Hiring a VP of Sales for Startup – Major Funding Issue – CEO Has to Be Chief Sales Person

I was asked yesterday about the right candidate for VP of Sales of a startup. I found this great post on the subject by Steve Browne who wrote the book called Traction.

Hiring a VP of Sales is the most important thing a startup can do. In my startups I handle all the sales function. At my last startup PodTech I did all the initial sales from scratch and built it up to a $7m run rate. The problem is it’s hard to find a true VP of Sales to run revenue generation at a startup and at PodTech handing it off to someone other than me who just couldn’t roll with the market was a big problem for the company (as it turned out for me as CEO).

Hire the wrong VP of Sales and you risk killing your company. Don’t hire someone and you risk running out of cash. A startup needs a Chief SalesPerson – it has to be the CEO or a CoFounder. The fact is there is only two ways to fund a startup: sell a product or service or sell equity.

Here is some text from Steve Browne (thanks Steve)

The VP of Sales for a startup must be the tip of the spear. By that I mean the VP of Sales must come up with the first few sales, create the sales manual and then teach others how to do what they did.

So one of the first filters to use is to make sure they have created revenue (from scratch) at a startup. If they don’t have this recent experience, that is a problem.

My next bit of advice for a founder or CEO faced with hiring a sales or marketing vice president would be to ask them for their plan. Once you get down to only a few candidates, ask them what they would do if you hired them. See if they can produce a plan. By seeing this you can best judge if they are in danger of being successful.

By a plan I mean at least the summary of the sales plan which would be the sales (and/or marketing) section of your startup’s business plan. This has several advantages:

* It will weed out those who are incapable of coming up with a plan. If the candidate can’t create a sales plan for your company they are unlikely to be able to create and implement a successful plan once you hire them.
* It will allow you to see what you are buying before you hire them. That way there are no big surprises later. If you disagree with the plan you can discuss that during the interview cycle. Maybe one of you will learn something.
* The results you get from asking a few people to come up with a plan can be illuminating. Hopefully the finalists are good at what they do. Getting their opinion of how to tackle the sales challenge will be useful at a minimum and might even lead to new insights.

Author: John

Entrepreneur living in Palo Alto California and the Founder of SiliconANGLE Media

3 thoughts on “Hiring a VP of Sales for Startup – Major Funding Issue – CEO Has to Be Chief Sales Person”

  1. You are right on the money. Startups are exciting and rewarding. When you find someone that has spent most of their career in industries such as consumer products or the like and with large companies, in many cases they have been exposed to more than they even realize. The key is the plan that you mention. If they are worth the investment and they demonstrate understanding of your industry and issues it shows that they did some digging versus just telling you what you want to hear. Sometimes the search for one position can result in hiring a team and creating a solid plan. You never know.

  2. Well, I totally disagree with this advice. Correct on the point that a startup is an entirely different environment than someone coming from a big company with alot of resources. However, to say that if they have not generated revenue in a startup before then they likely will not be successful in a startup is insane.

    I find that there is a balance. You need someone with decent experience in getting deals done within a structure. By this, I mean, they have had to negotiate deals with a sense of legal and fiduciary responsibility. Getting a real pipeline built in a startup is tougher, but closing a deal is not since the company is not public, do not have auditors on your tail to defer revenue, have carvouts, and hence can essentially negotiate almost anything since there is are less contraints. I have seen this lead to an enormous amount of incompetence from serial startup entrepreneurs who never really learned how to do it “right” or correctly.

    On this flip side, getting somone from an enourmous organization that relies on a team of people or resources throughout their career may not be good either. You have to find the story behind their acheivements to judge how much of their results were from their own effort verses efforts of others, their channel, etc.

    All in all, there are few that are genuinely capable of what a startup really wants or needs, but the key is qualifying the person, their acheivements, rather than their work history. If you judge just on the fact of if they have done it at a startup or not, could experience a big downside as well….

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