Good post, but in your opinion WHEN should you hire a VP of sales, as it seems like you don't have any immediate plans to hire a sales executive. And what's the difference between a VP of sales and a sales manager?
Titles are bullshit. At some companies almost every salesperson is a VP of Sales, Western Antarctica (or whatever) -- it's a free way to make customers feel important.
For starters sales reps are individual contributors where are VP of sales tend to be organization builders. They hire sales folks and build a sales organization under them. So you should expect VP of sales to be much more senior and thus cost you more in salary and equity. A good VP of sales tends to get 1 or 2% of equity. That may vary though.
In my opinion, hiring a VP of Sales makes sense if a large sales org is critical to your business success. Think global domination. Some VP of Sales depending on their background are better at 'optimizing' sales processes and personnel rather than experimentation and general hustle.
Once you have some traction and a solid product, a great VP of Sales will help you scale your early success rapidly.
This sounds like bad advice to me. Doesn't this mean that the VP would be the sort of person who would do "anything" to close the deal? Including lying to the customer?
I've worked with such people before and it was not fun. I was stuck explaining to the customer why the product he bought doesn't do what the sales guy promised.
Call me naive, but I still believe that a sales person is someone who works with the customer to try and solve his problem with whatever he is selling.
The true test of your VP of Sales should never be: "What do you know of the domain and what do you know of the customer" particularly when we're talking about an early-stage company, still searching for a repeatable sales model. It's my view that best test of the VP Of Sales is the following question: "What do you do when no one is buying our product?"
Sales executives that are trained and deeply experienced in sustaining innovation sales models are great when the repeatable sales model has already been discovered, documented and integrated into the entire organization, including the marketing and product. At this level, the role of the Sales VP is there to "caretake" the sales organization through the maturation stage of growth and dependable business objectives led by the CEO. Their rewards are aligned with the ability to keep the engine humming or fine-tune it for increased sales revolutions.
In a startup, prior to full discovery of the repeatable sales model, one should avoid any sustaining innovation Sales VPs like the plague. One should take a bigger risk on high-energy, untrained sales reps/managers, who are capable of learning disruptive sales models and can be trained (and retrained cheaply) to patiently listen to the customer buying cycle and business circumstance around which a new marketing model must be built. It is my view that most VP of Sales are not trained for disruptive and innovative sales roles because their experiences were anchored around very predictable revenue models.
At the VP of Sales level, there are many ways to vet a candidate and those methods should align with the corporate structure and the corporate culture. However, let’s be clear. The first VP of Sales or VP of Marketing are high-risk hires who the CEO should be prepared to replace as quickly as possible as the product market fit process, customer segments, and customer buyer-cycle and buyer-profiles continue to change and settle.
Don’t get obsessed over your first VP of Sales as “The One”
Obsess that you have athletes that are capable of running a hard sales race and that your organization is nimble enough to adapt and change, as needed to survive the sales discovery process!
There's a big difference in psychology. Although it's only a rule of thumb, the best VP of sales can be a bit more introverted and detail-oriented than the salespeople they manage, who can be more outgoing, high-perseverence, cold calling types.
VP sales has to manage revenue pipelines, analyze sales reports, detect account losses, manage promotions, get involved in contract negotiations, etc.
Salespeople network, originate leads, cold call companies, build relationships, close deals, etc.
The best salespeople often make terrible VP sales.
This is a really good point. I am reading "The Hard Thing About Hard Things" and Horowitz discusses hiring a VP of Sales and the requirements of the role aren't necessarily to get their hands dirty but more so to liaise.
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