Jason M. LemkinJason M. LemkinSaaStr

Managing Director, Storm Ventures; Founder/CEO – EchoSign/Adobe;

@jasonlk

saastr.com & quora.saastr.com

SaaStr

Managing Director, Storm Ventures; Founder/CEO – EchoSign/Adobe;

@jasonlk

saastr.com & quora.saastr.com

When to Hire (and Fire) Your First VP of SalesWhen to Hire (and Fire) Your First VP of Sales

Or Why Up to 70% of First VP Sales Don’t

Make it 12 Months

Or Why Up to 70% of First VP Sales Don’t

Make it 12 Months

All about Jason M. Lemkin

2x Founder/CEO Selling to the Enterprise.

Managing Director, Storm Ventures.

Co-Founder/CEO EchoSign, acquired by Adobe, 3000+ 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 – 700k+ views a month on web + Quora

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

Ideally, Have 2 Reps Doing Well Before Hire VPS

Otherwise, You Won’t Know Yourself

Don’t Want to Hire a VPS Too Early• Too Expensive, Too Confusing

• You’ll Hire Wrong Type of VPS

A/B Test Will Also Help You Learn

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

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

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 2011http://bit.ly/v2Sbgi

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.

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

The Toughest Hire of All in SaaSHire 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

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

The Costs of a Bad Hire

Leads Doubled in Year of Hell

Yes, We Grew. But, Revenue

Per Lead Declined.

Whose Fault?

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

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.

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

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

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

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.

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

Q&AQ&A