How to Make Sure You Hire a VP of Sales That Doubles Your Revenue. Not One That Flushes Your Scarce Capital Down the Drain.

1. Jason M. Lemkin
SaaStr
Managing Director, Storm Ventures;
Founder/CEO – EchoSign/Adobe;
@jasonlk
saastr.com & quora.saastr.com
When to Hire (and Fire) Your
First VP of Sales
Or Why Up to 70% of First VP Sales Don’t
Make it 12 Months

2. All about Jason M. Lemkin
2x Founder/CEO Selling to the Enterprise.
Managing Director, Storm Ventures.
 Co-Founder/CEO EchoSign, acquired by Adobe, 3000+ 5-star
reviews on AppExchange
 Grew business from $0-$100m+ ARR in ‘13 at EchoSign + Adobe
 Managing Director at Storm Ventures: First/Early Investor in
Enterprise start-ups, including Marketo, MobileIron, EchoSign,
Appcelerator, etc.
 SaaStr social community – 700k+ views a month on web + Quora

3. The First “VP Sales” Probably Has to Be You
You Have to Sell It Yourself First. And Then Hire 2+ Reps.
You You + 2 Reps Hire VP Sales

4. Ideally, Have 2 Reps Doing Well Before Hire VPS
 Otherwise, You Won’t Know Yourself
 Don’t Want to Hire a VPS Too Early
• Too Expensive, Too Confusing
• You’ll Hire Wrong Type of VPS
 A/B Test Will Also Help You Learn

5. Top 5 Things a SaaS VP of Sales Really Does
Note Which One Comes Last
 #1 Recruiting the Team
• You’re going to need a team, and a good one. Quickly.
• Player-Coach sounds great -- but at best, will be quickly obsolete as a role.
 #2 Backfilling and Helping His/Her Sales Team
 #3 Sales Tactics
 #4 Sales Strategy
 #5 Creating and Selling Deals Him/Herself

6. When to Make The Hire
Immediately - Once you Have a Repeatable Process
 Before a repeatable process = exercise in frustration
 But just as importantly – if you wait even one month
after you have Initial Traction – you are wasting time
 Wasted time = wasted leads & lost 2nd
order revenue,
delay in getting to Scale

7. Change Your Thinking: A Great VPS is Accretive
 A mediocre VPS is a cost
center. Feels very expensive.
 But a Great VPS is Accretive
 Key: Great VPS Raises
Revenue Per Lead
Source: Boston Search Group 2011
http://bit.ly/v2Sbgi

8. Ways Your VPS Will Increase Revenue Per Lead
 Ask. For the Most $$$ Per Lead.
 Close. Closing is an Art – and a Science.
 Hire. Better Than You.
 Scale. More Reps Than You, More Quickly.
 Position. Give Prospects Right Context.
 Go Upmarket. Drive to Highest Practical Deal Size
 Better. Great VPS Makes Your Product Better.
 Fun. Great VPS Makes It Fun.

9. The Toughest Hire of All in SaaS
 When
• Too Early: Manager, Not a Magician
• Too Late: Can Take 20 Months!
 Who
• Been There, Done That – Almost Impossible
• Too “Heavy” a Hire? Or One Without the
Full Experience?
 Why
• To Take Things To the Next Level; To Scale
• But Usually NOT to Get Sales Going

10. The Toughest Hire of All in SaaS
Hire Wrong, and You’re Set Back a Year
 A Bad Hire Can Be Far Worse Than No Hire at All – It’s True
 A Bad Hire Isn’t Just Hard Costs – It Involves Huge Soft Costs As Well
• A B-level VP Sales Hires a B-/C+ Team Under Him/Her
• Revenue Per Lead can actually go down dramatically under a mediocre VPS
• Wastes Precious Leads, Wastes Time, Loss of Second-Order Revenue
• You’ll Lose a Year – At the Worst Possible Time
 A Bad Hire is Often Made Just as Things Are Taking Off
• So Most Costly Time at All to Make a Mistake

11. The Toughest Hire of All in SaaS
My Year of Hell. But Then – Right VP Sales -> Reignition.

12. The Costs of a Bad Hire
 Leads Doubled in Year of Hell
 Yes, We Grew. But, Revenue
Per Lead Declined.
 Whose Fault?

13. Your VPS is Also Feeding Second-Order Revenue
Wrong Hire = No Second Order Revenue, Not Just Suboptimal Sales That Year

14. How My (Real) VP Sales Doubled Sales in 90 Days
Hint: It Wasn’t New Prospects or Customers.
 Immediately Upgraded the Team to Proven Closers. The First
Week.
 Got the Most Out of the Team He Inherited – And Got Rid of the
Ones That Weren’t Working.
• 1 + 2 alone Doubled Our Revenue Per Lead.
 He Didn’t Even Attempt to Do It Alone.
 He Ended Pipeline as a Metric – And Any Real Credit for It.
 He Embraced Competition.

15. Different Stages of VPS. Often, a Different Hire.
 Hard to Get Stage Perfectly
Right in Early Days
 Few Truly Scale Across > 1.5
Stages. Hence, Most SaaS
Cos. End Up with Multiple VPS

16. Key Screening for VPS
 Sold at Next Year’s Target ACV – Controls
for a Lot of Variables
 Sold at Next Revenue Stage (ARR)
 Similar Competitive Selling Background
 Outbound vs. Inbound Ratio
 First 3 People You’d Bring With You
 Less Important: Domain Expertise

17. How to Know If You’ve Made a Mistake
 You Should Know Subjectively In Just a Few
Months – Just 50% of The Way Through
Your Average Sales Cycle
 Numbers Should Increase in 1 Sales Cycle –
with Keen Focus on Revenue Per Lead
 First Few Hires Should be Clear Upgrades –
and made quickly + seemingly effortlessly

18. So As Hard As It Is – You Can’t Settle
 It May Be Tempting to Hire a Placeholder
VPS – especially if You Haven’t Done It
Before
 But You’ll End Up With a Crummy Team, and
Lost Opportunities.
 Start Early. Start Now.

19. When It’s Good – It’s Really Good
 Great Sales Teams Have Low Turnover –
They Want to Stay Together
 Great Sales Teams Feed on Themselves
 Great Sales Teams Energize the Rest of the
Company
 You Just Need a Great VPS

20. Q&A