn’t.
2. The sales leader’s role doesn’t exist yet
Your sales leader is really there to build and coach a sales team, not figure out your Go To Market. What they need is your sales playbook that they can go and execute. But how can you give them the playbook if you haven’t figured it out yet? You need to do that first.
3. You could spend time and $$$s going down a rabbit hole
If you don’t have a fully formed playbook yet and you just want your VP Sales to go off and ‘make sales’, she or he will do whatever it takes to make sales. They don’t know who you are really selling to or how so they’ll just make it up as they go along. The trouble with that is that they may end up spending a lot of time not really selling, or they get customers that aren’t going to get proper value from the product and end up churning. Either way you’ve spent a lot of time and money doing the wrong thing and learning nothing. Remember, insight is more valuable than revenue at this stage.
So when is it right to hire a VP Sales? I would hire a few Account Execs first. And I would do this once you are at about $50k-$100k/month, but not before. A founder should be responsible for managing them and setting their targets etc. Assuming you’ve found Product Market Fit and you have a playbook figured out, it’s probably time to start thinking about a Sales Leader once you can start to see a consistency in lead generation and conversion. But don’t rush into it. It’s a cliché that every SaaS business gets its first VP Sales hire disastrously wrong. But if you rush out and hire the first senior sales person you like, you might find yourself hiring the wrong person.
Sales Coaching Guru, Seth DeHart (no, he’s not obliquely related to me) has a contrarian view that I quite like: Before you hire a VP or even an AE, hire a ‘Sales Pioneer’. A Sales Pioneer is more at the AE level, but is exceptional and ambitious. The idea is that you, as a founder, set the hypotheses you’re looking to test and the Sales Pioneer helps you rapidly test them. For the third time in this article ‘knowledge is more valuable than sales at this stage’, so the Sales Pioneer’s main job is to help you get that knowledge faster.
From here you can start to build out the playbooks that you need.
For a better explanation and a deeper dive, check out Seth’s article here about hiring a Sales Pioneer.