When you welcome a VP of Sales to join your startup, they’ll be goal oriented and looking to set targets and timelines. They’ll be keen on extending the scale of their remit, developing relationships with the team and setting out to be with you on this mission for the next 2-3 years.
Sounds perfect, right?
Yes, for developed businesses. For Pre-Seed to Series A, often not.
In Pre-Seed, Seed and Series A companies there is a danger in recruiting your VP too early in your startup journey. This can be a costly mistake to make with the average VP of Sales costing a B2B tech company £180,00 per year. Moreover, the majority of SaaS first VP Sales recruits don’t even get to celebrate their first anniversary.
– Jason Lemkin
We do understand why this is a common mistake for Founders to make, as it’s often outside of their core area of expertise. They are not typically B2B sales and marketing experts, so why not hire someone who’s been a sales leader and got much more experience in sales and sales management?
It’s a very logical approach, but it’s not a winning strategy.
The reality is, a VP should not be introduced to your SaaS B2B startup to create initial sales but to support growth when the time and conditions are right.
So, what are the signs that your start-up is VP ready?
1. You have a succinct value proposition with a clear product use case
Sometimes as Founders, we expect a new VP of Sales to come in and to understand our often unproven and unvalidated value proposition and to just sell it. To whom? How? Why? When?
Once you’ve validated your product’s use case by obtaining paying customers, within a niche, and have demonstrable case studies to show the ROI of your software, then you are ready to scale and to hire.
Sales demands should not be treated in isolation, sales are a symptom of a clear value proposition.
Furthermore, before you hire a VP of Sales, your messaging should be tried and tested, and dynamic enough for new iterations that are inevitably required when growing a B2B SaaS company.
2. Your have extraordinary talent in your sales, marketing and customer success team
It’s great to have a clear and succinct value proposition but you need the team to take it to market it, sell it and service it.
For many B2B tech companies we see this as a vital step in their progression as a company, switching from Founder-led to team-led sales, marketing and customer success. It’s understandable that at the start you may be in charge of some or all of these roles but the real acid test of a B2B SaaS company is seeing if other people can sell, market and service as well as or even better than you can as the Founder.
Furthermore, if you want to build a scalable, repeatable and predictable business you need to make sure that you get the right talent, in the right roles, at the right time.
By making this jump, you become an investment-ready tech company.
3. You have a successful sales process
One of the keys to predictable revenue growth is a successful sales process.
The hallmarks of a successful sales process are ones which convert high value and referenceable customers, have a clear structure about them so you know what you’re doing next, and produce revenue in a predictable timeframe. This also could include upsells, cross-sells, on-sells and referrals too.
Additionally, another part of a successful sales process is to gain a deep understanding of your prospective or existing customers and also how to convey that value message to them, so they understand it and are compelled to act.
This means that the feedback you receive from your customers and prospects needs to be shared, reviewed and absorbed by the rest of your team. As a result, you can build a better product that creates more value for your customers than any other competitor.
4. You have a value-adding customer success process
Your customer success team will evolve and adapt over time, as you gain more momentum, experience and gain further funding.
In the early stages, your customer success managers may look after onboarding, servicing, renewals and expansion revenue. Over time, this will change and you’ll be able to break down these core functions into separate roles.
The core thing you must get right is that you retain, grow and gain referenceable customers. To achieve these goals, your team will have embedded an excellent onboarding process, get your customers using your product regularly, shorten the time to value for them and be able to clearly demonstrate the ROI of your software to your customers. This will make the goal of gaining renewals and expansion revenue a lot easier for you.
5. You have consistent lead generation
Often, we hear from Founders, “we just need more leads, if only we had more leads then we would get our Series A”.
Leads are important, you need a steady stream of leads that are created through both inbound and outbound approaches. Both compliment each other, both can overlap too.
You’ll need to have several proven lead generation strategies that create new leads consistently, as new leads, create conversations, which create proposals, which then create customers.
If you don’t have consistent lead generation, it will be hard to hit your revenue projections, to bring on more sales hires, not to mention leadership level.
In today’s climate, Founders are expecting a lot from VPs of Sales in B2B SaaS companies. They want them to create a strategy, recruit the right people, put the smart processes in place, mentor and coach a team and that added extra – hit your own sales target.
This player/coach role in our research has not proven to be the most effective and responsible decision for a Founder to make at a B2B SaaS company. You are still finding your market, your value and developing your product to meet your customer’s demands.
With so many unknowns, so many questions and often a lack of clarity in early stage companies on what needs to be done, it’s no wonder that the average VP of Sales only lasts 13 months.
Our core message is that there are fundamental building blocks that need to be put in place to create an environment for VPs of Sales, Marketing and Customer Success to be successful and gain maximum ROI from these senior hires.
From our research, we see the optimal point for you to make these senior hires is at Series A or maybe Series B.
Our business enables B2B Pre-Seed, Seed and Series A businesses to get into a position to hire a VP of Sales. For us it’s a case of the order, not if but when you hire a VP of Sales.
We help you do this by identifying the critical building blocks in the three areas of Proposition, People and Processes. We then install these into your tech company to transform you from Founder-led to a team-led sales approach – creating predictable revenue and enabling you to secure further funding.