A short talk advising B2B startup founders against hiring a first VP of Sales immediately. It argues executive search is slow (commonly ~6+ months), costly (executive search fees around 20–33% of first-year cash comp), and often results in short tenures (12–24 months), so startups should consider interim, fractional, or trial sales leaders instead (try-before-you-buy).
Chapters
The executive recruiting process will take you six months. It is going to cost you 50 to $70,000 and you will fire the person after 12 to 18 months and start over again. Picture a B2B startup. The founder and a team of engineers and developers have built a great product. The founder has taken it to potential clients, received part positive feedback, hired a couple of salespeople and sold it a few times and now it's time to scale through sales. At this point, do not hire your first VP of Sales. The process will take six months, cost you 50 to $70,000 and you will fire this person after 12 to 18 months. Let's break this down. The recruiting process can take a very long time. In researching what long actually means, I came across several executive recruiters that describe long as it depends up to one year or longer. So some do claim shorter timelines of 90 to 120 days. My observation is that it is at least a six month process until you will have the first person of your choosing starred on the job. Most executive search firms charge a percentage fee. On average, retained executive search firms charge 33% of first year total cash compensation. Even if you get a deal at 20 or 25%, you can do the math on a 200 or $300,000 total cash compensation. It is an expensive undertaking and the numbers on tenure for the sales leader vary just a little bit. They range from less than a year to 24 months. The two common denominators are the tenure of the VP of sales is only half that of all other executives and the younger the company, the shorter the tenure. A saying like you've got to get past the CarCass of your first VP of Sales is around for a reason and my prediction that you're going to fire this person and have to start over again is not far fetched at this point. You may think, I'm going to break this cycle. Break it possibly by promoting your best sales rep that you've known for a long time. Break it by hiring a friend that you've always wanted to bring into the business. Promoting from within or bringing in a friend likely does not give you the experience and skills required to achieve your goals. At the very least, you may have to accept a longer learning curve of an inexperienced individual. On the other hand, there is most definitely someone out there who has done before what you aim to accomplish. The perfect match is bringing their experience into your organization. Consider the interim sales leader available within a few days, integrated into your organization. Just like a permanent hire, possibly fractional or part time. You only pay for what you need, overqualified and immediately impactful and they can transition into the permanent role. So try before you buy. Contact us if you would like to explore this option.
