Speaking as a salesperson this article has a few things that I find difficult to agree with:
1) Sales vs BizDev - As described in the article the sales people he's looking for are great for one off transactions, not for building a real client base that will refer and keep coming back. Remember how you like to be sold, for bigger things most people want to know and trust the person they are buying from.
2) Domain Knowledge - which is easy to teach, sales or what you do? Hire a good salesman and teach them your business
The idea is sound and I've seen a number of startups go the wrong way with it, but those two stood out to me.
Conrey-I agree with your point about things not being black and white between sales vs biz dev . It boils down to how many resources do you have to invest in go-to-market initiatives. For most startups, customers decide to trust and buy based on their interactions with the founding team and the CEO. In fact if the founding team isnt actively involved in the deal closure process that is a red flag. Given this assumption what you need is a person on the team who is obsessively focused in generating prospects. Once a prospect has been engaged then the founding team will have to wing into action in closing the deal.
On domain knowledge-certainly its easy to teach what you do than teach how to sell. Always better to get a strong sales guy than the other way round. In the article I was reference the difference between one with industry knowledge and product knowledge.
1. Knowledge: This may be useful if you have a highly technical product but I have always found it easier to teach someone about a product than to teach them how to sell.
2. Skills: a skill that may be more useful than building a plan would be the ability to close. Assign some leads and see if the person can actually close. http://www.youtube.com/watch?v=wVQPY4LlbJ4
3. Accountability: Often the worst part about great salesmen is that they are great salesmen. They will sell themselves and you on doing as little work as possible. A basic CRM to monitor his progress may provide an equal or better ROI than the salesman himself.
Imho accountability through CRM works only for large companies. In early stage startups accountability has to be an intrinsic value in the hire. If the founders have to measure accountability through CRM then they have hired the wrong person.
"But unlike a technical interview, give the candidate a few days’ time to come up with a plan. This will involve researching the market, doing some preliminary analysis and would require some back and forth for the candidate to understand how your product would fit with the market." - why would good sales candidates be more likely to want to spend days preparing for an interview than good technical candidates?
1. This is a self selection hack: The renaissance sales rep will be drawn to the problem and will want the intellectual challenge of thinking through a new problem.
The coin operated ones will instinctively get turned off by your request for a plan and will self select out. You anyway don't want to hire one of those.
Also, most sales reps spending their days staring at spreadsheets, CRM systems and drab presentations. This will be a welcome break.
2. Helps them research their probability of success: Good sales reps don't like to lose in the marketplace. These are individuals who are motivated by winning deals. They love the chase.
Preparing a plan helps them evaluate their chances of success.From a career standpoint they wouldn't want to join a company only to be let go after sometime because they couldnt make quota. It reflects really badly in their next interview.
So a smart sales guy would want to research before hand if the market is hot, is the product unique?, who is competition? what are the prospective customers that he has connections with?
He is going to do this irrespective of whether you ask him or not (red flag on his caliber if he doesn't). Why not make it a part of the process?
Btw, judging the specifics of the plan is not as important as judging the process of his planning.
The true test of your VP of Sales should never be: "What do you know of the domain and what do you know of the customer" particularly when we're talking about an early-stage company, still searching for a repeatable sales model. It's my view that best test of the VP Of Sales is the following question: "What do you do when no one is buying our product?"
Sales executives that are trained and deeply experienced in sustaining innovation sales models are great when the repeatable sales model has already been discovered, documented and integrated into the entire organization, including the marketing and product. At this level, the role of the Sales VP is there to "caretake" the sales organization through the maturation stage of growth and dependable business objectives led by the CEO. Their rewards are aligned with the ability to keep the engine humming or fine-tune it for increased sales revolutions.
In a startup, prior to full discovery of the repeatable sales model, one should avoid any sustaining innovation Sales VPs like the plague. One should take a bigger risk on high-energy, untrained sales reps/managers, who are capable of learning disruptive sales models and can be trained (and retrained cheaply) to patiently listen to the customer buying cycle and business circumstance around which a new marketing model must be built. It is my view that most VP of Sales are not trained for disruptive and innovative sales roles because their experiences were anchored around very predictable revenue models.
At the VP of Sales level, there are many ways to vet a candidate and those methods should align with the corporate structure and the corporate culture. However, let’s be clear. The first VP of Sales or VP of Marketing are high-risk hires who the CEO should be prepared to replace as quickly as possible as the product market fit process, customer segments, and customer buyer-cycle and buyer-profiles continue to change and settle.
Don’t get obsessed over your first VP of Sales as “The One”
Obsess that you have athletes that are capable of running a hard sales race and that your organization is nimble enough to adapt and change, as needed to survive the sales discovery process!
my 2c is that if you hire a stellar VP of Sales, then he can help you hire/train an amazing sales team. So aim high, and poach guys from whichever industry leader there is: Facebook, Google, AdMob (in our case), etc.
Couldn't agree more. In my experience leading sales teams the difference between one territory rep versus another territory rep is how well that rep was trained/motivated/coached and mentored by his sales manager. Stellar VP of sales are not only good with customers but also exceptional at grooming people. Aiming high and poaching from a Facebook, Google etc. is the right thing to do as these companies have good sales folks. If you are looking at enterprise sales then Oracle and Salesforce.com have stellar people. But I imagine some kind of inflection point in the startup journey where it makes more sense to hire a VP of sales versus a individual contributor sales rep. Any pointers on what that inflection point would be? Funding?
There's a big difference in psychology. Although it's only a rule of thumb, the best VP of sales can be a bit more introverted and detail-oriented than the salespeople they manage, who can be more outgoing, high-perseverence, cold calling types.
VP sales has to manage revenue pipelines, analyze sales reports, detect account losses, manage promotions, get involved in contract negotiations, etc.
Salespeople network, originate leads, cold call companies, build relationships, close deals, etc.
The best salespeople often make terrible VP sales.
In my opinion, hiring a VP of Sales makes sense if a large sales org is critical to your business success. Think global domination. Some VP of Sales depending on their background are better at 'optimizing' sales processes and personnel rather than experimentation and general hustle.
Once you have some traction and a solid product, a great VP of Sales will help you scale your early success rapidly.
For starters sales reps are individual contributors where are VP of sales tend to be organization builders. They hire sales folks and build a sales organization under them. So you should expect VP of sales to be much more senior and thus cost you more in salary and equity. A good VP of sales tends to get 1 or 2% of equity. That may vary though.
[+] [-] conrey|13 years ago|reply
1) Sales vs BizDev - As described in the article the sales people he's looking for are great for one off transactions, not for building a real client base that will refer and keep coming back. Remember how you like to be sold, for bigger things most people want to know and trust the person they are buying from.
2) Domain Knowledge - which is easy to teach, sales or what you do? Hire a good salesman and teach them your business
The idea is sound and I've seen a number of startups go the wrong way with it, but those two stood out to me.
[+] [-] ananddass|13 years ago|reply
On domain knowledge-certainly its easy to teach what you do than teach how to sell. Always better to get a strong sales guy than the other way round. In the article I was reference the difference between one with industry knowledge and product knowledge.
[+] [-] Datonomics|13 years ago|reply
2. Skills: a skill that may be more useful than building a plan would be the ability to close. Assign some leads and see if the person can actually close. http://www.youtube.com/watch?v=wVQPY4LlbJ4
3. Accountability: Often the worst part about great salesmen is that they are great salesmen. They will sell themselves and you on doing as little work as possible. A basic CRM to monitor his progress may provide an equal or better ROI than the salesman himself.
4. If you are short on cash, you can build a sales team on commission only. This book has a few ideas on how to set that up: http://www.amazon.com/The-Ultimate-Sales-Machine-Turbocharge...
[+] [-] ananddass|13 years ago|reply
[+] [-] powera|13 years ago|reply
[+] [-] ananddass|13 years ago|reply
1. This is a self selection hack: The renaissance sales rep will be drawn to the problem and will want the intellectual challenge of thinking through a new problem. The coin operated ones will instinctively get turned off by your request for a plan and will self select out. You anyway don't want to hire one of those.
Also, most sales reps spending their days staring at spreadsheets, CRM systems and drab presentations. This will be a welcome break.
2. Helps them research their probability of success: Good sales reps don't like to lose in the marketplace. These are individuals who are motivated by winning deals. They love the chase.
Preparing a plan helps them evaluate their chances of success.From a career standpoint they wouldn't want to join a company only to be let go after sometime because they couldnt make quota. It reflects really badly in their next interview.
So a smart sales guy would want to research before hand if the market is hot, is the product unique?, who is competition? what are the prospective customers that he has connections with?
He is going to do this irrespective of whether you ask him or not (red flag on his caliber if he doesn't). Why not make it a part of the process?
Btw, judging the specifics of the plan is not as important as judging the process of his planning.
[+] [-] taariqlewis|13 years ago|reply
Sales executives that are trained and deeply experienced in sustaining innovation sales models are great when the repeatable sales model has already been discovered, documented and integrated into the entire organization, including the marketing and product. At this level, the role of the Sales VP is there to "caretake" the sales organization through the maturation stage of growth and dependable business objectives led by the CEO. Their rewards are aligned with the ability to keep the engine humming or fine-tune it for increased sales revolutions.
In a startup, prior to full discovery of the repeatable sales model, one should avoid any sustaining innovation Sales VPs like the plague. One should take a bigger risk on high-energy, untrained sales reps/managers, who are capable of learning disruptive sales models and can be trained (and retrained cheaply) to patiently listen to the customer buying cycle and business circumstance around which a new marketing model must be built. It is my view that most VP of Sales are not trained for disruptive and innovative sales roles because their experiences were anchored around very predictable revenue models.
At the VP of Sales level, there are many ways to vet a candidate and those methods should align with the corporate structure and the corporate culture. However, let’s be clear. The first VP of Sales or VP of Marketing are high-risk hires who the CEO should be prepared to replace as quickly as possible as the product market fit process, customer segments, and customer buyer-cycle and buyer-profiles continue to change and settle.
Don’t get obsessed over your first VP of Sales as “The One”
Obsess that you have athletes that are capable of running a hard sales race and that your organization is nimble enough to adapt and change, as needed to survive the sales discovery process!
[+] [-] adebelov|13 years ago|reply
thoughts?
[+] [-] ananddass|13 years ago|reply
[+] [-] uams|13 years ago|reply
[+] [-] mediaman|13 years ago|reply
VP sales has to manage revenue pipelines, analyze sales reports, detect account losses, manage promotions, get involved in contract negotiations, etc.
Salespeople network, originate leads, cold call companies, build relationships, close deals, etc.
The best salespeople often make terrible VP sales.
[+] [-] ashleycutler|13 years ago|reply
Once you have some traction and a solid product, a great VP of Sales will help you scale your early success rapidly.
[+] [-] ananddass|13 years ago|reply
[+] [-] lwhalen|13 years ago|reply
[+] [-] mburshteyn|13 years ago|reply
[+] [-] ananddass|13 years ago|reply
[+] [-] mp99e99|13 years ago|reply
[+] [-] dataisfun|13 years ago|reply
[+] [-] ananddass|13 years ago|reply