Hiring the Right VP of Sales When You Don't Have a Repeatable & Scalable Sales Process

Stephanie, if you want to go to the next slide, we do have 30 minutes here and the goal is to make it as interactive as possible. So we want you guys to engage and to get you as much out of it as we can and give you access to Stephanie. So we encourage you to keep your cameras on if you're comfortable with it. Right now, everyone's audio is muted. When she gets to the Q and a portion of her session, feel free to unmute yourself so you can ask a question live. You can also go ahead and drop questions into the chat and you can also raise your hand as an option if you would like to ask a question that way. So we've got plenty of opportunities that you can connect and get your questions answered from Stephanie. These sessions will be recorded, so we recordings will be available on the SAASTR YouTube account after. And we'll also be sharing these slides on SlideShare, so make sure you follow both those accounts on Sastr if you don't already. Friendly reminder, we're ending the day today, but Brella and networking stays on. So for the next three days, make sure you register and check out the Brella networking app. You log in, you can search by name, by function or role or company, and find interesting and relevant people that we suggest that you network with. And Brella facilitates the entire thing, so definitely encourage you to check that out. That is happening today, tomorrow and Thursday. That is it for me. Without further ado, Stephanie, thank you so much for joining us. Go ahead and take it away.

Wonderful, Caitlin, thank you so much. Good afternoon, good morning, good evening to everybody. I think now it's possible for everybody literally around the world to participate in a conference like Zast or Scale, which is very exciting. I'm happy to be here. And yes, I would love to make this as interactive as possible. If you guys put questions, comments into the chat, Caitlin will help me make this very interactive and answer as much as your questions as possible. To start out with the title of the presentation, 5 Mistakes Founders Make When Hiring a VP Sales, I think this is an interesting perspective to talk about this from a founder's perspective, especially at this conference, because I think we have both founders as well as executives in the audience. And to every one of these mistakes, there are two perspectives, the founder side and the executive side. So I'll actually try to highlight both sides as we talk about this. To start out, maybe I'll introduce myself for one second while I do that. Please enter in the chat. Are you a founder or an executive? I'd love to know who is in the room, so to speak. I would ask you guys to lift your hand if you guys were in a real life audience. Anyway, so my name is Stephanie Friedman. I've done three startups as an operator the last four or five years. I've started to advise more and more founders in their go to market strategy and operations. I'm into investing as well. I'm on the board of a couple of companies. So I've been really enjoying working with a lot of companies and helping both founders as well as executives making the right decision and scaling their companies as quickly and as best as possible. So without further ado, I'm going to start talking about the five most common mistakes that I'm seeing when founders are hiring. Hiring a VP of sales. As you guys listen, please add to those mistakes. I'd love to hear from you guys, are there other from you in the audience, are there other mistakes that you guys see, that you guys see founders make? And then maybe we'll have some time at the end to talk about this. Wonderful.

It looks like we're 95% founders in the room. Maybe 97, 98. So great group and I think you'll have some great takeaways for them.

Excellent. Fantastic. All right, let's dive into the first topic. Really, really important I think to start out, know who you want to hire. I think there is a huge difference to your VP of sales. Hire depending on where your company is means that the single biggest differentiator is does your playbook still need to be defined or do you think you know what you're doing? Do you know who you're selling to, to whom and how? Those are two very different profiles of a sales leader. Somebody who you know needs to help you define your playbook, needs to be very analytical, almost like a Sherlock Holmes typ of person. They need to have the curiosity just to ask questions and really figure out what the right thing is to do. Not so much think about scaling. If by contrast you have kind of figured out your playbook and to me that this means you've actually written down on a few pages who you're selling to, what your message is, how you build your funnel, how you engage customers, how you expand and retain customers, if you have done that already, then you're looking for somebody who can really build, process, who can scale a large team. Now I think 90% of sales leaders are the second category. So really to find the first category is extremely hard and it's important to be very aware what type of person do you, as the founder really want to work with? I think that's a highly important question. And intentionality around, you know, who do I best click with is super important. I see founders sometimes talk themselves into wanting to like somebody. Especially, you know, you're often in dire straits, you really need to bring that hire on board as quickly as possible. And you kind of, you know, maybe are asking yourself, am I willing to compromise? I've seen it work. Best of the chemistry works if you have fun working with the person you work with. And ideally, you know, your first VP sales or an early stage HVP sales become something like a business co founder to you and your founding team. And so really pay attention to the type of person you want there. And then lastly, what kind of person and what kind of culture does that person need to bring with them so that not only you, but also the company can really work well with them? And sometimes that is about actually adding some diversity to the personality types. You know, sometimes the early founding team is like maybe very. Everybody's quite conflict diverse or everybody knows themselves, knows each other really well. And you may be looking for more like color red type of person who is willing to speak their mind and can actually challenge everybody a little bit or you know, depending on the situation, that's always very different. But just knowing what kind of culture you want to bring in, super important to make it successful. Great. Number two, I think it is highly important to simulate working together during the interviewing process. That has been important pre Covid, it is now even more important. And the single best way I found doing this is at some point towards the end of the interviewing process, run a three, four hour workshop where you actually deep dive into all of the areas of their function. You really spend time together just as if later on maybe you would have a session where you are preparing a board meeting or something together. You really feel the energy in the room. How does it feel to question the candidate on some topics? I think very helpful as you do this. I think it's so telling how somebody prepares for a session like this. Meaning do they kind of come in and wing it or do they have just, you know, two, three slides or did they prepare like 20 slides and send it out to everybody before? Are they, you know, happy and willing to share their slide deck afterwards or do they more feel like there's some trade craft secret that's, that's buried in their slide deck and they kind of, you know, hesitate. So I think the way people prepare for a session like that really tells you so. So and then also how they work with everybody in the room, how somebody manages a room, how they engage with everybody. Do they pay attention only to the CEO or do they pay attention equally to everybody? Are they able to engage everybody in the conversation? Super helpful. And I've always found it interesting to try to add somebody, especially if you maybe you find yourself as a first time founder hiring a high caliber executive that's been 20 years in the business, maybe adding a board member, an advisor or somebody who is in that field, quite senior to the mix as well, so that you can challenge the candidate a little bit and kind of see how they react to an unexpected type of question. Maybe you haven't given them the task, but at the very beginning you just ask them, pitch the company to me or pitch my product or my solution to me. And a senior executive, especially vp, sales should be pretty smooth when they do that, even if it's not expected. Because during customer meetings and important large customer meetings, you basically, you know, expected to think on your feet all the time. So that can be another good, another good thing to do. All right, just added somebody into the, from the waiting room, admitted somebody. Great extreme referencing. I'm always surprised that referencing is often a little bit neglected. I think that referencing is so important. So number one, yes, the references that you're getting from the candidate, you kind of need to do those calls. But what you're expecting on those reference calls is just glorious reviews. If somebody doesn't get absolutely over the moon glorious reviews from the people that they've given you as references, something is off. I think what you want to do is really do backdoor references. That means you work your network to find other people that have worked with that person. Ideally you find people that they've reported to have previously been peers and people that reported to them. Like a nice mix of all those three type of, type of people. And then referencing to me is not only about excluding the people you don't want to hire. I actually think it's the single best opportunity to understand how best to work with an executive you are about to hire. Ideally you only reference when you're very, very close to making the hire and then understanding how to best manage the person, how to get the best work out of the executive is actually, I think the single most important aspect of these calls, other than obviously excluding a bad hire that you maybe would be making otherwise if you don't make those reference calls. And then what I've noticed is that really well thought through framework of reference questions is really Helpful, especially because you want to actually get to a candidate's weaknesses. Right? Nobody's perfect. We're not hiring anybody because they're perfect. But we want to understand who we are hiring so that we can kind of augment the person with the right team around them or just, just really know how to get the best work out of them. And what I've noticed is that you really need to schedule enough time and have a framework to ask the right questions, especially questions about weaknesses several times from different angles. I've noticed in reference calls, most people really don't want to give anything negative. So you need more than 20 minutes to get to that point. Build some trust in a relationship in the beginning and then ask basically three, four, five times the very same question. Okay, tell me, you know, from a scale from one to 10, you know, how great are they? They're an eight. Okay, what would make them a 10? What could they do better? What kind of training could they do? Tell me anything that would be doing well or not so well on an, on an executive leadership team. So you ask that question of like, what are their weaknesses several times so that you know, finally you'll get something there. And again, this is not so much to, to exclude the person. Highly likely 95% of people that you're referencing you're probably about to hire. But it does allow you to know much better on day one who's joining your team and how to best work with them. All right. I've seen in companies, especially companies that are already well underway, that there is a new VP coming in. And especially first time VPs, just want to show that I know what I'm doing, I'm going to do stuff, eager to come in and mix some changes, maybe implement things that worked well at their previous company or implement a playbook that they've seen working. And I think from a founder's perspective, you want to make sure your new VP knows it's okay to take their time, it's okay to really understand what's going on. And there's no rush in taking actions basically. Now, in order to be able to do that, you as the founder actually need to know what's working and not working. And that's sometimes easier said than done. Right? Your ARR is growing. It's hard to necessarily know why or why not at any given point. To me, I find that over time, successful founders have spent some time running each functional area of the company themselves. Meaning you've kind of been the acting head of sales as you have been Working on figuring out your first product market fit and then your repeatable go to market, you know, sales motion. And so as you are trying to run sales, you kind of try to understand what's working or what's not working. So by the time your VP is joining, you already have somewhat of an understanding of what's working and what is not working. And then as you kind of speak to your new executive hires and especially your sales leader, often I like to encourage what I call as an attitude more of like a, like a business owner, less an employee general manager, call it like an excellent, you know, McKinsey consultant, so to speak. If that was appropriate for a startup. It isn't. But basically somebody who looks at the entire company, not only at the sales team. I see especially first time VPs very enthusiastically proposing changes, additions, you know, the evolution to the sales strategy. That makes very much sense when you just look at the, you know, you know, top line of your P and L, but it doesn't actually make sense from the bottom line perspective or CEO, cfo, you know, founder perspective. So making sure your VP knows, you know, I want you to look at the entire business, not only at your sales team. Super important. All right, Last but not least, very counterintuitive, but what I'm seeing work really well is if you have a new executive joining to actually manage them super closely during their first weeks and months and let them go over time as opposed to really just letting them do whatever they want and find their footing on their own. A lot of founders think somebody, I'm hiring somebody, it's a very expensive executive hire. They've been doing this for 20 years. They should know what they're doing. And given that there's so many other kind of urgent topics, fires burning and all the other functional areas. I have my vp, sales, I need to let those go a little bit and move on to other things. I think actually creating a very detailed onboarding plan and manage them closely is so helpful, especially until they have context and they've understood everything. And then in this plan I would even include meet these people, build a relationship with these 15 people, understand this, give me a proposal on that. And part of why this is so important, I think is it's a great way for the founder actually to be very aware of what they need the person to do to make sure they're really focused on the right priorities. Make sure you know, as a founder, what you want your executive to do and the benefit for the executive because it can come across as micromanaging. In the beginning, it can be a bit weird, especially if somebody is really seeking senior. I have seen this so beneficial for the executive as well, because at least you know exactly what your founder wants from you. And if you know, oftentimes, two, three, five months into a new executive's tenure, it doesn't work out. It's often because they have actually not founder and executive haven't been able to communicate really clearly what they're thinking about and what the high priority topics of the company really are. Really important. Pay attention to the relationships that executives are able to build not only with you, but really across the company, their peers, as well as individual contributors in their functional area and other areas for relationships between peers. Your marketing leader, your product leader, your sales leader. What you want is close relationships, almost friendships that can actually carry a healthy tension that you as a founder want your executives to cultivate over time. Once you, you know, you have 200, 300, 500, 2000 people in your company, you want your VP sales, your VP marketing to go into a room and have intense discussions around, you know, the next year's go to market plan. How much are we investing? Why not more in marketing? Why not more in sales? How much headcount dimension versus account based marketing. You want them to be able to almost fight this out, carried by this relationship, the friendship that they've been able to create, and then come to you with a proposal that's fairly mature because they've really had a healthy discussion around this. I think that is very important. And lastly, I'm seeing 70 to 80% of early stage VP sales hires not work out. See an early warning sign that you know it's not going well. And my recommendation is always to move pretty quickly. Rarely have I seen a turnaround. Often a founder's intuition is quite right if you know, after a few weeks the founder is like, something is, this just doesn't feel right. It doesn't produce any results. I'm not seeing the progress I'm expecting or I feel like we can communicate more often than not. That is the right intuition. And then it's better to really move quickly and let that person go into a company where they can be successful and actually contribute in a meaningful way and start the recruiting process again to find somebody that's a better fit for you. All right, so this is a summary of the five topics we've talked about. Know who you want to hire. Simulate working together during the interview. Reference to the extreme. Don't allow your no VP to break what's already working and manage a new executive closely until they have context to run on their own. So with this I'm happy to take questions. Caitlin, over to you for questions.

Yeah, thank you so much. That was amazing and really tactical. I love that. They were just short, sharp nuggets that are very relatable to a lot of people. So thank you. If you want to go ahead and unshare your slides, I'll run through. We've had some questions come through, but continue to drop your questions in the chat. We've got about 10 minutes for questions, so first, first up is any recommendations or best practices when assessing sales leaders for channel reseller driven business?

Yeah, so for me the reseller and channel is such an important topic. Often the highest leverage way of going to market. And that's an area, in my opinion, where you need experience. There's a lot of skill and just tactical knowledge that can help. So for me, I would look at somebody who has done this before to me to build out a channel or partner go to market. I would look at somebody who has done this 1, 2, 3 times for a startup already or at least has been part of the channel and go to market team in companies several times and can bring that experience to the table.

Great. For the first sales leader, how long do you think they last at the company?

Well, that really depends. If you are lucky, you might be able to hire somebody who can really stretch. Right? You can hire somebody in that sweet spot early on that they can be helpful to you from like 0 to 10 million. But if they've maybe been a number two in a company that has been successful where they built out a go to market to like 50 or 100 or 200 million, maybe they can stretch and just be with you for four or five, six, seven years. I think that is always really depends and you know it is okay. If it's two or three years and somebody then moves on to a different organization, that's fine too. You know, I think it really depends.

Okay, next up, we have a question for the first sales hire before the playbook is well defined at Silicon Valley based SaaS B2B, we're looking primarily for a builder for our GTM plan who can also be out there selling to our key accounts. What are some best practices for constructing a comp package? For example OTE versus base quota equity, et cetera?

Yeah, so I think, you know, Silicon Valley comp is pretty standard here. I think what you're looking at, there's not too much variation on your base and variable. But I Think where you can really make a big difference is how you structure your targets for the variable part. Meaning if you're building out an enterprise, go to market and you don't have your playbook yet, you could start out by saying, okay, you know, for the first two months, I need every Friday a document from you that's, you know, questions, learnings, observations, recommendations. So you kind of, you're paying your person to do a lot of customer calls. That's number one. But most importantly, come back to you with what they've learned, distill their learnings on paper and clear categories that are useful to you. So that's, I think the biggest contribution in these early days. Talk to customers, but bring back to me your learnings in a way that the founders can consume. And then moving on from there, you can say, okay, after that, I need X number of customer calls, I need X numbers of opportunities created. You don't necessarily know the dollar amount in these early days, so it's hard to give a dollar quota. So you can kind of base the variable pay in these first months on number of conversations, number of opportunities, number of offers, number of proposals sent, number of, you know, opportunities one closed until maybe after, you know, five, six, seven, eight months. Eventually you'll learn roughly what your dollar value per closed opportunity is. And then you were able to actually give a dollar based quota and you could also add if you then expect to build a team, you know, you can add, you know, in Q2, Q3, hire one AE that is able to also produce X number of opportunities, hire your second AE, hire two SDRs. Basically really be creative around that variable part to make sure that it always reflects exactly what you need the person to contribute. And hopefully if that's, if you've hired the right person, they can actually help you define their variable targets based on the company goals.

Great, I like this one. Do you have a killer interview question for a VP of sales leader interview?

I actually do. To me, the very first question that I always ask in the very beginning and hiring sales leaders is often what I help my founders with is I open, friendly greeting, et cetera. But then my first very open ended question is where were you born and what happened since then? And then I sit back to me after I've heard the answer to this question. More often than not, I'm very close to knowing the answer of this person. As a hire, a great sales leader is able to really capture the audience. They're able to succinctly introduce themselves to you. They are able to Read the audience, they will give you exactly the bullet points, so to speak of their professional life that is relevant to you and they'll be able to sell themselves to you because that's what they do for a living. Right? The anti pattern here is somebody after five minutes they're still talking about high school or where they live or their hobbies. All of that very maybe interesting and something you can talk about in another meeting but not something that will be relevant for hiring or not hiring them. So that is the one question that I always start my interviews with and I find it super telling.

So true. Thank you. Couple more questions coming through. Would you hire an AE first or a vps first?

So to me that mostly depends on the business experience of the founders. To me, if none of the founders have any business background whatsoever and are really purely technical, maybe first time founders have never run a company. My recommendation is actually to hire very hands on VP sales. That needs to be somebody who's just in the right sweet spot in their career. They're willing to be hands on, excited to talk to customers, but will be able to actually help you build out your go to market motion. If one of the founders has a business background, is maybe happy to manage AES, knows how to manage AES, then you don't need the sales leader as the very first hire. I would still recommend after you find your repeatable sales model bringing a sales leader pretty early. It's never a good recipe to have one of the founder manage 6, 7, 8, 10 AES. There's just the founder's time is so, so precious. So figuring out how to bring in AVP sales that can replicate the founders participation in the go to market motion is always a good idea.

Great. And probably our last question, unless anyone has any last questions to send through the chat. But how important is it for the VP of sales to be based in same city as the rest of the sales team? Even with COVID most of our sales team prefer to work from the office. We have four salespeople and hope to have this person scale the sales team.

So I think so. There's a lot of advantages to working remotely and I think Covid has shown us that a lot is possible. Sales is somewhat specific in the sense that it can actually be quite hard. You hear no. You know at times in the early days you have to learn so much from calls, you know, talking to each other. So if it's possible to actually have your sales leader in the same location with the biggest part of your sales team, I think there's a lot of benefit to that. You can get the team together early in the morning. You can, you know, have a quick, you know, get together. What do we need to accomplish today? Okay, would you bring in, you know, $25,000 or $500,000? How do we do it? Which are the deals that are closing? You can generate a lot of energy during end of months or end of quarter sprints if you are all in the same room. This is all possible remotely. A bit harder. So if possible and everybody can be together in the same location, I think there's a lot of benefit to that. If not, I think it's just as possible to do this remotely. But then your sales leader just needs to be very intentional about how to do that. They need to think about how to create that same energy and kind of team spiritual virtually over zoom, which eventually, if you have an international team, that's necessary anyway.

Yeah. Great. Awesome. Thank you so much. I have two final questions for you. One's easy and one's a little bit harder. How can we keep in touch with you? Do you have a Twitter presence? LinkedIn, a blog that we can follow for tips or just to engage with you if we have any further questions.

Yes, you find me on Twitter. She underscore travels. That's me on Twitter. Also, please feel free to connect with me on LinkedIn and. Yep, send me questions this way.

Great. And then just leave us with one lasting tip or lasting piece of motivation for us to end the session and close out our day today.

Yes. Happy to you create your own world. To me, that's a lesson I've learned. I find early on in my career sometimes days are hard, especially in sales. So creating your own mindset, creating your own energy, and then run the day, don't let the day run you.

Perfect. Well, Stephanie, thank you so much. This is great. Well, leave everyone with that piece of motivation to close out the day. Thank you, everyone, for joining and we will see you tomorrow.

Thank you. Have a great rest of your day.