et's face it, did your startup truly require a VP of Sales half a year ago?
If you're a CEO or founder, chances are you've been assuming the unofficial role of VP of sales, tirelessly sharing and promoting your vision for months, if not years.
However, if you're achieving success while still shouldering the entire burden yourself, or if you're juggling the responsibilities of managing a team of sales representatives while simultaneously leading the rest of your company, you might be spreading yourself too thin. This can leave you deeply immersed in the day-to-day operations, preventing you from strategizing and fostering substantial growth.
Alternatively, you may have fallen into the all-too-common trap that many founders find themselves in—hastily hiring a VP of Sales in the past, only to discover that it didn't work out. If you find yourself in this predicament, you're likely far from eager to endure that stressful experience again.
Trust me, I understand your sentiment.
Rushing through this process can result in significant financial costs, resource wastage, and headaches for your startup. Moreover, if you don't get it right, it could set your business back by months, or even years.
And frankly, no one has the time or patience for such setbacks—especially not your startup.
So here's the fantastic news: In this comprehensive guide, I'll provide you with all the essential information you need to know about recruiting a VP of Sales for your startup.
You'll discover the ideal timing for bringing in a VP of Sales and understand the significant repercussions of making a poor hiring decision. Then, you'll navigate through my tried-and-true six-step approach for securing the most qualified VP of Sales for your startup.
Leverage this valuable insight to your advantage, and you'll successfully master this process from the very beginning, hitting the ground running. Isn't that what you're aiming for?
Undoubtedly, it is!
Let's embark on our journey by addressing the most critical question at hand:
When is the Right Time to Hire a VP of Sales for a Startup?
I know you’re here to learn how to hire a VP of sales for your startup. But first I have to ask, Are you sure this is the right time to do so?
Many startups and Founders I work with *think* it’s time to hire a VP of Sales. They hope doing so will take a huge load off their shoulders and bring in more revenue for their startup.
But that’s only true if the timing is right.
What Happens When You Hire a VP of Sales Earlier Than You Need To
If your startup lacks a consistent revenue stream and you make the decision to hire a VP of Sales at an early stage, it can lead to the following consequences:
Squandering valuable capital: A VP of Sales is not someone you hire solely to kickstart your sales efforts. If you fail to involve them in strategic decision-making and treat them as an overqualified sales representative to handle menial tasks, it will turn out to be an exorbitant hire. Consider this: The average salary for a startup VP of Sales begins around $185,000 and can exceed $250,000 when accounting for additional incentives, equity, benefits, bonuses, and more. In contrast, an average salesperson's salary is a fraction of that amount. Therefore, investing in additional salespeople before committing to a VP of Sales could potentially save your company a significant amount of money.
Impeding sales team growth: A VP of Sales should focus on establishing a structured framework and efficient processes, while the day-to-day sales operations are better handled by your sales team. If you burden your VP with individual sales responsibilities, it will hinder progress rather than improve it. As the saying goes, "if you're too entrenched in the business, you can't think strategically about the business." That's why you should set higher expectations for your VP of Sales, considering that sales is the lifeblood of your startup. Without sales, there is no business. The responsibilities of a VP of Sales should include:
Working with Marketing to understand the best GTM (go to market) strategy
Understanding the post-sales buyer journey to understand which types of buyers are at the highest risk for churn
Understanding why revenue targets are missed and custom-crafts a plan to address the problem at the root
Creating a repeatable, measurable, scalable process to engage the buyer where they are versus where you want to force them to be
Recruiting and hiring the best salespeople to do the right work for your stage
Helping them scout, engage, and close better deals
Build, reinforce, and strengthen your culture
Scaling your sales team for growth
You can see that I didn’t mention going out and selling in those responsibilities. (By the way, I also don’t recommend hiring a player coach either since this can also backfire big time even though many people *think* it’s a good idea that will save them.)
So if you’re hiring this person to make sales calls while trying to lead a team at the same time instead of strategically growing your business, it’s not going to work out so well.
Keep in mind, just because hiring too early isn’t suggested doesn’t mean you should wait until it’s too late either.
Hiring Too Late Won’t Help This Problem Either
Waiting indefinitely to hire a VP of Sales for your startup is not always a prudent strategy.
It's a common occurrence for founders to take on the entire sales responsibilities themselves. I understand the rationale behind it—you know your product better than anyone else, right?
However, what you may fail to realize is the significant trade-offs you make by dedicating yourself to sales (not to mention the amount of time it truly consumes).
Let me illustrate with a recent example: I recently collaborated with a founder who, like many others, single-handedly shouldered the burden of securing enterprise deals and handling major opportunities. The issue arose when he had to manage this in addition to leading his startup, overseeing a sales team of 10, and managing the customer service team.
During our conversation, he openly admitted that he recognized the need for assistance, particularly because he would have promising meetings, only to let crucial details slip through the cracks shortly thereafter, effectively squandering the positive momentum he had gained.
This situation had several detrimental effects. Firstly, as you're likely aware, enterprise deals often afford you only one chance, and if the initial meeting doesn't go well, that door is unlikely to reopen.
Secondly, consider the example it sets for your team. If it becomes acceptable for significant deals to fall through the cracks, it inadvertently sends the message that smaller matters can be neglected as well. The obvious answer is no, but unfortunately, this scenario tends to occur all too frequently.
Furthermore, think about the impact on the buyer's journey. How likely is someone to convert if they are treated in such a manner? The chances are significantly diminished.
This serves as a prime example of being too immersed in the business to think objectively about it.
In reality, overseeing your sales team will divert your attention away from critical aspects of your business, such as innovation, improvement, and establishing strategic partnerships that only you can handle. Spreading yourself too thin by attempting to accomplish everything simultaneously decreases your chances of success across the board.
So now, not only are you investing time in sales (which may not be your forte in the first place), but you are also compromising the quality of your product and losing ground in the market.
Again, this is not a reflection of your abilities; it's simply the reality of the situation.
However, consider this: Your competitors are likely not operating in the same manner.
If they have a dedicated sales team and a competent VP of Sales, their founders can direct their undivided attention towards product development.
Just imagine the progress you could make in the coming weeks and months if you had that opportunity. I bet you would be lightyears ahead of where you currently stand.
Bringing in an expert who can effectively fulfill the role of VP of Sales while allowing you to focus on your strengths is a win-win situation for everyone involved.
Now, you might be wondering: "Okay, great. Don't hire too early or too late, got it. But when will I know the right time?"
The Right Time to Hire a VP of Sales for a Startup
These five signs point to the right time to hire a VP of sales for your startup:
1. It’s bigger than you. If you’re a Founder, you have a plethora of competing priorities. If you’re leading the sales team and notice important details like hiring, onboarding, process, deal management, coaching, and strategy slipping through the cracks, it’s a great signal to bring in a VP of Sales.
2. You know your market and have a well-defined value proposition. If this is something you’re still trying to figure out, you’re setting up your startup and your VP of Sales for failure… wasting a lot of money and priceless time while making zero headway.
3. You have sales reps in place, repeatable revenue, and a process to back it up Your small sales team should already be in place and bringing in revenue. Your VP of Sales should be able to step in, hone and refine the process, embrace hiring and onboarding, and lead the team to realize sustainable, repeatable results.
4. You’re ready to make the investment to scale. Having at least $1M in ARR is a good benchmark to consider when it comes to making significant investments, like hiring a VP of Sales.
5. You’re ready to give your new VP of Sales autonomy to build. The number one request on the “must have” list we receive from VPs in our hiring process is to truly have a seat at the executive table. Founders, you must be comfortable letting go of the reins so this key person can leverage their expertise to strengthen and scale your startup
6. Your startup is prepared to jump to the next level. This is where perception versus reality is table stakes. Your startup must be in a position to scale. If your VP of Sales does their job well, you will be rolling in sales while seeing major growth. Are you ready for the influx?
To determine the optimal timing for hiring your VP of Sales, assess the repeatability of your business operations. If you find yourself relying on hope rather than tangible business milestones, it's advisable to focus on refining your sales team and processes first.
Making a mistake at this crucial stage is the last thing you want to do, particularly when you consider the significant costs involved.
Pro tip: Maintain a realistic perspective regarding your startup's present situation and immediate future. Many founders I've spoken to who have suffered the consequences of a misalignment in hiring are those who hired based on their envisioned future state rather than addressing their current needs. Keep in mind that the tech industry offers a wide array of over 48 different types of VP of Sales roles. Therefore, ensure that you hire according to the specific requirements of your startup's current stage.
The Costs of Hiring a VP of Sales Who Doesn’t Work Out
In this guide on the cost of a bad hire, I shared a pretty alarming stat discovered by Jason Lemkin:
“70% of Saas First VP Sales don’t make it to 12 Months. It’s one of the most common, and also most devastating mishires in startups.”
Welp.
Imagine paying a year’s salary and the expense of having the wrong person in seat only to learn that you have to go right back to the drawing board and start the hiring process all over again.
Headache and salary aside, there’s even more money wasted before your mishire hits their first work anniversary.
According to Dr. Bradford Smart, startups could lose upwards of $500k in compensation, or anywhere from five to 27 times the amount of someone’s salary:
Need a minute to catch your breath?
While those numbers may be shocking, they’re not out of the ordinary. When you further break down those numbers, you’ll see the real costs of hiring the wrong VP of Sales include:
Now you see why it pays to get this right the first time around?
I thought you would.
So let’s say you have all your ducks in a row and all the right benchmarks mentioned earlier in place. What’s the game plan?
I’m so very glad you asked.
6 Steps to Successfully Hiring a VP of Sales for a Startup
You’re finally ready to hire a VP of Sales for your startup, kudos! Just follow these six steps to make sure you hire the best fit for your product, team, and future goals:
Step 1: Slow Down to Go Fast Later… Determine What You Need
Your first step is to figure out what you need your VP of Sales to do for your startup.
That starts by looking at what you already have in place.
Do you have one or two salespeople exceeding expectations, but working at max capacity? Do you need to hire more to follow suit?
Or do you have a large sales team that needs to sell more or work out the kinks of the sales process?
Or are you trying to tackle a new market altogether and need the right team and strategy to bring that plan to life?
The VP of Sales can do anything from strategy to process to recruiting and hiring to training and managing.
So it’s up to you to define exactly where your startup needs help most. You may need a leg-up in all of these areas or just a select few.
Whatever the case may be, specificity is your friend. This allows you to craft a job ad that piques the interest of someone who not only checks these boxes, but is eager to accept the challenge.
The power of a journal is an excellent way to make sure you don’t leave the mission-critical details behind. Jot your thoughts down on where this person is needed most before moving on to the next step.
Step 2: Decide What a Good VP of Sales Looks Like For YOUR Startup
I can’t emphasize this enough. This is the biggest area where Founders get it wrong and chase the shiny objects that are irrelevant to their task at hand. On top of figuring out why it’s time to hire, you must hone in on where you need help, while pinpointing the ideal qualities that would make someone successful in this position and with your team.
The best way to do that is to create a hiring scorecard, which I talked about in great detail in that article I just linked.
To summarize, this effective tool arms you with an unbiased system to evaluate candidates based on the same standards and qualifications you’re looking for to ensure alignment on the things that matter to your startup.
It helps you narrow down candidates who fit the bill while weeding out those who fall short. With a clear picture as to what and why, drastically reducing your margin for hiring error.
In building your hiring scorecard, you’ll gain clarity to figure out exactly what you’re looking for and what will make someone a perfect fit for your needs. Remember, when you’re clear, everyone else around you is clear. And when you’re confused, well, how on earth can anyone else around you be clear?
Clarity is no joke and it’ll take some work on your part to build your hiring scorecard.
I promise, the payout is worth it. Talk about some serious social proof from one of our most recent clients. They had a flimsy hiring process before we worked together and had never used a scorecard before:
Imagine getting this hire right the first time and catapulting your startup to the next level because you did so.
You’re imagining yourself feeling pretty awesome, right?
Because you will be.
So here’s a peek at some of the questions you’ll be answering as you create your hiring scorecard.
You’ll also want to think about must-have and must-avoid traits that this person should possess.
Answers to these questions can help you uncover your must-haves:
Do you want someone who’s already comfortable leading sales teams, or would you be okay with this being someone’s first time doing so?
How much experience do you want them to have at this level?
Do you want someone who’s worked within startups before? If they have prior experience, what stage was that startup in?
Feel free to bounce around other questions with your team to determine your specific must-haves.
Answering the next questions can help you narrow down your absolutely-nots, or traits you don’t want your new hire to have. Someone with these traits may hurt your ability to grow and thrive as a company:
Do you want a VP of Sales from a big, established brand who may be good with steady growth, but doesn’t know how to build or is unable to figure it out?
Do you believe there’s a minimum amount of experience required so you don’t have to hold their hand?
Are there some preferences, such as being unwilling to work in the office or travel, that just don’t jive well with your team?
If you’re having a hard time coming up with a list of absolutely-nots, just think about all the mishires you’ve encountered before. What irked you or caused issues?
When you put this into a real-world perspective based on your company’s history, you’ll have less trouble ID’ing potential bad apples.
So once you determine these traits and answer those questions, you can build out your hiring scorecard with confidence.
In that guide, you’ll find the exact hiring scorecard I use, which will give you inspiration and direction for how to create yours.
You can then take everything you outlined in your hiring scorecard to build out the perfect job ad.
Step 3: Create a Detailed Job Description
Crafting a job description will be much easier after you create your hiring scorecard. That should contain all the traits, qualifications, and experience you’re looking for, and so should your job description.
To create a job description that lures in the best candidates:
1. Be transparent about your company needs and who will be successful in this role. Cut it with jargon and platitudes, this is not the time to sugarcoat things and paint a picture of a well-oiled machine if that’s not what you have.
So get transparent about what you need this person to do and describe your situation in detail — the good, the bad, and the challenges you’re facing. This ensures only the most qualified candidates have a clear understanding of what you need, want, and why. This automatically sets you apart from the rest.
The goal here is to describe:
What your current situation looks like
Your future goals
Your new hire’s responsibilities and your expectations
The skills/qualifications/experience your ideal candidate possesses
How you’ll define success in this role in 3 months, 6 months, 1 year, etc.
Pro tip: if hiring more women is important to you, this free gender decoder tool has your name written all over it. Words matter, job descriptions are no exception to the rule.
2. Suss out and clearly articulate your startup’s story, mission, values, and company culture. Alignment is everything. Your best hire should be aligned with these in practice, not theory. Otherwise, you run a big risk of living the statistic so many Founders face to lose this key hire within the first 18 months.
Include specific details about how your employees embody your startup’s unique culture while giving them a front row seat at what it’s really like to work with you and the team. How are you really managing working in-house, remotely, or a hybrid mix of both?
From there, move on to:
Step 4: Use a Hiring Scorecard to Make a Confident Decision
It’s time to put your scorecard to use once again! This time, you’ll use it during every interview to evaluate each candidate in an unbiased way within 24 hours of each interview.
Instead of being seduced by a smooth talker, for example, you’ll be taking the guesswork out of the equation to accurately gauge whether someone will be a good fit for the needs of your startup.
It’s just like the Olympics — sans sparkly leotards and patriotic uniforms.
As you work through the interview process, you’ll be able to effectively rate each candidate on a scale of one to ten in each category that’s important to your startup. At the conclusion of the process, you’ll have an easy way to clearly make a hiring decision.
Step 5: Test the Waters
It’s a smart idea to let your first-choice candidates spend some time with your team before you pull the trigger and offer them the position.
I’m not suggesting that you carve out a full day of work for these potential hires.
But taking a page out of the “Real World Playbook” to see what happens when you stop being polite and start getting real to get as close to what it’s really like to work together is a lifesaver… for both parties involved.
Some ideas to do this well:
Have candidates attend a brainstorming session. Your potential hire will get a better feel for how the team interacts and works together. If they feel comfortable, encourage them to share their ideas or even illustrate their approach. This should give your team a taste of what may come if you hire them.
Invite your top choice candidates to meet with the board.
Allow candidates to see where your bodies are buried. Share your real challenges, data, obstacles, and failures. It’s a “sweaty palms” moment, but people crave understanding the reality of your startup and what they’re really walking into. It also reinforces your leadership when you can shoot a person straight to get to the brass tacks together of the task at hand… talk about showcasing your ability to walk your talk as a Founder to give them a seat at the table?!
Step 6: Make the Hire and Set Them Up For Success
Time kills deals as they say in sales. Hiring is no exception to this rule. When you interview someone that scores well, has the ability, desire, and is leaning into the process, HIRE THEM. Embracing an abundance versus scarcity mindset in the hiring motion is your best friend and secret weapon to scale your startup with the right team, doing the right work, in the right roles.
That last part doesn’t come naturally for many Founders, and many startups mess this up more times than not.
To put your new hire in a position to succeed, you need to create an onboarding experience that goes above and beyond. And that means rolling out the red carpet. One of my favorite ways to think about this is the experience you’d get at the Four Seasons concierge versus the check in counter at the Motel 6… strive to be the Four Seasons.
Show them how much you value them and respect their abilities. That you heard them and are setting them up for success. This is the time to back up your words with actions to create a plan where they can make a significant impact on your startup and how excited you are to achieve that with them.
To make your onboarding experience flow smoothly:
Make sure all of the technology and equipment they need to be successful is ordered ahead of time to have set up and ready to go for the first day. Make sure they have access to Slack, your CRM, drives, security clearance, email, etc. and they’re ready to go.
Have your documents ready to go ahead of time. There’s nothing worse than wasting that first day of excitement filling out a mountain of paperwork.
Make your new hire feel welcome. Have an agenda for week one and include other executive and team members they’ll be working with before they start. We recently had a client have a custom illustration made and sent the week before he started… talk about making an indelible impression to make the person feel warm, fuzzy, and welcome!
You’ll build a solid relationship from the start, making it more likely to retain them for the long haul.
Give them the lay of the land. Policies, expense accounts, in-office expectations, team welcome, travel, tools, process, how meeting agendas get communicated, who is responsible for what, an executive welcome wagon, etc., tour of the office layout, the tools you use, your sales process, a typical meeting agenda, etc. Once they have an idea of what they’re getting into and how it works in real life, they’ll be more excited to jump in and hit the ground running.
Final Thoughts On Hiring a VP of Sales for a Startup
If you’ve made it to this point, you’re already ahead of the pack, and now have everything you need to hire a VP of Sales for your startup. More importantly, you know how to do this right the first time.
Rather than hiring too early or too late, you’ll be one of the very few startups that know when you’re in the sweet spot. You also have a scorecard to help evaluate and choose the right person for the job instead of falling for a shiny object that doesn’t live up to the hype.
Follow the tips and steps in this guide, and you’ll hire a VP of Sales who fits with your startup, exceeds expectations, and sticks around beyond the next milestone.
I know it’s possible because I’ve seen it firsthand with my clients. And I can’t wait to see the process work for your startup too!