Dear SaaStr: What Are The Best Questions to Ask a VP of Sales During an Interview?

And does paying more get folks to stay?

Dear SaaStr: What Are The Best Questions to Ask a VP of Sales During an Interview?

First, don’t hire a VP Sales as your first sales hire. You're not ready. Instead, hire 1-2 experienced individual reps first, manage them yourself, and learn how sales should work in your company. Then, hire a VP Sales to manage those guys and scale from there. More here: When You Hire Your First Sales Rep -- Just Make Sure You Hire Two and here: What a Great VP Sales Actually Does. Where The Magic Is. And When to Hire One.

When you have 2 reps hitting quota, then you’re ready for your first VP of Sales.

Here are 10 good screening questions to see if you have a real VP, Sales in hand -- or not -- for a SaaS start-up post-traction but < $10m ARR or so. These questions mostly don't have right or wrong answers, but will help you determine the quality and fit of the candidates:

1. How big a team do you think we need right now, given what you know? (If he/she can't answer --- right or wrong -- pass).

2. What deal sizes have you sold to, on average and range? (If it's not a similar fit to you, pass. If he/she can't answer fluidly, pass).

3. Tell me about the teams you've directly managed, and how you built them. (If he/she can't describe how they built a team -- pass).

4. What sales tools have you used and what works for you? What hasn't worked well? (If they don't understand sales tools, they aren't a real VP Sales).

5. Who do you know right now that would join you on our sales team? (All good candidates should have a few in mind). Tell me about them, by background if not name.

6. How should sales and client success/management work together? (This will ferret out how well he/she understands the true customer lifecycle).

7. Tell me about deals you've lost to competitors. What's going to be key in our space about winning vs. competitors?

8. How do you deal with FUD in the marketplace? (This will ferret out if they know how to compete -- or not).

9. Do you work with sales engineers? If so, what role do they need to play at this stage when capital is finite? (This will ferret out if he/she can play at an early-stage SaaS start-up successfully -- and if he knows how to scale once you scale).

10. What will my revenues look like 120 days after I hire you? (Have him/her explain to you what will happen. There's no correct answer. But there are many wrong answers).

ok let's make it 11 actually:

11. How should sales and marketing work together at our phase? (This will ferret out if he understands lead generation and how to work a lead funnel. Believe it or not, most candidates don't understand this unless they were really a VP Sales before).

Dear SaaStr: Does paying higher salaries increase employee retention?

Yes, if their salaries are unfair, unequal, or below market. Otherwise — maybe not.

Here’s what I’ve learned across 3 startups of my own, and investing in 25+ more:

• Underpaying certainly leads to departures. Employees that are underpaid get bitter and leave. Don’t let it go. Review salaries quarterly, not just annually. And especially, don’t take advantage of those that do well but don’t complain. Eventually, they’ll leave to if they don’t feel treated fairly.

• Moderate overpaying does not appear to create any stronger retention. Folks seem to just acclimate to it.

• Year-end and time-based bonuses lead to some retention, but maybe not the right kind. Sales folks in particular will stay until a big bonus check. But I’ve found non-sales folks will leave even days before a bonus and don’t care.

• Massive overpaying increases retention of the so-so and mediocre. They don’t leave at BigCos when they are paid 2x or more what they could get elsewhere.

• Stock option vesting schedules do increase retention, but sometimes in unpredictable ways. Employees will quit on their 1-year vesting date in many cases if they aren’t bonded to the opportunity. A modest benefit here. They’ll also leave as they become 100% vested, even if staying makes a lot more sense given the potential outcome. Folks just don’t act totally rationally around vesting schedules. They don’t fully get it.

So IMHE at least, spend a ton of time making sure folks are paid fairly. And equally. Assume everyone else knows everyone else’s comp. And get extra options and equity to those that move the needle.

But overpaying doesn’t seem to help much at all.

A bit more here.

And see EVERYONE at the 8th SaaStr Annual in SF Bay Area on Sep 13-15!!

SaaStr is turning 10, and it’s our 8th SaaStr Annual. 10,000 SaaS founders, VCs and execs all sharing together, how to scale!