When to Hire a VP of Sales & What to Consider
David Ives
David is a partner at True Search, an innovative executive search firm. In this post we asked David to talk about the unique challenges and best practices to grow your executive team in the oh-so-important sales area.
As the CEO of a young series A company, you know the product inside and out and can articulate your vision. You give the best demos, can drive the right priorities from customers and prospects back to product, and you gain invaluable learnings from being in front of customers and prospects. Your organization is growing quickly. You have fresh capital, new investors to work with, and hiring needs across the board. You suddenly have new demands on your time that will only get more intense as the company matures. With all of this comes the tricky part: you need to be CEO full time.
You’ve reached the point where you need a Sales leader to support continuing growth but what kind of leader do you need? Here are a few questions to ask yourself.
VP of Sales or “Player Coach?”
We get this question all the time. The answer lies within your growth plan — does it allow a player coach model to really scale? Typically, the existing sales team is small (2–4), so a VP level hire can feel like overkill. A player coach seems more natural and affordable in this situation, but by the time the player coach type has spent 6–12 months cementing themselves and has really started growing, they are hitting their limit. Team size will probably be expanded to 4–7, and support staff will be needed (sales ops, SEs, SDRs, etc.) so the coach and manager side of the role will be paramount. Our advice is to know your growth plan and be sure the player coach model can really scale.
Enterprise or Velocity Model?
Skew towards a VP earlier if you have an Enterprise business that allows you to get away with more of a Director level hire in a velocity model. Also think about your customer profile and your average ACV. Selling higher ACV products to Enterprise buyers, on balance, requires more complexity. There are more buyers in the process, the sales cycles are longer and acquiring these customers at scale is harder. Conversely, a velocity or SMB Sale is inherently more repeatable. It is more about building the “machine.” When Sales cycles and ACVs are lower, reps tend to skew younger in age, CAC is generally more predictable and known, and you can do a lot with a little as you scale. Essentially, the cost model is more predictable earlier in your life cycle.
Builder or Scaler?
Be careful not to hire for two to three years down the road; instead, look at the next 24 months. We often see CEOs who want someone who can take them from $2m-$5m ARR to $50m ARR. That would be amazing and is absolutely something to strive for, but it is a flawed search strategy. There are distinct differences in the skill sets required for a “builder” ($2m/$5m-$20m ARR) and a “scaler” ($20m-$50m ARR). More often than not, you will have two different VPs of Sales, or a VP of Sales and a CRO, in your company journey. A “builder” will be closer to the team, the customer, the messaging and developing the culture.
What does marketing & top of the funnel look like?
It’s imperative to make sure your marketing engine can support a VP of Sales. You are not hiring in isolation. Marketing will be stress tested by a new VP of Sales–they will want to know the quality and quantity of MQLs being created, what the existing team’s talent looks like, and what kind of investment/budget is in place. Sales in the modern SaaS world is a team sport, so your new VP will want to ensure a plan is in place for top of the funnel.
Is a VP of Sales too big for our stage?
Hiring a VP of Sales early can feel daunting on a few fronts. One of the best moves you can make is preparing your exec and revenue teams as hiring a VP of Sales is expensive. They will almost certainly be your highest paid employee. We have seen this cause agnst for CEOs, in particular because they worry about the optics to the rest of their exec team. It’s imperative to confront this head on and accept it because there is a clearly defined market for a VP of Sales and it’s out of your control. Although expensive, you need to explain to your team that half of their compensation is variable, or based on performance. No other leader or position at the table has this type of risk quotient in their compensation.
Secondly, you need to communicate your “why” for hiring this new role. Clarify how it will benefit the team. Oftentimes, early Sales reps have a large sense of responsibility for the initial growth, so becoming layered and losing direct access to the CEO can make them feel a bit deflated. The important points here are development and mentoring. Let your team know that you are going to hire the right candidate who will teach and develop them in ways you cannot as you have too many competing responsibilities and are not a sales expert.
Most of us have shifted into more of a “war time” operating rhythm at the moment; however, it is important to remember we will return to a more offense-oriented approach eventually. With that in mind, being mentally prepared for bounce back and expecting growth to continue within your company is key to continuing success. Having a strong team behind you will be what gets you there.
### David Ives is a partner at True Search, an innovative executive search firm.
