What are the top 10 mistakes founders are still making today when hiring their VP of Sales? SaaStr CEO and Founder, Jason Lemkin, has done numerous surveys now that confirm that a startling 70% of first VPS hires still don’t make it.
In this post, we’ll delve into the common pitfalls founders encounter when hiring a VP of Sales. Reflecting on twelve years of SaaStr’s hiring lessons, we’ll take a deep dive into Jason’s critical insights into why sales leaders fail and how founders can avoid these mistakes. The discussion will cover the importance of due diligence, understanding the product, embracing sales involvement post-hire, and recognizing the signs of jaded or broken candidates. Use this practical advice to ensure your next critical hire drives success.
#1: You Can’t Stay Founder-Led Sales Forever.
This one is newer. Being in founder mode doesn’t work for sales. Elements of it do, but you need a sales team to scale sales. Once you do make your first sales hire, the biggest mistake you can make is exiting sales. Maybe you’re tired, and you’ve been doing founder-led sales for some time. But you can’t leave, or sales will go down the toilet.
You have to spend as much time in sales after hiring a VP of Sales as you did before. You become a great middler, and they pull you into ten deals every month, but you don’t get that time back.
Another new trend is people reverting to founder-led sales because of mishires and getting burned. When you get big, it’s too much. You can do it for a month or a quarter, but you need to start recruiting the next day or week when it doesn’t work out.
Too much human capital is required, and sales have no efficiencies whatsoever. You will need to hire headcount infinitely and linearly with revenue. So, by $2M in ARR, you need to hire your first Head of Sales. If it doesn’t work out, hire another. Don’t stay in founder-led sales.
#2: You Can’t Hire the Jaded, the Broken, and the Done.
Over the last four years, so much change has happened, leaving us with many jaded, broken, and done people. They need a job, and their side hustle as a fractional CRO didn’t work out, but should you hire them? Many great companies are out there turning over VPs of Sales, but you have to be careful.
Don’t hire the jaded. Four minutes into an interview, they’ll say how the CEO or VC screwed them over, or the startup didn’t make it, and it wasn’t their fault. Don’t hire these people. Maybe you raised $500M and sold for $50M, and they claim to have crushed it single-handedly. No one makes any money in that scenario. You don’t get participation points in SaaS.
The related cousins are the broken and the done. They don’t want to sell anymore. Yes, they can make beautiful powerpoints, endlessly discuss process, and they might have done great things in their career, but do they want to sell? You have to ask them, “What do you want to do the first two weeks on the job?” If it’s not about meeting customers, don’t hire them.
#3: You Can’t Hire a VP of Sales that Won’t Do Sales Themselves.
80% of the VP of Sales candidates founders invest in and work with won’t do sales themselves. When making the hire, you have to listen. Just because they talk about how great they were at Datadog doesn’t mean they’ll do it themselves.
Once you’re at $200M ARR, they can get out of deals a little, but maybe not. A classic story is when Groupon was a customer at AdobeSign/EchoSign. Jason flew to Chicago in the middle of a terrible winter to pitch a 7-figure deal. And next door, Salesforce CEO Marc Benioff was making his own pitch.
He’s still doing it. Every year he meets with 200 prospects. We can’t all fly in our private jets, but the point is, even at $200M ARR, you still have to meet customers. Marc is doing it, and Salesforce is coming up on $30B.
#4: You Can’t Hire a VP of Sales that Can’t Be a Product Expert.
You might have hired a great “people person” as your VP of Sales, but if they’re not an expert on your product, it won’t work. Before you make the hire, do reference checks and have them do a demo. If you hire without them knowing the product, they likely never will.
It’s a tough market; if you can’t answer customer questions, the competition will. Every year, we become smarter buyers up and down the stack, so you can’t hire a VP of Sales who isn’t willing to learn the product cold before starting.
If they’re great, give them the offer, agree on the comp and equity, and give them a month to learn the product before they start. They can’t start learning the product on day one.
#5: You Can’t Hire a VP of Sales You Don’t 100% Believe In.
This seems obvious and might be the most important point on this list. If you don’t believe in your heart and soul that a candidate will be successful, it won’t work. When Jason hired Brendon Cassidy, the first Head of Sales at LinkedIn, a VC wanted someone more senior. But he knew 100% he was the guy.
Your job as a leader isn’t to tell the VP of Sales what to do but to backfill them. Not everyone can be great at everything, but if you 100% believe in them, and they need you in Chicago in the middle of winter, you go.
You don’t need to be 100% right. You just need to love them no matter what anyone else says.
#6: The “Full Stack” AE is Almost a Myth, and Probably the VP of Sales.
This might seem minor, but the mythical full-stack salesperson has cropped up more over the last couple of years. They exist, but finding someone who can do and own outbound, qualification, training, onboarding, and closing everything is rare.
We want this when a sales team is waiting around for an inbound lead, but it’s not a thing unless you’ve bred them to be this way from the beginning. Folks who haven’t done outbound, technical partnerships, and in-person can’t learn to do it on your dime unless you train them from day zero.
Are you curious if your potential VP of Sales can handle the full stack? Ask them. If outbound isn’t part of your model and it’s 100% inbound, you probably don’t want to hire an outbound expert today. If you love this Head of Sales who has never done inbound, there’s a 0% chance of success.
Don’t expect VPs of Sales to do these things. If you know you need them, ask if they’ve done it before, but don’t assume they’ll do all of it. Most won’t, haven’t, or don’t want to.
#7: A VP of Sales Mishire Sets You Back A Year.
This one is brutal, and it hasn’t changed over time. If you mishire, and they’ve never done channel sales, outbound, or sold to a technical buyer in your industry, it’ll set you back a year. Why?
When you make a true mishire, sales always go down, especially if you disappear after making the hire. You’re handing sales off to someone who doesn’t know the product, who then hires more people who don’t know the product.
You’ll know if you’ve made a mishire after a month. Read more about giving them only 30 days here. Say you hire Jim. He’s pretty good, and the board likes him, but he isn’t cutting it. You give him another quarter and try to let him go 6-7 months in, but Jim changed your mind because he’s a good sales guy. Finally, you move on and have another six months of searching.
You can avoid this story. When you’re tired and have honestly interviewed 30 candidates, push on and find someone you love. You’ll lose a year when you settle.
#8: A Stretch Too Far.
In the old days of SaaS, you could only find folks too junior for a role because we didn’t have all the veterans. Today, people are broken and burnt out. You can’t hire the SVP from Mongo or Twilio who doesn’t want to sell anymore, so you set out to find this perfect Goldilocks person who doesn’t exist.
You have to hire a stretch, a kid, someone who might be 60 or 26. You have to hire someone with energy but isn’t quite the full package, or they may have been fired once if they’re passionate and romantic.
Getting fired from every job is bad, but just once might be good. If they’re willing to sell, to get on the road and do the work, it all becomes about human capital. You have to grow the sales team because revenue is doubling every year.
Whatever it’s growing, you have to grow your headcount in sales roughly. You can’t avoid it. If the yielded quota for an AE is $500k, and you want to add $5M in bookings, you need ten scaled reps. If you’re going to add $50M, you need 100. You can’t get around the math.
So, at the end of the day, if they know the product and can sell and recruit, make the hire. They need to have hired 2-3 salespeople who have hit quota. If they can hire two people and make them successful, they can find 200. But don’t take their word for it. Talk to those salespeople.
#9: Your VCs and Investors Are Often Wrong.
If you have investors, they’re right on many things and almost always wrong on a VP of Sales. They all love the handsome 6’4” paratrooper who looks good in a button-down and has a deep voice. He’s a name-dropper, and VCs love it. But most VCs have never done sales, and they’ll give you terrible advice.
Many VCs, however, were successful founders or CEOs, but still, the company they founded years ago isn’t the same as yours. Just because they know sales at their company doesn’t mean they know your sales.
You can listen to them, nod your head, and thank them. But if your gut isn’t 100%, don’t make the hire. And if your gut is 100% and they say don’t make the hire, say thank you and then make the hire.
10: Yes, Your Great VP of Sales is Out There.
This point is old and new. If you’ve made some mishires, lost a year, and you’re feeling burnt, know that your great VP of Sales is out there. Don’t go back to founder-led sales. Even in today’s world, there are plenty of ambitious folks. Sales doesn’t breed ambition like it did pre-2020, but the best folks want their shot in sales.
Keep interviewing 100 until you find them. If you don’t think there are great VPs of Sales out there, you’ve never worked with one. There are so many greats out there, and once you work with one, you’ll never go back.
Find the person willing to meet with 50 customers in the first two weeks who comes back with ten insights you didn’t know about your customer. If you’ve made a mishire, get up off the floor, go out there, and find that great VP of Sales.
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