Salesforce asked Jason M. Lemkin of Storm Ventures to present on How to Hire (and if need be, Fire) Your First VP of Sales

1. When to Hire (and Fire) Your First
VP of Sales
Or Why Up to 70% of First VP Sales Don’t Make it 12 Months
Jason M. Lemkin, Managing Director, Storm Ventures;
Past Founder/CEO – EchoSign / VP Web Business Services – Adobe
@jasonlk

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3. Jason M. Lemkin
Jason M. Lemkin,
Managing Director, Storm Ventures;
Founder/CEO – EchoSign/Adobe;
SaaStr
@jasonlk

4. Jason M. Lemkin
Jason M. Lemkin,
Managing Director, Storm Ventures;
Founder/CEO – EchoSign/Adobe;
SaaStr
@jasonlk

5. The First “VP Sales” Probably Has to Be You
You Have to Sell It Yourself First. And Then Hire 2+ Reps.
You
You + 2 Reps
Hire VP Sales

6. Top 5 Things a SaaS VP of Sales Really Does
Note Which One Comes Last
 #1 Recruiting the Team
• You’re going to need a team, and a good one. Quickly.
• Player-Coach sounds great -- but at best, will be quickly obsolete as a role.
 #2 Backfilling and Helping His/Her Sales Team
 #3 Sales Tactics
 #4 Sales Strategy
 #5 Creating and Selling Deals Him/Herself

7. When to Make The Hire
Immediately - Once you Have a Repeatable Process
 Before a repeatable process = exercise in frustration
 But just as importantly – if you wait even one month
after you have Initial Traction – you are wasting time
 Wasted time = wasted leads & lost 2nd order revenue,
delay in getting to Scale

8. Change Your Thinking: A Great VPS is Accretive
 A mediocre VPS is a cost
center. Feels very expensive.
 But a Great VPS is Accretive
 Key: Great VPS Raises
Revenue Per Lead
Source: Boston Search Group 2011
http://bit.ly/v2Sbgi

9. Ways Your VPS Will Increase Revenue Per Lead
 Ask.
For the Most $$$ Per Lead.
 Close.
Closing is an Art – and a Science.
 Hire.
Better Than You.
 Scale.
More Reps Than You, More Quickly.
 Position.
Give Prospects Right Context.
 Go Upmarket.
Drive to Highest Practical Deal Size
 Better.
Great VPS Makes Your Product Better.
 Fun.
Great VPS Makes It Fun.

10. The Toughest Hire of All in SaaS
 When
• Too Early: Manager, Not a Magician
• Too Late: Can Take 20 Months!
 Who
• Been There, Done That – Almost Impossible
• Too “Heavy” a Hire? Or One Without the
Full Experience?
 Why
• To Take Things To the Next Level; To Scale
• But Usually NOT to Get Sales Going

11. The Toughest Hire of All in SaaS
Hire Wrong, and You’re Set Back a Year
 A Bad Hire Can Be Far Worse Than No Hire at All – It’s True
 A Bad Hire Isn’t Just Hard Costs – It Involves Huge Soft Costs As Well
• A B-level VP Sales Hires a B-/C+ Team Under Him/Her
• Revenue Per Lead can actually go down dramatically under a mediocre VPS
• Wastes Precious Leads, Wastes Time, Loss of Second-Order Revenue
• You’ll Lose a Year – At the Worst Possible Time
 A Bad Hire is Often Made Just as Things Are Taking Off
• So Most Costly Time at All to Make a Mistake

12. The Toughest Hire of All in SaaS
My Year of Hell. But Then – Right VP Sales -> Reignition.

13. The Costs of a Bad Hire
 Leads Doubled in Year of Hell
 Yes, We Grew. But, Revenue
Per Lead Declined.
 Whose Fault?

14. Your VPS is Also Feeding Second-Order Revenue
Wrong Hire = No Second Order Revenue, Not Just Suboptimal Sales That Year

15. How My (Real) VP Sales Doubled Sales in 90 Days
Hint: It Wasn’t New Prospects or Customers.
 Immediately Upgraded the Team to Proven Closers. The First
Week.
 Got the Most Out of the Team He Inherited – And Got Rid of
the Ones That Weren’t Working.
• 1 + 2 alone Doubled Our Revenue Per Lead.
 He Didn’t Even Attempt to Do It Alone.
 He Ended Pipeline as a Metric – And Any Real Credit for It.
 He Embraced Competition.

16. Different Stages of VPS. Often, a Different Hire.
 Hard to Get Stage Perfectly
Right in Early Days
 Few Truly Scale Across > 1.5
Stages. Hence, Most SaaS
Cos. End Up with Multiple VPS

17. Key Screening for VPS
 Sold at Next Year’s Target ACV – Controls
for a Lot of Variables
 Sold at Next Revenue Stage (ARR)
 Similar Competitive Selling Background
 Outbound vs. Inbound Ratio
 First 3 People You’d Bring With You
 Less Important: Domain Expertise

18. How to Know If You’ve Made a Mistake
 You Should Know Subjectively In Just a Few
Months – Just 50% of The Way Through
Your Average Sales Cycle
 Numbers Should Increase in 1 Sales Cycle –
with Keen Focus on Revenue Per Lead
 First Few Hires Should be Clear Upgrades –
and made quickly + seemingly effortlessly

19. So As Hard As It Is – You Can’t Settle
 It May Be Tempting to Hire a Placeholder
VPS – especially if You Haven’t Done It
Before
 But You’ll End Up With a Crummy Team,
and Lost Opportunities.
 Start Early. Start Now.

20. When It’s Good – It’s Really Good
 Great Sales Teams Have Low Turnover –
They Want to Stay Together
 Great Sales Teams Feed on Themselves
 Great Sales Teams Energize the Rest of the
Company
 You Just Need a Great VPS

21. All about Jason M. Lemkin
2x Founder/CEO Selling to the Enterprise.
Managing Director, Storm Ventures.
 Co-Founder/CEO EchoSign, acquired by Adobe, 2000+ 5-star
reviews on AppExchange
 Grew business from $0-$100m+ ARR in ‘13 at EchoSign + Adobe
 Managing Director at Storm Ventures: First/Early Investor in
Enterprise start-ups, including Marketo, MobileIron, EchoSign,
Appcelerator, etc.
 SaaStr social community – 400k+ views a month on web + Quora