“It’s too early to hire a VP of Sales!” The VC said to me. “You should be doing the selling!”
“I hear where you’re coming from,” I said. “And believe me, I will be selling.”
“’Ken’s’ been part of the company since I started it.
“Without Ken, we wouldn’t have gotten funded,” I said. “One of our investors insisted we have the sales piece figured out.”
It turned out we were both right.
I did need Ken to start the company. I don’t think we would have been funded without him.
But the VC was right too. It was WAY too early to have a VP of Sales.
I was the most effective salesperson the company had early on. The company was my idea, and I was passionate about what we were doing in a way that Ken never could be. I’ll get back to this later.
So do the selling yourself when you are starting out. You’ll be…
- The most effective salesperson your company has because you know the product(s) the best, and…
- You, the CEO, will care the most about winning deals because it’s your company, and…
- You’ll learn the sales process for your company, so you’ll know what to look for when you eventually hire a true VP of Sales.
I wish the list of mistakes you can make with sales ended with hiring a VP of Sales too early. There are many more mistakes you can make with startup sales.
Here’s a list of 8 other mistakes to avoid:
A. Hiring a B player for VP of Sales because this is the best person you can find.
I made this mistake too.
Ken didn’t work out because he didn’t want to put out the effort required. He was burned out from too many years on the road. So I hired an Executive Recruiter (the right move) to help me find a replacement.
I looked at hundreds of resumes and interviewed around twenty candidates. And none of the candidates were what I called “Wows”.
A Wow candidate is someone that blows you away on every metric you are looking for. But we just couldn’t find a Wow candidate.
The reality is we were just too early to attract a Wow VP of Sales candidate. We needed more traction to attract the Wows.
And we just weren’t there yet.
But there were two candidates that stood out from the rest. Both candidates were good solid “B” players.
So what should I have done? Easy. I should have passed on both candidates, and I should have kept running sales until we got to a level where we could attract a Wow VP of Sales.
I ended up hiring one of the candidates. He did some good things for the company, but he wasn’t at the level we wanted.
The moral of the story is hire only Wow people. So, while you’re interviewing you shouldn’t…
B. Hire based just on personality.
Sales can be considered this squishy thing. The reality is today’s successful VP of Sales is metric and systems based, not just a people person.
So here are some questions that any qualified VP of Sales should be able to answer:
"Tell me about the people you want to bring with you to our company?"
A good VP of Sales (actually just about any executive for that matter) has some people that they would like to bring with them.
You don’t need to know the names of the people, but a good VP of Sales should be able to tell about the people and what roles they will fill.
"Tell me how the sales organization will look in 90 days based on what you know?"
A qualified VP of Sales will be able to tell you how they feel the sales organization will evolve.
They should have a definitive plan that is step-by-step.
"Tell me how you built your current sales organization?"
A qualified VP of Sales should be able to tell you how they built their current organization.
In fact, they should be able to tell you how they’ve built every organization they’ve managed. It’s a red flag if they can’t tell you.
"Tell me about the biggest deal you’ve won and how you won it?"
Again, you’re looking for details here. The more precise the candidate is, the better.
"Oh, ask the candidate about the biggest deal they’ve lost and why they lost it?"
No one wins every deal. A good VP of Sales should have no problems telling you about their losses and what they would do different.
Remember, you’re looking for methodology, process, and detail here.
Let’s say you’ve hired a VP of Sales that isn’t working out. Don’t…
C. Keep a weak VP of Sales once you realize you’ve made a mistake.
We all make hiring mistakes. And hiring a VP of Sales that doesn’t work out is common.
What you do next can determine if your company survives. You need to terminate that VP of Sales that isn’t working as soon as you see it.
How quickly can you see if a VP of Sales is working out? The answer is as fast as your sales cycle is.
Let’s say your sales cycle (the amount of time it takes from a lead being captured to a lead turning into a customer) is six months. You should know by the end of that six month period if your new VP of Sales is working out.
Here’s the mistake too many people make: They hope things will get better.
The problem is you’re burning through time while you wait. And time is the enemy when you’re building a company.
Let’s say you’ve hired an awesome VP of Sales. Don’t screw it up by…
D. Setting the initial revenue targets for your VP of Sales.
Oh, I know it’s tempting, but don’t do it. You want your new VP of Sales to own the numbers.
Even if the numbers are low, let the new VP of Sales set the initial numbers. You can step in later if the VP of Sales isn’t aggressive enough.
Okay. How else can you screw up sales? There’s…
E. Thinking you have a repeatable sales process when you don’t.
What happens when you get that first big win? Maybe it’s not even a big win, but a medium sized win.
It’s human nature to believe the floodgates have opened, and you now have a repeatable sales process. You probably don’t.
What does a repeatable sales model mean? Exactly that. Something that is consistent.
A repeatable sales model doesn’t mean that sales have grown 30% month on month for one month. That’s just not enough data.
A repeatable sales model does mean that sales have grown 30% month on month for the past six months. And you have a set of predictable actions that have led to the outcome.
But maybe things aren’t going as planned. And you can make it worse by…
F. Hiring for growth that doesn’t happen.
This is a classic mistake.
You get a couple wins, and you start feeling good about yourself. And then you hire a large sales team and a staff to support them.
Then sales slow down, and you end up laying-off the same team you just hired. Talk about a huge morale killer.
But you can make it worse. Don’t take this action as tempting as might be:
G. Paying for leads.
Of all the scammy, crazy ways to blow money, paying for leads has to be right near the top of the list.
It’s kind of like what Pied Piper did near the end of Season 3 of Silicon Valley to show user growth.
Paying for leads just never, ever works out. Why? The quality of the leads usually sucks.
Think about it. Why is someone going to give you high quality leads instead of using the leads themselves? It just doesn’t make sense.
So hopefully you don’t succumb to buying leads. But maybe you’re thinking about this beauty…
H. Farming out a portion of your sales activity to an outside consultant.
Let me explain.
Let’s say there’s a group of people that, allegedly, have extensive contacts in a region where you have no presence. The group comes highly recommended.
You meet with the group several times, and you are impressed with the group’s knowledge. You hire the group on a monthly retainer.
And the group does nothing except take your money.
That’s where the alarm bells should go off. Never pay outside sales reps (which is what a group like this is) a retainer. Ever.
The commission you are giving them should be enough of an incentive. Pass if it isn’t enough.
So there you have it. My list of nine startup sales mistakes you should never make.
There are many more sales mistakes you can make, believe me. But you’ll be doing good if you avoid this set of nine sales mistakes.
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