Happy Friday! We're Relate (YC S22), a simple sales CRM software for B2B startups. For this week, we're bringing a few good reads on VP Sales, Prospecting, and JTBD.
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Many startups struggle to hire a VP of Sales. Most of the time, the first VP of Sales fails, and startups lose both time and resource.
Jason Lemkin from SaaStr says that 50% of the problem in hiring the VP of Sales is due to misunderstanding what the VP of Sales should do.
Below are the top 5 roles of VP of Sales at SaaS startups between $500K-$20M ARR.
- Recruiting: The VP Sales should spend 20% of their time building the team. The most important role of the VP of Sales is to hire great sales reps and help them succeed.
- Backfilling and Helping His/Her Sales Team: The VP of Sales should support his/her team to close deals.
- Sales Tactics: The VP of sales should learn and understand how to maximize revenue per lead.
- Sales Strategy: The VP of Sales should focus on sales strategy once the team is past $20M ARR. The VP of sales should have great managers who can execute core tactics.
- Creating and Selling Deals Him/Herself: This is the last of the top 5. It is important, but not the most important role for the VP of Sales. Once the team is past $1M, the VP of Sales should focus on building the team to scale up.
When's the right time to bring on a VP Sales?
If your first two sales reps are hitting quotas, then it is the right time to hire a VP of Sales. Below are 10 great questions to ask your VP of Sales candidates during interview.
- How big a team do you think we need right now, given what you know? (If he/she can't answer - right or wrong - pass).
- What deal sizes have you sold to, on average and range? (If it’s not a similar fit to you, pass. If he/she can’t answer fluidly, pass).
- Tell me about the teams you’ve directly managed, and how you built them. (If he/she can’t describe how they built a team — pass).
- What sales tools have you used and what works for you? What hasn’t worked well? (If they don’t understand sales tools, they aren’t a real VP of Sales).
- Who do you know right now that would join you on our sales team? (All good candidates should have a few in mind)
- How should sales and client success/management work together? (This will ferret out how well he/she understands the true customer lifecycle).
- Tell me about deals you’ve lost to competitors. What’s going to be key in our space about winning vs. competitors?
- How do you deal with FUD in the marketplace? (This will ferret out if they know how to compete — or not).
- Do you work with sales engineers and sales support? If so, what role do they need to play at this stage when capital is finite? (This will ferret out if he/she can play at an early-stage SaaS start-up successfully — and if he knows how to scale once you scale).
- What will my revenues look like 120 days after I hire you? (Have him/her explain to you what will happen. There’s no correct answer. But there are many wrong answers).
Bonus Question: How should sales and marketing work together at our phase? (This will ferret out if he understands lead generation and how to work a lead funnel. Believe it or not, most candidates don’t understand this unless they were really a VP of Sales before).
Depending on your stage of the company, there are certain types of VP Sales you need to hire.
1. The Evangelist: $0~$1M ARR
The Evangelist understands your product and is very customer-centric. The Evangelist can immediately go out and start selling. The problem with the Evangelist is that they never built or scaled a sales team before. Thus, it would be better to find these characteristics in the first sales reps you hire.
2. Mr. Make-it-Repeatable: $1M~$10M ARR
They are the best type to hire for early-stage startups. If you have some customers, generate some leads, have a micro-brand, and hired 1-4 reps, you will see your revenue per lead go up with Mr. Make-it-Repeatable.
Mr. Make-it-Repeatable knows how to close, how to build the team, and how to build the basic processes.
3. Mr. Go Big: $10M~$40M ARR
Mr. Go Big understands how to hire the right people, standardize and scale your SDR program, go up the market, and everything you need to do to scale up. You can find Mr. Go Big on the teams that just went through this phase. However, it might be difficult for Mr. Go Big to do well in the early stages, if they do not have relevant experiences.
4. Mr. Dashboards: $40M~$100M ARR
Mr. Dashboard understands what resources they need to hit the goal, how to secure resources through internal presentation & negotiation, and how to work with other managers. You will need Mr. Dashboards at some point. However, if you are not truly unstoppable yet, it's better not to hire Mr. Dashboards.
Not every lead will lead to a sale, so you need to identify which leads are warmer than others to process them through your sales funnel. If you have more leads than you can handle, it becomes more important to identify high-intent leads so that you can focus on them. Below are 8 questions to qualify high-intent leads.
- What problem are you looking to solve?
- Why are you looking now?
- What will happen if you don’t choose to buy?
- Have you looked at or tried other solutions?
- What’s your budget?
- Are you a decision-maker?
- What hurdles do you see to purchasing and implementing this solution?
- What’s your timeframe for purchasing and implementation?
Why do customers buy your product? It's because they have Jobs To Be Done, and they buy your product to do the job. Alan Klement defines Jobs to be done as follows:
A Job to be Done is the process a consumer goes through whenever she aims to change her existing life-situation into a preferred one, but cannot because there are constraints that stop her.
Thus, customers are buying your product because there is a job to be done. It's because they have problems to solve, and they believe that your product can solve them.
The most important thing for a startup is to solve your customers' problems through your product. You also need to make your customers believe that your product is the best way to get a job done for them.
Jason Lemkin from SaaStr says that outbound still works if you do it right. Everyone spends at least 1 hour in email, and they are looking for solutions to their most important problems.
If you know what problems your prospects have, how to find them, and approach them when they are looking for solutions, you can still make results through outbound sales.
If your outbound team is not performing well, it might not be due to your product, competitors, or the market. It might be their approach.
Relate is a simple CRM software built for B2B SaaS startups. We're in private beta! If you're down to trying, reach out to us!