Jason M. Lemkin argues that at $1-2M ARR, you don't need a VP of Sales first. A great VP of Marketing can generate high-value leads to cover their salary, a VP of Customer Success can expand existing accounts, and a VP of Product can create features that win deals. Hire the best executive you find, not the role you think you need.
Chapters
So here's the one that like everybody gets a little bit wrong, which is which VP— I finally got to $1 million or even $2 million in revenue. Which VP should I hire first? 90% of you in the audience will want to hire the VP of Sales first, right? You'll finally figure out how to get customers. You'll get tired. You'll feel like if I can find this great VP of Sales, she'll be a magician. I'll sell more. It's true. Absolutely. If at $1 million in revenue, you're ready, $1 million, $2 million at the latest, you are absolutely ready for a VP of Sales. Once you even have 2 reps, at quota. As soon as you have 2, a great VP can take you from 3 to 300. That's her job. She can do it. But what people don't get is that you should hire actually any great VP you can find at a million. This is the mistake we get. We fixate on this magician that's going to magically bail us out. But here's the magic. Once you get a million, you're trying to go to 2 million or 3 million in the next year. That means that all of these VPs, if they're awesome, will be accretive. So yes, you want the VP of sales, but what about a VP of marketing? Imagine I hired my— I wrote this post years ago because I didn't get it. I hired my VP of marketing at $20,000 a month in MRR, and she was not only great, she was accretive. Like, why would she be accretive? Let's imagine you hire a VP of marketing even later at a million, and she brings more leads in. I just invested in a company at a million in revenue. It has 40 leads a month. It's doing well. And the next thing we're gonna do is hire a VP of demand gen. You want to know why? If she gets them just from 40 to 50 leads a month, and those leads are worth $20,000, $40,000, $50,000 each, isn't she gonna more than pay for her salary? Of course she is, right? Of course this VP of marketing can get, if she gets you 50% more leads, and instead of going from 1 to 2 this year, you go from 1 to 3, an extra million, even an extra half million, she's gonna more than pay for herself right then and there, at least probably in 2 quarters. So absolutely, anyone that can get you more good leads is worth their weight, worth their salary and their weight in gold, even at $20K a month. So hire her early. Don't just wait for this VP of sales. Same thing with customer success, right? You heard Todd before talk about hunting that first great customer he was talking about. If you have 10, even if you have 10 big customers, 20, 30, and you hire this VP of customer success at a million, and she grows just a couple of those accounts bigger than you could, 'cause you don't have time, or some junior person does, she can more than pay for herself. I, over time, had accounts that we grew from $20,000 to millions of dollars at Adobe Sign and EchoSign. You bring this person in to handle Let's say you're doing $1 million and 10 of those customers are $500,000 of your revenue. Can this person grow that $500,000 to $600,000, $700,000, $800,000 if she or he does nothing 50 hours a week but make these customers happy? Of course she can. So don't wait. If you find the world's best VP of customer success at $1 million, hire her tomorrow. Hire the VP of marketing, hire the VP of sales. And then the last one, and I think Todd might have touched on this, but we don't get it. We all wait for the VP of product late. Why wait? What if this VP of Product spends 50 hours a week figuring out what's that magic feature that's gonna get you that $50K deal, that $100K deal? And what if each quarter she reprioritizes your roadmap 'cause you've run out of time so that you can make that GE, that Google, that Facebook, the Schneider Electric, the whatever happy, and just once a quarter you close that bigger deal? That VP of Product is accretive. They're beyond free. So hopefully I've convinced you at least some of these are true, and you're all gonna be fixated, VP of Sales, VP of Sales, VP of Sales, VP of Sales. Hire her if you can find her at a million, but also hire any of the VPs if they're great at a million. They're all accretive and that value will just compound over time. Since this is my perfect order, the VP of marketing early because just more leads means more revenue. You literally can afford a VP of demand gen at even $20K in MRR because she'll more than pay for herself. VP of sales at a million, maybe the VP of sales CS after that, product at 4 or 5, engineering after. This is like, in a perfect world, if you came to Traction, you met all your great executives here, life was perfect, you could maybe do this, but I would reorient any of these if I found a great one. Any of them, hire them the second you hire a great one. They're all accretive.
