The Ultimate Guide to Hiring a VP of Sales for Your B2B Startup: From Early Stage to Scale (Part-1)
As a founder/CEO of a B2B startup, you understand the importance of hiring the right VP of sales to drive revenue growth and increase market share. However, finding the perfect fit for your company can be daunting. Should you go for a seasoned sales leader with a track record of success or someone who can help you build a sales team from scratch? What questions should you ask during the interview to ensure you make the right choice?
Before we start, it’s important to recognize that a VP of sales can make or break a B2B startup’s success. Hiring the wrong person can result in missed opportunities, lost deals, and a lack of revenue growth. On the other hand, a great VP of sales can help you scale your business, build a strong sales team, and increase your customer base. That’s why it’s crucial to take the time to find the right person who not only has the necessary skills and experience but also fits in with your company culture and shares your vision for the future.
Your VP of sales is an important pillar in your overall GTM leadership team. Your VP of marketing and VP of product are also part of that. Aligning the goals and incentives across the team is crucial for overall business success.
There are different stages of a SaaS business, each requiring a different type of VP of sales. Finding a VP of sales with experience in your business’s specific stage is important. The expectations and priorities for the VP of Sales will vary depending on the stage of the company, and hiring the wrong person can result in missed opportunities and lost revenue.
The main stages of a SaaS business and the kinds of VP of sales that would be suitable for each:
Early-stage ($0 — $1m ARR): The founder/s will likely be the primary salesperson at this early stage. You must wear multiple hats and hack your way to get initial traction for your product. These initial engagements with customers are expected to help you fine-tune the messaging and offers to fit the demand in the market better. There is no better person to do this work than the founder/s themselves. The future VP of sales you will hire will depend on this initial experience and knowledge to build the sales machine the business needs.
Build the machine ($1m — $10m ARR): Although your business has an ARR of about $1m, let’s be honest, you do not have a sales operation machine that can take you to the next level. Until now, you hacked your way to get initial traction and refine your messaging and product based on that. In this stage, the focus shifts to building a scalable sales process. The VP of sales should be responsible for developing a sales strategy that can be replicated, creating a predictable revenue pipeline, and establishing sales metrics to measure success. The VP of sales should also be able to build and manage a high-performing sales team, including hiring, training, and coaching sales reps. It would be best to have a VP of sales who can scale your sales team and processes from the ground up. This person should have experience building and managing a sales team, implementing sales processes and systems, and creating a predictable revenue pipeline. At this stage, you probably do not want to hire a person who came from large corporates or managed over $100m in ARR. It would be best to have a hands-on builder who created a machine from scratch and took it two levels up.
It is also important to mention that a VP of sales that comes from your industry should have an advantage over others. As this individual will need to hire and train the rest of the team, you better have a leader that knows the market you are targeting inside-out already and has business relations with potential customers. Hiring an outsider, at this early stage, will just add more risk to the overall journey.
Make it repeatable ($10m — $25m ARR): You probably have a sales team of over ten people at this stage. You defined some processes and have seen success. Your sales team learned how to hunt deals, and hopefully, your customer success expanded it further. You have customers, but not many. You get some qualified inbound leads, but not enough to hit your quota, and your outbound SDRs and AEs are working hard, but they are individual contributors, not a team. You closed some excellent deals but not big ones requiring experience managing complex sales cycles, including navigating procurement and legal processes. You focus on a single region or vertical but not seeing much traction beyond that.
How do you repeat previous success? How do you fill your pipeline with many more opportunities? How do you repeat customer wins? How do you increase sales capacity and make them productive to hit the target?
Now you need a VP of sales who can focus on creating a machine that has repeatable outcomes. It is predictable, not chaotic or random. You can set a revenue goal, get a sales plan and by the end of the quarter you can be proud of the team that hit their target.
At this stage, the focus is on building a scalable and repeatable sales process that can support the continued growth of the business. The ideal VP of sales for this stage will have a strong track record of driving revenue growth and building high-performing sales teams in a SaaS B2B environment. They should have experience leading a fast-paced, high-growth company and be comfortable operating in an ambiguous environment.
Accelerate velocity efficiently ($25m — $50m ARR): Growing your business efficiently is the name of the game now. Spending $1 to get $0.5 back isn’t the game anymore. You probably did this earlier, but now it’s time to look at your unit economics and do things better.
One metric to benchmark is your S&M expense from the total ARR. At this stage, it should be 50%, not %150. Your CAC should also trend down, not up.
You need to demonstrate efficiency, scalability, and, most importantly, velocity in acquiring more customers, so you need a different leader. At this stage, the focus is on accelerating sales velocity and driving efficient revenue growth through strategic sales initiatives. The ideal VP of sales for this stage will have a strong track record of driving revenue growth and building high-performing sales teams in a SaaS B2B environment. They should have experience scaling sales operations and building a sales organization capable of meeting aggressive revenue targets.
The dynamics between your GTM leadership team are very important. It is common to see friction between your marketing and sales leaders as they need help to scale the business. You would like to avoid the costly conflict between marketing and sales, or at least minimize it as soon as possible. A productive collaboration between the leaders dramatically contributes to the business’s success.
Scale the sales machine ($50m — $100m): The journey continues. Now you have an efficient sales machine that operates at a high velocity. You are starting to feel that filling the pipeline with deals that can get you to the target revenue is getting harder and harder. Is your TAM not big enough as you thought initially? Did something change? Or are you just doing the same thing all the time and forgetting to innovate, have strategic partners, or expand beyond the regions and verticals you used to sell into?
At this stage, the focus is on scaling the sales machine to drive continued revenue growth and establish the company as a market leader in its category/industry.
The ideal VP of sales for this stage will have a proven track record of scaling sales operations, building high-performing teams, and driving revenue growth in a SaaS B2B environment. Have a strategic vision for scaling the sales machine and driving revenue growth while staying ahead of the competition. They should be able to identify new revenue opportunities and develop strategies to penetrate new markets.
Buyer persona
For each stage mentioned above, you should also consider a VP of sales experienced in selling to your target buyer persona. Most importantly, the ACV range and customer type (consumer, SMB, mid-market, Enterprise). A $X,000,000 ACV sale process differs significantly from $X00,000 or $XY,000. If your VP of sales achieved excellent results in selling to SMB, that is very different from winning deals at the Enterprise — a completely different sales cycle and dynamics.
Aligning the buyer persona profile, ACV, and customer type with the experience of your VP of sales candidate is as important as matching the profile to the stage of the business.
Last but not least, culture fit. Maybe one of the most important soft measures to look after. If you feel the candidate’s business culture and behavior is different from the one you have or would like to create, at your business, then skip it. People will not change, and it will not work for long without cultural fit.
Overall, four stages of ARR x 3 ACV ranges x 3 customer types = at least 36 types of VP of sales to choose from. No matter how exciting a candidate seems, ensure you have the right one for your business.
Hiring the right VP of sales for your B2B startup is a critical decision that should not be taken lightly. It’s important to understand the different stages of a SaaS business and the type of VP of sales that is suitable for each stage.
Now that you identified what type of VP of sales you need, what should you look for during the interview process? What questions to ask and what to expect in the answers?
Continue to Part-2 of this story to read more about the interview stage in the process.
Written by: Yuval Ben Itzhak
