Appointing a senior sales leader is a daunting step for a startup founder – but getting it right is vital step in safeguarding continued growth.
At some point on the path from startup to scaleup, not entrusting sales to a trusted lieutenant becomes an unacceptable opportunity cost.
It’s going to feel like a leap of faith. As founder or CEO, your existing clients may have invested as much in you, personally, as in your business, so handing this responsibility will depend on a high degree of personal trust.
But the greater fear should be of failing to make this all-important hire at the right time.
In 2002, a many-time technology CEO and venture capitalist named John Hamm released a book entitled, “Why entrepreneurs don’t scale.” Hamm’s insights are no less relevant today. He lists a range of factors, which ultimately boil down to a CEO or founder failing to successfully transition from being an entrepreneur, to an enterprise leader.
As somebody who’s spent his career recruiting senior salespeople, this is the one that sticks out for me:
“…single-mindedness is an important attribute in a visionary who wants to unleash a revolutionary product or service on the world. Yet this quality can harden into tunnel vision if the leader can’t become more expansive as the company grows.”
If you’ve done your job as an entrepreneur correctly, your ‘revolutionary product’ has already been unleashed. The next step is to transition from revolutionary, to widely used and well-established. That’s a radically different sales approach which, in most cases, requires a different kind of professional.
This article explains why VP of sales is such a crucial hire for a scaleup. It delves into the core competencies that the role demands – and how those competencies differ from the skillset of a sales leader at an established enterprise. Finally, we take a look at how to collaborate with your new VP of sales , and ensure a successful partnership.
Why VP of sales is such a critical hire for a scaleup
The first transactions a CEO engages are usually unique by nature, and they don’t look very much like the deals closed by an established enterprise.
Those first transactions are often referred to as lighthouse deals, and they differ in two ways:
- where the lead came from – at a startup, this is likely a client introduction, or someone you already have a working relationship with
- the clients’ needs and expectations. A startup’s clients are aware that they’re essentially engaging in a very large beta of your solution – and so they likely have a high degree of personal trust in you, and perhaps even some appetite for risk.
The sales process that goes down in lighthouse deals is not repeatable. But – lighthouses being what they are – they shine a light on the sales process that you evolve over time.
The insight that comes from these lighthouse deals will inform decisions such as how best to present your value proposition, and how to map your solution to the problem that it’s portending to solve.
This insight is a perishable asset, so when those first lighthouse deals have taken place, it’s critical to have a leader in place who can capture that insight. Their job is then to convert that insight into a process that can be readily repeated, scaled, taught and utilised as effective product marketing material.
Most founders will not have overseen this evolution before. A VP of sales who is really worth hiring will have (so, all the more reason to hire them early).
In a VP of sales for a scaleup, you’re essentially hiring for a creative master of chaos.
These are people who thrive on the absence of structure, and who arrive at the business knowing which systems and structures they want in place, and the experience of previously having collaborated with company founders on successful go-to-market strategies.
They are rugged entrepreneurs, essentially creating all the resources you and your team are going to be using in order to sell.
They are also careful custodians, with a predisposition towards optimisation, as opposed to outright innovation. They’ll inherit your intrepid first few salespeople, and hopefully significant revenue production – and will make these things as profitable as possible, with the least possible disruption.
It’s a completely different set of problems, and a radically different person, to the sales VP who arrives a mature firm with an established pipeline, with all their tools and processes already in place.
Core competencies for a VP of sales in martech
When I’m thinking of highly effective sales leaders I always come back to Jeff Barnett and Brian Callahan.
Barnett joined Demandware in 2005, the year after it launched, and oversaw its growth into a $2.8bn acquisition by Salesforce in 2016. He was the first head of sales at Demandware and did a remarkable job of creating a team and a set of processes that could scale, and instilling the right culture in the organisation.
A year after he joined, Barnett appointed Brian Callahan, a magnificent VP of sales who drove tens of millions of dollars in growth. Callaghan was the athlete performed really well in all positions, who hired really well, and who equally contributed invaluably to the processes and culture of the sales team. I have not yet a rival to the sheer level of production and success of this pairing.
You can read up on these two in your own time, but it’s worth identifying the specific traits that you find in people such as this, so that you bring the right talent into your own scaleup.
1. A legacy of bringing new products to new markets
The history of startups is replete with examples of great solutions that never found their market. Part of the reason is that there wasn’t a capable sales leader to capture the IP from those first deals and translate it into a message that resonated in the market.
At an enterprise, the message already resonates. The market is already sold on the solution, and the challenge is to make the proposition different enough that it gets noticed.
At a startup, you may be illuminating a problem the client did not know existed or that they had not budgeted for. So the Sales VP needs the characteristics of a solutions consultant. The individuals that succeed at these early stage firms have a reserve of entrepreneurial spirit that the folks at more mature firms don’t need.
2. Insatiable inquisitiveness that leads to partnerships
Every salesperson is a proficient networker, but typically, I find early-stage execs’ networking is motivated as much by a thirst for knowledge, as a thirst for deals.
That’s because startups operated in unchartered territory – so the only way to sell is to map your way forward.
The scaleup VP of sales will be networking with:
- Partner tech companies. No single commerce or martech solution provides all the modules needed to complete a stack – so a lot of your sales will come off the back of partnerships with tech that your prospects already use
- Systems Integrators. Your VP of sales will have experience bringing aboard your professional service force multipliers. They will know who has the bench strength, solutions experience and vertical expertise to deliver your solutions on time, and on budget. They will also provide the integrator what they need pull their team away from an existing business line to devote to yours, and what you will need to provide in order to retain their partnership from a marketing, training and development perspective. Your VP of sales will also have determined when bring aboard an alliances leader
- ISV partners. Your VP of sales will have developed successful co-selling, white label or OEM partnerships with the firms that use or host your data, provide ancillary services, or provide the ERP, CRM and supply chain solutions for your client base
- Consulting partners. Your CRO will have relationships with the digital commerce and marketing leaders at Deloitte, CapGemini, Accenture, etc. These partnerships will shed a lot of valuable client intel on re-platforming, product releases, new market openings and more
- Marketing. You CRO needs to be joined at the hip to your CMO with shared goals, objectives, pipeline, and go-to-market messaging. Their teams will interact regularly on process, to share perspectives and gain awareness of issues.
I really enjoy networking with these scaleup execs because they ask great questions, and display much broader understanding of the marketplace, and of individual solutions’ place within the tech stack.
3. Agile and adaptable leadership skills
It’s a different kettle of fish, taking over as leader when there’s already a structure in place, and having to build one from the ground up.
The opportunity to start everything from scratch may be overwhelming, and experience will be need to know what and – crucially – what not to incorporate into your team. In the words of Matt Blumberg, your methodology will not just drive customer discovery, customer journey, and pain points to map out your questions and stages, but should…
“help the sales team define who they are and what they want to do, and not do.”
If you’ve documented your early sales motions, the VP of sales needs to know what insights to retain and what can be used for training, and for leading sales execs through the cadence.
They will be masters of optimisation, with experience of introducing efficiencies and adjustments that increase margins, reduce sales cycles, increase deal sizes, accelerate pipelines, and increase win percentages.
They’ll be adept at reporting, and skilled in the use of data to make accurate forecasts, increase time to productivity for new hires, and increase retention rates for team members. They’ll ensure the team is documenting client interactions properly, and know precisely which metrics need to be captured from meetings, calls, and emails and how to translate these into better processes.
The VP of sales will also be highly adept at running meetings and events with their colleagues: vital exercises in stress-testing the solution as well as ensuring the cohesiveness of the team.
The dream hire is one who has developed a sales organization segmented by verticals or size of clients – because they will have done all of the above many times over, differentiating slightly with each team, learning and optimising as they went.
Developing your sales VP into a trusted lieutenant
As founder, you may currently be the best salesperson in your business. But while you’ll likely remain involved in the biggest deals through the lifetime of the company, you need to make sure you are quickly overtaken by your new VP as the star performer.
This is critical for two reasons.
The first reason is the value to a growing business of a Sales VP’s experience and unique insight.
In the early days of SuccessFactors, they hired Dave Yarnold to launch the solution to the enterprise market. Yarnold is one of those heads of revenue that’s just above and beyond in many ways, but at SuccessFactors, it was really a relationship-building exercise.
Yarnold helped the executive team understand his vision for SuccessFactors: what it could be, how it could impact the market, and the steps they could take to anticipate that. Under his sales leadership, SuccessFactors went from a $5m business to a $200m dollar business over four years, and three years later it was acquired by SAP for $2.8bn. So the results speak for themselves.
A lot of founders feel very protective of how their solutions are presented, but sales VPs have to share with the founders how to make their message resonate and rise above that of their competitors. Managing up is part and parcel of a VP of sales ’ role. They’re become guardians of the founder’s baby – in some cases, having to tell them it’s not as beautiful as they thought and in need of a fancy outfit.
The second reason is that if sales VPs aren’t recognised as star performers, they quit.
Some founders have a really hard time letting go of some of the technical portions of the sales process – contract negotiation, pricing, etc. But it’s imperative that they do let go, because the head of sales really need to have control over all of those areas in order to be effective.
They need to be trusted to negotiate, and to have the authority to secure resources that support their predictions. Without these responsibilities they’re handicapped, ineffective, disempowered, and ultimately they end up looking for another job.
Inevitably, this has implications for your role as CEO.
You’ll likely remain involved in important deals, but your Sales VP is likely to need you to take on specific roles depending on the precise nature of that deal. There’s a process that companies go through to acquire solutions: 8-12 steps in many cases, selling to a committee of buyers who are all necessary to the process. Your VP of sales has dedicated their career to understanding those processes and developing methodologies that work.
It’s a difficult pill to swallow, to think that somebody knows more about how to sell your solution than you do – but this is usually necessary for fulfilling your company’s potential.
This is a partnership which will depend on a lot of listening, and lot of trust.
If you’re unfamiliar with sales, or you’ve had an unfortunate relationship with sales in your prior organisations, that prior experience cannot muddy the waters of your new partnership.
They key is communication. Let your VP know that you trust them implicitly, that you’re backing their decisions and that you support them. Rain or shine, you’ve got their back with their board and the wider leadership team. When they go into a client negotiation, they need to know they’re your sales VP regardless of the outcome.
Some founders really don’t get this. They set sales leaders off their own and expect magic results to just start showing up on the board.
But the truth is that salespeople are the most people-focused members of your team. Delighting customers is what they do; they take personal pride when they succeed in that, but they also suffer when don’t.
They need emotional feedback and support, as well as your leadership. They’re out there doing the hard work, and it’s a tough slog, so it’s important they know you appreciate the effort they’re putting in.
Search for your next sales leader with Rosenstein Group
Rosenstein Group has over 20 years’ s experience as a leading executive search firm in martech, ecommerce & supply chain SaaS. We’ve recruited heads of sales, marketing leaders, and other members of the commercial team at businesses of all sizes: from new startups, to enterprises such as Salesforce, Demandware and SAP Hybris. Learn more about our work in martech here.