If you are the founder of a B2B SaaS startup and have finally reached the stage of hiring your VP of Sales, we hope this helps you.
The reason why we phrased the title so strongly is that the VP of Sales position is almost the first external executive hire at a B2B SaaS startup after raising capital from VCs, such as series A funding. VP of Sales is also the position where many first-time entrepreneurs continue to make mistakes or experience failures in hiring.
This mistake is critical not just because you need to pay tremendous compensations to this executive position.
The fact that you have raised series A funding, means that you are at a crossroad where you must promptly scale your business. This means that your management environment and the decision-making dynamics have changed because now you have investors and board of directors from which you need to gain trust. Therefore, Hiring the wrong VP of Sales at such a crucial moment could be extremely painful.
This post, I am going to answer the following three questions.
- What roles should you expect from the first VP of Sales?
- Where and how should you hire a VP of Sales?
- What questions should you ask during an interview, and how to make a hiring decision depending on the candidate’s answers?
What roles should you expect from the first VP of Sales?
Hiring a VP of Sales is often not very successful because the expectations for this job are not clearly set. Especially, if you had led 3~5 sales team members directly so far for sales as a founder, what and how to delegate to the VP of Sales, could be rather vague.
Team building
Although this may seem obvious, the VP of Sales spends more than 20% of their time building the team after they are hired. The thing you have to check during interviews is whether they have 2~3 capable team members that they can immediately bring to your company. Capable sales leadership has capable team members following them, and the sales leaders would have gained respect from team members in all areas such as leadership, track-records, decision-making skills to help the team succeed.
Since the talent coming along with the leader is not enough to form a full sales team, they must also take charge of hiring from outside. In a short period of time, they must identify your company’s attractive unique selling points and the value propositions they can offer to a potential candidate, then proceed to search for ideal talents.
Leading and supporting the team
Leading the team and displaying executive ability, such as making important decisions in sales contracts, are also roles of excellent VP of Sales. When performing the buying process for an enterprise of considerable size, there are situations where they need to lead strategies a few steps ahead by predicting the procurements process of the potential buyer such as security, compliance, the accounting team and legal, etc. Also, obtaining a verbal commitment from the client with a compelling speech in the final decision stage is also a characteristic of an excellent VP of Sales.
Establishing sales strategy to build pipeline
The sales strategy made by the founder and early members could be clumsy in the eyes of a seasoned professional. the role of a VP of Sales is to build the ideal customer profiling, messaging, and strategic response towards competitors, the role is also to look at strategies that deal with the customer’s emotion (positive and negative) comprehensively and establish GTM (Go-to-market) strategies that the board members can be satisfied with. Also, establishing sales pipeline forecasting 3-4 quarters ahead, suggesting persuasive prediction models, and persuading the board of directors and CEO are also primary tasks to be done by the VP of Sales.
Buildling the initial operational models and hiring Sales Ops
Going beyond a series A investment, when a B2B SaaS startup continues to grow, the sales organization becomes more diversified while supporting departments are also established at the baseline. Departments such as Sales Operations, Deal desk, Sales Enablement, etc. are examples of this. However, if your company just finished raising a series A investment, officially filling the workforce for such departments would not be easy. At this time, the role of the VP of Sales would be to quickly establish an initial version process based on past experiences, and also to understand which personnel are good leaders of operation departments when officially forming the teams.
Setting a cooperative and systematic relationship between the marketing department/head of marketing
This relationship could be slightly different depending on your product’s ACV (average contract value) and sales motion (SME, Mid-market, Enterprise), and also whether the first paid customer is sales-led or ‘product-led growth’. However, all discussion processes, including at what stages the sales team will be involved with the marketing team, what inbound lead will be delivered by marketing to sales as a qualified lead, how the objectives of the sales pipeline will be divided, what cooperation will take place in events, and how the customer can contribute to the marketing team’s content production after a deal is closed, require operating relationships with the marketing team that is ‘cooperative and strategic’ in nature.
Game changer to rescue your company or a deal that goes wrong
For example, let’s say that in a $1M ARR situation, the VP of Sales hired 3 reps, and each of the reps is expected to achieve a $3~400K quota each to reach $2M ARR, which is far off.
The junior sales rep may leave the company in a month thinking that selling your product will be difficult due to lack of product-market fit, or the customer could change their mind and obstinately ask for a refund. The training of each sales rep (referred to as ramp-up) that you thought would be completed in 2 quarters, or 6 months, could get extended, and signing the first contract could be rather sluggish.
In many cases like these, would you suddenly be able to accomplish a $1M ARR enterprise deal? The hero who can save your startup from the various unimaginable startup horror stories could be the VP of Sales that you hire.
Where and how should you hire a VP of Sales?
Given the assumption that you are not a serial entrepreneur based in the Silicon Valley and not have extensive personal network, especially when you are a foreign founder, I can understand that you may be clueless about where and how to hire a VP of Sales for the first time.
You may think that an executive search firm is the only option, but this takes a very long time and doesn’t guarantee success.
A capable VP of Sales is a leadership position with high scarcity. Even the investor who seemed like they would be able to bring you a VP of Sales all of sudden after series A investment may not have any adequate VP of Sales candidates for all of their portfolio companies.
The thing you could rely on, in this case, would be a proven executive search firm introduced by your VCs that they are working with for other portfolio companies.
However, you need to understand that the way a search firm operates is similar to that of channel sales partnership. It is worth considering whether executive search firms, which gain profit depending on the success-commissions, will put the hiring of VP of Sales for your company, which has relatively low product maturity and less market validation, at high priority.
Particularly, since the current software/cloud-related market has been rapidly volatile due to the post-pandemic economic crisis, the potential candidates have control in the current job market where everyone seeks to hire an outstanding VP of Sales.
Sourcing on your own must also be done at the same time. The sourcing approach requires a lot of strategic considerations.
You may send a cold outreach (InMail) on LinkedIn for hiring, or a warm intro through friends could also help. Don’t forget that your cold emails are also part of sales activities as a founder. Explain your purpose and unique selling points concisely and accurately.
I am Sanghee from [your startup name]. [The startup name] is servicing [service blurb], and we just raised Series A investment of $00M from [a VC name
After the series A funding held a month ago, we are looking for a sales leadership who can take us to the next milestone. Are you open for a 30-minute zoom chat that I can give you a more detail about this position and our company? I’d like to make you an exceptional offer since this is the very first hiring of an experienced executive leadership
Best,
Sanghee
It is very likely the candidate will not respond to this in a single cold email immediately. You need to be prepared for this to take 6 months to even 12 months, and contact them in every three months.
Even the best candidates, at the existing employer, could slip from achieving the quarterly goals due to a single mistake, or may have lost motivation due to a strategic decision made by the board/CEO.
If such is not the case, another way is to politely ask the if there is someone, they could introduce for you among the top 10% of sales candidates talents instead.
What questions should you ask during an interview, and what decision-making could be involved depending on the answers to the question?
Now, let’s start with the interviews. We can discuss the following questions based on their past experiences.
What were the deal size and deal cycle in startups/companies you previously worked in? What were the ideal customer’s profile at that time and their buyers’ persona?
If their experiences are misaligned with your deal size and sales motion, this is a negative sign. It may also be a concern if they cannot immediately answer the question on their ideal customer profiles.
Tell us about your team you managed before and how did you build the team?
Not having a specific blueprint for teambuilding means that they may need to rely on a recruiting team or an external search firm for team which is not necessarily bad, but also concerning factor, also indicating that they may lack the ability to immediately build a sales team when things are progressing urgently.
Tell us about the competitive situation in your sales career that gave you the most trouble.
New tools appear in B2B SaaS industry each every day, and this area has a high possibility where, among those tools, certain softwares that will become our competitors could appear. Answers to the question above may provide perspective to determine a sense of competitiveness towards the rivals, the determination to win, and strategies to realize this.
Tell us a list of the sales tools/softwares you have used. Also, aside from Salesforce, tell us a few tools that were the most effective for you in terms of team management.
We are living in an era where B2B SaaS operates teams using data and analysis. You need to keep in mind that not knowing sales tools or Sales Ops Tech stack means that the sales leader has a very critical flaw in efficiently operating the team for the company’s growth for at least the next 5 years.
Now, let’s ask more direct questions that could help you determine whether they will be helpful in successfully leading the growth of your company.
How would our company change from now to 100 days after you join?
With this question, you will be able to hear a lot of details such as GTM strategy, direct sales, pipeline building strategy, team structure, incentive programs, or key decisions that need to be made along with you as the CEO of your company for the next 100 days.
What kind of decisions would you make so that the sales and marketing teams can work together in harmony?
This question seeks answers on forming joint goals between sales and marketing on pipeline, discovering leads and delivering to sales teams, modeling to evaluate the lead, creating the rules to operate joint campaigns, and more. Those without actual VP-level sales leadership tend to provide very abstract answers.
We currently do not have a Customer Success Team, but what would the goals of a CSM team that would be managed by the sales team be?
Candidates with multiple past VP of Sales experience understand that contracts are not the end of sales but rather the start, thus as opposed to discovering a completely new client, upselling an existing client to heighten expansion is a more efficient method of growth.
If pre/post-sales engineering support is necessary, what part of our company’s product would it pertain to (based on your understanding), and how do you expect to operate this in the future?
Sales team needs outstanding technical support team. This question can show a clear level of understanding of the pre/post-sales tech support organization that pursues this not as a part of the engineering team but as a part of the client servicing team.
If there is a team member you want to bring here right now, who would it be?
Even if specific names or profiles are not stated, you can hear descriptions and deduce the qualifications of great talent based on the VP candidate’s explanations and consider how this description is in line with your management philosophy.
So far we have featured with the roles, recruitment channel, and interview questions for the VP of Sales at a post-series A SaaS startup. Since this is based on the experiences shared by me and my networks with similar experiences throughout the Silicon Valley and APAC, it does not fully represent the VP of Sales recruitment situation of all B2B SaaS startups in the world. Yet, we hope that we can be a helpful data point for you to refer to during decision-making.