10 Of My Favorite SaaStr Posts on Building Your First Great Sales Team


This post is by Jason Lemkin from SaaStr

Over the years at SaaStr we’ve done a lot of posts (and videos and sessions) on hiring your first great sales team.  I recently re-read a bunch using our excellent Algolia-powered search and wanted to share some of my favorites, updated:

1. Your First VP Does Not Have To Be a VP of Sales.  Looking back, this is just so important, I wish I’d written this in the earliest days of SaaStr.  Yes, you know you want a VP of Sales.  We all need one, almost all of us at least.  But don’t let that stop you from hiring any other great VP first.  They are all accretive.  They all add to sales.  Read it here:

Your First VP Does Not Have to Be a VP of Sales

2.  10 Crystal Clear Signs Your VP of Sales Just Isn’t Going to Work Out.  Please read this one if you aren’t sure if your VPS is cutting it.  VPs of Sales get blamed way, way too often for things outside of their control. And fired and/or topped when they shouldn’t be.  But CEOs often stick with a failing VP of Sales way, way too long.

Here’s how to tell the difference:

10 Crystal Clear Signs Your VP of Sales Just Isn’t Going to Work Out

3.  What Core Metric Should Your VP of Sales Be Responsible For?  A very simple post, but a very important one.  You get what you incent.  Should your VPS be responsible for bookings?  Or ARR at year-end?  New business?  New business + renewals?  She or he will build a very different team, and work to very different goals, depending on what you pick:

What Core Metric Should Your VP of Sales Be Responsible For? It Really Matters What You Pick.

4.  Yes, Your VP of Sales Also Has to Be a Great Salesperson Herself.  I highlight this one because I see this mistake made so, so many times.  A CEO loves a CEO that is smart, knows the terms, seems to “get it”.  But has never really been a killer salesperson herself.  This can work at Adobe at SAP.  It will fail at your startup.  More here:

Yes, Your VP of Sales Also Has to Be a Great Salesperson Herself

5.  How to Succeed as a First-Time VP of Sales.  Or VP of Anything, Really.  This guide was meant for stretch VPs taking the ring for the first time, but it also serves as a great reverse checklist for CEOs on where to push, and where not to.  If you are looking at being a VP of Sales for the first time, please read this post.  I see so, so many stretch VP of Sales get fired / quit in less than 6 months.  It doesn’t have to happen to you.  Here’s how to avoid it:

How to Succeed as a First-Time VP of Sales. Or Just a First-Time VP in General.

6.  That Super Successful VP of Sales.  Great?  Or Just Lucky?  When you go to hire your VP of Sales, you’ll get excited by logos.  Be careful.  Because if you don’t dig deep, you’ll likely find someone more lucky than great.  Sales is tough, no doubt.  But it is just different when success has many fathers and mothers and parents.  More on the difference, and how to avoid this oh so common, and avoidable, mistake here:

That Super-Successful VP of Sales. Great? Or Just Lucky?

7.  If Your VP of Sales Isn’t Going to Work Out — You’ll Know in 30 Days.  Another super important lesson.  When I first wrote this, so many VPs of Sales hated the post.  But later, they all admitted I was right.  At least all the good ones did.  You’ll know if your VP of Sales is going to make it in 1 sales cycle at least.  Even in 30 days, if you pay close attention.  More on how and why here:

If Your VP Sales Isn’t Going to Work Out — You’ll Know in 30 Days

8.  How My VP of Sales Doubled Our Sales in 90 Days.  And No, It Wasn’t Magic.  Boy, this classic holds up.  How does a VP of Sales come off the street, with the same crummy leads as last quarter, and magically grow sales?  It ain’t magic.  It’s people, process, and team.  How it really happens, here:

How My VP, Sales Doubled Our Sales in 90 Days. And No, It Wasn’t Magic.

9.  Six Key Signs Your VP of Sales Can’t Scale Beyond $5m-$10m ARR.  Even if your VP of Sales is working out, you have to be honest and ask if she can scale to the next level.  More often than not, she can scale further than you think. Don’t assume she can’t.  But there are some very clear signs she/he can’t growth further.  Here are the top 6:

6 Key Signs a VP Can’t Scale Beyond $5m-$10m ARR

10.  Twelve of The Most Common Mistakes Made Building Your First Salesteam.  You are going to make a lot of these mistakes.  Just make fewer (and it’s not that hard) — and you will sell more.  I guarantee.  A great checklist:

12 Of The Most Common Mistakes Made Building Your First Sales Team

Want More?  The SaaStr team put together an incredible eBook with all this and more.  Download it here:

https://vpsales.saastr.com/

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Post-Traction, You Need to Spend 20% of Your Time Recruiting


This post is curated by Keith Teare. It was written by Jason Lemkin. The original is [linked here]

Screen Shot 2013-02-07 at 9.43.05 AMLove him or hate him, Nick Saban is the most successful college football coach of the current generation.  Winner of 3 out of 4 straight national championships.

And how often is he recruiting?  Every.  Single.  Day.  In fact, every single day he and his team go into their Recruiting War Room, and analyze every single possible recruit coming up the next four years.  And he seals the deals himself.  All season long, off-season.  50/52 weeks a year, every day.

I’m going to suggest to you that, at least from Initial Traction until Initial Scale (say $1m ARR until $10m ARR) — this is the single most important improvement you can make to your SaaS company:  To recruit every single day.  Or 20% of your time.  The equivalent of one full day a week.

Later, when you are bigger, you can still do the same, but you’ll have more help surfacing the candidates, from your VPs and Directors and team members.  But in this phase — you need to be Head Recruiter yourself.  20% of your time.

Because it’s this stretch from Initial Traction until Initial Scale when many SaaS CEO and founders fall down a bit in recruiting.

At first everyone is sort of great at recruiting — by definition.  You have to assemble a great founding team, which can be a full-time job (which is fine, as you have nothing else to do at this point).  Then, you need to add a few key engineers and folks to the team.  Then a sales guy, a marketing lead … one at a time.  You tackle them as individual, sequential challenges.

And then you hit Initial Traction, and the painful stretch from $1-$2m in ARR to Initial Scale ($10m ARR or so).  And there’s so much to do in this phase, with not enough resources.  And you’re probably doing so much yourself, because you don’t have any redundancy, any extra management, any fat, any room to breathe.  And you don’t have to make any specific hire, on any day, anymore.  You have a bit of an engine going.

And recruiting suffers.  Because episodic recruiting doesn’t get it done anymore in this phase.  It won’t kill you on any single day, but it won’t get you from 10 to 50 employees.  And most importantly, it won’t get you the 2-3 more senior managers you need to get on your team in this phase to help you get to Scale.  And without those hires, it’s going to be soooo much harder.   And soooo much longer.

I don’t know what the gaps are on your team.  A missing VP Sales.  A VP Marketing.  A VP Engineering.  A head of client success.  But after Initial Scale: I’d spend an hour a day at least, period, on recruiting.  That means:

  • Meeting every possible great candidate — irrespective of if you need this hire today.  Already have a VP Sales?  Well, meet with a great one anyway.  You can learn.  Maybe this guy can get you another candidate.  Or be your VP, Biz Dev.  I don’t know.  But meet him/her.  Meet all the great ones.
  • Working and paying recruiters — and being highly responsive to them.  Don’t cheap out on recruiters anymore.  You need the help — your individual network is tapped out already at this point.  And remember recruiters work on contingency, generally.  They’ll give up on you if they don’t think they’ll ever make any money off you.  So be responsive — respond back to them on every candidate they send you within 24 hours.
  • Network more, not less.  I know from Initial Traction to Initial Scale you want to dial down the networking and dial up the execution side.  But don’t cut back on events, on networking, whatever you do.  You have to connect with as many quality people as possible.

Whatever it is, as CEO at least, spend 60-90 minutes a day or more recruiting.  Every day.  Some of these activities may seem low ROI vs. other pressing matters, post-Traction.  Some may takes years to connect to anything tangible.  And I know it’s a grind.  But if you don’t put in the time, you won’t get the help.  You won’t find the unicorns.  And you’ll suffer — hard — as you run out of oxygen and air to get to Scale.

A few more tips on how to get better at recruiting here:

How To Get Better at Recruiting. (We All Need To).

(Note: an update of a SaaStr classic)

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Post-Traction, You Need to Spend 20% of Your Time Recruiting


This post is by Jason Lemkin from SaaStr

Screen Shot 2013-02-07 at 9.43.05 AMLove him or hate him, Nick Saban is the most successful college football coach of the current generation.  Winner of 3 out of 4 straight national championships.

And how often is he recruiting?  Every.  Single.  Day.  In fact, every single day he and his team go into their Recruiting War Room, and analyze every single possible recruit coming up the next four years.  And he seals the deals himself.  All season long, off-season.  50/52 weeks a year, every day.

I’m going to suggest to you that, at least from Initial Traction until Initial Scale (say $1m ARR until $10m ARR) — this is the single most important improvement you can make to your SaaS company:  To recruit every single day.  Or 20% of your time.  The equivalent of one full day a week.

Later, when you are bigger, you can still do the same, but you’ll have more help surfacing the candidates, from your VPs and Directors and team members.  But in this phase — you need to be Head Recruiter yourself.  20% of your time.

Because it’s this stretch from Initial Traction until Initial Scale when many SaaS CEO and founders fall down a bit in recruiting.

At first everyone is sort of great at recruiting — by definition.  You have to assemble a great founding team, which can be a full-time job (which is fine, as you have nothing else to do at this point).  Then, you need to add a few key engineers and folks to the team.  Then a sales guy, a marketing lead … one at a time.  You tackle them as individual, sequential challenges.

And then you hit Initial Traction, and the painful stretch from $1-$2m in ARR to Initial Scale ($10m ARR or so).  And there’s so much to do in this phase, with not enough resources.  And you’re probably doing so much yourself, because you don’t have any redundancy, any extra management, any fat, any room to breathe.  And you don’t have to make any specific hire, on any day, anymore.  You have a bit of an engine going.

And recruiting suffers.  Because episodic recruiting doesn’t get it done anymore in this phase.  It won’t kill you on any single day, but it won’t get you from 10 to 50 employees.  And most importantly, it won’t get you the 2-3 more senior managers you need to get on your team in this phase to help you get to Scale.  And without those hires, it’s going to be soooo much harder.   And soooo much longer.

I don’t know what the gaps are on your team.  A missing VP Sales.  A VP Marketing.  A VP Engineering.  A head of client success.  But after Initial Scale: I’d spend an hour a day at least, period, on recruiting.  That means:

  • Meeting every possible great candidate — irrespective of if you need this hire today.  Already have a VP Sales?  Well, meet with a great one anyway.  You can learn.  Maybe this guy can get you another candidate.  Or be your VP, Biz Dev.  I don’t know.  But meet him/her.  Meet all the great ones.
  • Working and paying recruiters — and being highly responsive to them.  Don’t cheap out on recruiters anymore.  You need the help — your individual network is tapped out already at this point.  And remember recruiters work on contingency, generally.  They’ll give up on you if they don’t think they’ll ever make any money off you.  So be responsive — respond back to them on every candidate they send you within 24 hours.
  • Network more, not less.  I know from Initial Traction to Initial Scale you want to dial down the networking and dial up the execution side.  But don’t cut back on events, on networking, whatever you do.  You have to connect with as many quality people as possible.

Whatever it is, as CEO at least, spend 60-90 minutes a day or more recruiting.  Every day.  Some of these activities may seem low ROI vs. other pressing matters, post-Traction.  Some may takes years to connect to anything tangible.  And I know it’s a grind.  But if you don’t put in the time, you won’t get the help.  You won’t find the unicorns.  And you’ll suffer — hard — as you run out of oxygen and air to get to Scale.

A few more tips on how to get better at recruiting here:

How To Get Better at Recruiting. (We All Need To).

(Note: an update of a SaaStr classic)

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What Happens When You Hire the Wrong VP


This post is by Jason Lemkin from SaaStr

A lot of classic SaaStr advice has been how to spot the best potential VPs.  When to hire them.  How to interview them and qualify them.  What they really do.  Etc. etc.

Because to scale, you are going to need to add a true management team, and then a second one, and then layers of management.  Otherwise, you’re growth will hit a wall.

And you’re are going to hire some VPs that … just don’t work out.  It may be more your fault than theirs.  After all, you know the most about your company.  So it’s your job to make 100% sure it’s a good match — not the prospective VP’s

When you do make a mis-hire, you can’t fix it at the VP level.  The VP is the owner of their department.  You have to move on.  And the faster you do it, the better.  The fewer weak hires they make.  The less of your scarce capital they spend.  The less they slow down feature development.

Let’s take a look at what happens when you make a mis-hire … so you can spot the signs and move on fast.

Signs of a mis-hire at VP of Sales:

  • Revenue Per Lead, or at least Net New Bookings, Do Not Go Up in 1 Sales Cycle.  If their bag of tricks doesn’t work at least a little ASAP, they can’t do it.
  • No one great joins them in first 60 days.  The best VPs of Sales quickly hire great reps under them.  Everyone else?  They hire weak, too junior folks.  SDRs for AE roles that have never sold before.  SMB reps doing enterprise deals.  Etc. etc.

Signs of a mis-hire at VP of Marketing / Demand Gen:

  • Qualified Leads Don’t Increase.  This is the job.
  • No alignment with sales.  If your head of marketing and head of sales aren’t close … something is off.  This doesn’t mean they are BFFs.  But they should be partners.  And marketing’s job is to help sales.  If sales doesn’t think they are getting help — you don’t have a real VP of Marketing.
  • Marketing costs just too high.  You have to be careful here to make sure you know what’s going on, but marketing costs should of course go up once you hire a head of marketing.  You have to spend more to get more leads.  But a weak VP of Marketing often spends with too much abandon, and not enough rigor.  If your cost to acquire a lead go from low to way too friggin’ high — that’s a sign.  A sign they don’t know how to do demand gen, especially.

Signs of a mis-hire at VP of Customer Success:

  • NPS / CSAT don’t improve.  This is the job.
  • Net retention doesn’t go up.  This is the job.
  • Churn stays elevated and doesn’t go down, at least a bit.  That is the job.
  • Activation rates don’t go up.  This is also the job.  Those hard-earned customers have to go live.  And a great VP of CS will make sure more of them do.  This is very easy to quickly impact.
  • If you see a lot of motion, but no KPI improvements in CS … you didn’t hire a VP.  You hired an IC that talks the talk, but can’t do the walk.

 

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5 Things that Kill Startups with Y Combinator


This post is by Amelia Ibarra from SaaStr

Y Combinator CEO Michael Seibel is featured in one of our most-watched SaaStr videos of all time — so we were delighted to have him back during our SaaStr at Home event to share the top 5 things that kill startups after their seed rounds, and how to avoid them.

In this tactical session, he highlights the trends he’s seen most commonly seen in startups that die and offers insights on the causes, symptoms, and solutions.

#1 Fake product-market fit

You’re company building before product building.

This is one of the most common symptoms of “impending death” for post-seed companies. So why do founders believe they have market fit, even if they don’t?

Causes:

  1. Raising money from impressive people
  2. Raising a series of pre-product market fit
  3. Magical thinking (ignoring the obvious!)
  4. Lack of strong technical talent

There is a common misconception that product-market fit means you’ve conceptually built what buyers want. However, this is not the case. Reality is, this concept reflects more on numbers.

Signs:

  • Lot’s of hiring
  • More business people than engineers
  • No metrics dashboards
  • Too many nice things
  • Flat graphs
  • Missing estimates but coming up with excuses
  • Changing your KPI’s

How do you fix it?

  1. Pick honest KPI and stick with it
  2. Track retention carefully
  3. Cap your burn
  4. Consider raising less money in your seed round
  5. Start with strong technology co-founders
  6. Have a three month essential rule when hiring
  7. Force revenue generating employees to pay for themselves
  8. Learn about your investors previous bad investments (this could determine your fate!)

#2 Investor = Boss

You’re allowing your investor to tell you what to do.

Your investor can only use one thing… WORDS. If you don’t follow a piece of advice or guidance they give you, we promise they won’t kidnap your family and ransack you for money.

Causes:

  1. Fear and self-doubt
  2. False assumption there are 100 repeatable paths to victory
  3. Lack of talking to customers

Signs:

  • Feeling pressured to spend more than you want
  • Hiring faster than you thought or created a plan for
  • Burning more money, while your KPI remains the same
  • Locking in one investor and cutting off all communication with others

How to prevent this?

  1. Talk to more customers
  2. Have real KPI and real metrics
  3. Track retention
  4. Keep a low burn
  5. Startup in a space you have organic insights in
  6. Remember, you’re the one who gives investors power over your business

#3 Co-founder conflict

Too much relationship debt is another way to look at this failure leading situation. The truth is, if you don’t have a good relationship with your investors and co-founders, you will crash and burn.

Causes:

  1. Weak previous relationship
  2. No clear roles or responsibilities
  3. Lack of trust
  4. Unrealistic expectations

Signs:

  • Lots of fighting
  • No conversations

How to prevent this:

  1. Have the tough conversation about how you’re feeling- let it all loose in a safe space.
  2. Establish explicit roles and responsibilities in a conversation.

#4 Ordinary vs. extraordinary

If you expect to be able to copy those around you and be astronomically successful, you are sadly mistaken. In other professions such as doctors, or lawyers if you have a good mentor you’ll most likely be able to copy their path to success. However, in the business world, what works for some may not be the path for others.

How do you reach to be extraordinary?

Causes:

  1. Understand people around you are the floor and not the ceiling
  2. Not believing you can be better than the people around you and having no confidence in yourself

Signs:

  • No numerical goals
  • Ignoring the obvious signs of a lack of progress
  • A good sign- you’re just happy to be alive
  • You’ve stopped learning
  • Blaming outside factors for your lack of success or “luck”

How to prevent this:

  1. Embrace the idea you can always improve over time if you try
  2. Think about habit formation
  3. Have a jedi counsel (aka a set of people you can receive advice from who are more extraordinary than you)
  4. Set measurable goals

#5 Slow product development

Your features, iterations, and bug fixes don’t ship.

If you’re constantly changing paths or projects, and feel you’re too busy to interact with customers; LISTEN UP!

Causes:

  1. No process for deciding what to build
  2. You have no deadlines
  3. You don’t write specs
  4. Engineers aren’t involved in park decisions
  5. No metrics
  6. No customer interaction
  7. Bad co-founder relationships
  8. Low quality product or technology founders

Signs:

  • Deadlines always missed or no deadlines
  • Release schedule is becoming longer
  • Discouraged or disengaged engineering team
  • Half done features piling up

How to prevent this:

  1. Have a product development cycle
  2. Always be collecting qualitative and quantitative feedback
  3. Write Specs
  4. Use product management software
  5. Small team= everyone’s included in product brainstorms
  6. Give all team members access to customers and access to customer data
  7. Understand motivation is a multiplier effect on talent
  8. Understand whoevers leading product is responsible for making sure that product is released

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Paradigm Shifts and the Future of Data Infrastructure with Snowflake, Neo4j, and Cockroach Labs


This post is by Amelia Ibarra from SaaStr

We recently brought together Denise Persson, CMO @ Snowflake, Emil Eifrem, CEO @ Neo4j, and Spencer Kimball, CEO & Co-founder @ Cockroach Labs, to discuss the future of data infrastructure in the Cloud.

In undergoing a sudden shift this year to the cloud of the future, these three leaders discussed 3 main paradigm shifts:

#1 Everything is moving to the cloud

#2 Data is becoming a strategic asset

#3 We are in the midst of a big generational shift when it comes to data infrastructure

The truth is, most companies are already falling behind with the ramifications of 2020 and need to move quickly.

So how do we change our businesses by fundamentally exploiting the benefits of the cloud?

#1 You shouldn’t go with a cloud-specific platform service

Instead, opt for the independent service and be aware of company trade-offs.

#2 Avoid having any one vendor have significant leverage over your company

If you place all your eggs in one basket, it will be much harder to migrate to different platforms in case of change or exploitation.

As we grow and expand into this new cloud era, several companies have grown at a much faster rate. Skill sets required are shifting as the world becomes more automated and reliant on technology.

Compared to ten years ago, what are the new skill sets required for data technicians?

According to Cockroach CEO and Co-founder, Spencer Kimball, skill sets in some ways have actually been allowed to narrow. It once would take a specialist who knew the vast details of technology, now you just need to know the platform and how to manipulate data to reach your goals. Due to this, there has been a significant increase in the rate at which companies grow. Companies can get a lot further much faster because they are no longer responsible for as much of the deployment puzzle.

Additionally, business aspects are now much more involved in technology decisions. There is a clear demarcation when it comes to AI and ML and it really is divided into two stages:

#1: Where we once only saw “geeks” caring about data, it has branched into big data that everyone cares about. Eifrem even believes, “Data is the new oil”.

#2: Next, AI and machine learning came along and every single business executive ever wanted to digitally transform into a machine learning company. Many business owners didn’t even care about graphs five years ago.

These make it much harder to be a technologist with business aspects being constantly involved and relevant. However, today we are seeing many best of breed stacks. So how does this play into everything?

First, you must be aware of the considerations. We’re dealing with best of breed tech approaches vs. “I’ll just do whatever is built into my platform.” They are different versions of trade-offs and all depend on the risks you’re willing to take on. In theory, it enables things to be cheaper with plug and play services, and you can experiment with a much smaller radius in case something goes wrong.

future of data infastructure

According to CEO Kimball, there are three stages for this:

#1 SQL has been evolving for 40 years

Architectures were once monolithic. They all sat in one place and had to be scaled up.

#2 When web happened, a lot of innovation was necessary

Data building needed to occur that could handle global scales, web scales, and further. This kicked off the NoSQL movement.

#3 No scalability redundancy

We are now entering a new phase, where the relational SQL model is being married with NoSQL scalability redundancy.

Overall, there has been a remarkably fast evolution. This poses the question, How important is it for data infrastructure to be fully cloud native at this time with more apps moving to the cloud?

The truth is, you can’t switch fully to the cloud with a snap of a finger. It is super important for any new technology including databases to be more sympathetic to underlying cloud primitives. It is crucial you build a bridge for big enterprises and meet them where they are. If you aren’t planning for net new starts and increasing migrations, you’re going to miss the boat.

So where does open source play in the future?

It remains incredibly important. Open source took over because it is a far more efficient consumption model. You are now consuming services, and developers can work on API without having to actually understand how to run it. Some of the best services are based on open source and the best service has extremely powerful free tiers. There is a tight interplay between cloud and open source when it comes to developer-facing products like databases

The most important key takeaways:

#1 The digital transformation age has passed.

#2 Data Infrastructure is the backbone of modern business.

#3 Successful technology companies are developer and practitioner centric.

 

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Need Leads in Q4? Sponsor SaaStr Scale!


This post is by Jason Lemkin from SaaStr

So our SaaStr Digital events since March have been wildly successful — much more than we expected.  With 100,000+ total attendees, and probably 200,000+ including on social, we’ve had a ton of fun and learned a lot, from the CEO of Slack, Box, PagerDuty, Unsplash, and so, so much more.

Our next big Digitial Event will launch next week, SaaStr Scale 2020 on Dec 8-9.

But if you want to partner with us and sponsor Scale, and connect with 20,000+ Cloud founders, CEOs, and execs … get ahead of the line.  We’re limited to about 10 core sponsors in the current format.

Reach out here:

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How To Still Hire a Great VP of Sales Even If You Are Struggling


This post is by Jason Lemkin from SaaStr

When you are finally ready to hire your VP of Sales, oftentimes, there’s often a bit of a quiet panic around time.  About getting the hire done.  Because there’s a window.   Even if you are growing like a weed up to $1m, $2m, $4m ARR or beyond … you can see growth is going to slow down without help.  You can’t hire more reps yourself.  You don’t know the rest of the playbook and don’t have the rest of the toolkit.  You can see that even with great sales rep efficiency with say 1-3 reps, it is going to slow down unless you bring in that VP in time.

And indeed it often does.  If you don’t hire the management you need for each stage, you’ll almost always at least slow down at each phase transition.

But then so often, I see startups still able to hire a great VP of Sales even after sales slows down a bit.  Often, to much less than outlier rates.

Why?  Why would a great VP of Sales hire a start-up with mediocre growth?

Because great VPs of Sales aren’t dumb.  Some of the most proven ones only want to join the next Snowflake or Zoom.  If they truly have it all, they will wait for that shot.

But the most self-aware stretch VPs of Sales know they aren’t going to get called up at Zoom, so they look for the next best thing.  And that’s probably:

  • A decently-enough funded startup (so they can hire)
  • With a great CEO they believe in (so they can run)
  • With at least a mini-brand (to back up sales)
  • With leads.   With demand.

And a great Stretch VP of Sales can come in and see say 30% annual growth paired with a beloved product and tons of leads … as an opportunity.

And opportunity to turn that 30% growth into 50% growth with a few tweaks to the sales team.  To 70% growth with a new playbook and some strong hires.  And 100% growth with a great VP of Demand Gen to help them.

They know when they see the raw ingredients of success, and know if they can turn that into something special.

So if growth has slowed down, but you have happy customers, a mini-brand and leads … don’t hire your challenges from those VP of Sales candidates.  And don’t assume you can’t hire one.  Share the good, the great — and the challenges.

You’ll be surprised that 1-2 stretch candidates at least are up for that challenge.

And a SaaStr Classic on how this happens:

How My VP, Sales Doubled Our Sales in 90 Days. And No, It Wasn’t Magic.

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5 Leadership Lessons Everyone Needs Right Now From Github COO Erica Brescia


This post is by Amelia Ibarra from SaaStr

One of our top sessions from our recent Annual at Home event was from Github’s COO, Erica Brescia. For those unfamiliar with her background, Brescia started off as the founder and COO of Bitnami, a 75 person startup. Just over a year ago, she sold to VMware and the company has since doubled in size.

In her session, Erica shares her hard-earned leadership lessons–  from selling her company to what she’s learned at Github, we’ll share her most essential leadership principles for any stage of business.

#1 Build a Support Staff Early

The truth is, founders are frugal. You want to lead by example and get everything done with your own two hands. But that “do it all” mindset, is actually harming your ability to execute. In fact, every task you do that is not actively building your business is distractive of the work truly adding to reaching your goals. Time is a founder’s most precious commodity, and you must use it wisely.

Erica’s Key Advice:

  • Hire an Executive Assistant or Office Manager right away
  • As you scale, evaluate how you spend time
  • Speak openly to others about the support you are getting

#2 Focus Leads to Deep Thinking

A question posed by several founders is, “How do you use your time to focus more clearly on building the business?” The answer is simple. Continually handoff chunks of work so you can remain focused on the bigger picture. Saying no is far more important than taking on more tasks than you can handle. In fact, Erica says no about 90% of the time and claims, “it’s probably still not enough”. You can’t do your best work and focus unless you leave free time to take care of yourself physically and mentally.

Key Points:

  • Say no more often
  • Delegate Aggressively
  • Schedule time for focused work
  • Take time out of your element for deeper thinking

#3 Push Decision Making Down

Now that you have a team, learn to rely on them to make important decisions. Making the shift from knowing every day-to-day detail, to allowing your team to make decisions is crucial for business growth. Think of it this way: You are an airplane 40,000 ft up. You can see all the houses and shapes, but you can’t tell if that’s your dear Aunt Susan walking down the street. As a founder or COO of a company, it is virtually impossible to know every small detail happening within the company at a given moment. You can know general concepts, but specific details are not crucial to your vision. The people closest to the problem, probably know best.

Key Points:

  • Communicate your vision and expectations
  • Empower your team to make decisions
  • Facilitate cross-functional collaboration

#4 Communicate Thoughtfully

People in different respective areas of business have different perspectives. Each area of people has different priorities and digests information very differently. If you want someone to remember something, tell them five times in five different ways. Always be careful about what or when you communicate, and your implication of decisions.

There are four key characteristics of achieving effective transparency:

You must be…

  1. Timely
  2. Strategic
  3. Shareable
  4. Actionable

Key Points:

  • Have principles for what, how, and when to communicate
  • Adapt how you communicate as you scale your business
  • Communicate in partnership with managers

#5 Know What Great Looks Like

If you’re just starting out, chances are you’ve never had to hire someone in a senior position role, and it may be hard to know who to hire. These are some of the most crucial hires you will make in your business; having the right person can make it, and having the wrong person can break it. The best thing you can do is meet as many exceptional people in that field as possible. Even if you could never possibly afford to hire them, you can learn how to find people on top of their game, and you develop an archetype of the type of person you need in your business. It’s crucial to lean into your network when making important hires.

Key Points:

  • Be proactive, and find out what great looks like early on
  • Leverage your network to learn from great leaders
  • Build archetypes specific to your company

BONUS: #6 Create a Growth Environment

After hiring great people, you must create an environment in which they see clearly how they contribute to success. Everyone wants to feel like they belong. If you have burned out people who don’t feel valued, supported, and cared for, they will either quit or drag the rest of your business down with them. In a study by Mckinsey, there is a 21% improvement in workforce effectiveness when employees’ mental health is supported.

Key Points:

  • Build and communicate a clear mission and vision
  • Use OKRs to drive execution and help people see how their work contributes to the company’s success
  • Build an inclusive environment and cultivate a sense of belonging in all the employees
  • Invest in mental and physical health and wellness

Watch Erica’s full session below, or click here to listen to it as a podcast.

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Speaker Submissions are OPEN for SaaStr Scale 2020!!


This post is by Jason Lemkin from SaaStr

Ok on the heels of 100,000+ across social, Zoom and more at 2020 SaaStr Annual at Home, our next big digital event is the 2nd edition of SaaStrScale.com on Dec 8-9.

Scale particularly focuses on helping founders scale to $1B ARR … and beyond.  We’ll have top CEOs like Todd McKinnon, CEO of Okta, and Howie Liu, CEO of Airtable, top product leaders like Carl Gold, Chief Data Scientist at Zuora, and 40+ CROs, CMOs, CCOs, and much more!

We’ll also have 100+ roundtables and workshops and much more.

We are now taking speaker submissions, so if you want to lean or join a session or workshop, please apply here:

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That Super-Successful VP of Sales. Great? Or Just Lucky?


This post is by Jason Lemkin from SaaStr

I get sent this resume to review all the time. Director+ of Sales at Slack / Zoom / DropBox / Pick Your Brand Name SaaS Company. Took Hot Start-Up from $0 to $30m as VPS from Day 0. Was there “early” through IPO and did amazing things.

That all sounds impressive, for sure. But were they great? Or just lucky?

The thing is, it’s actually hard to know on the surface. Because it’s not ARR growth or even an IPO alone that determines if a VP of Sales him or herself is great. Because so many people were involved in getting Salesforce to $20,000,000,000 in ARR. It’s really how well they did based on a situation. Come into a #2 player and turn it into #1? That’s kind of amazing. Come into Salesforce at $2 billion and help it get to $5 billion? I mean, that’s great … but … not the same thing. And there were probably 100+ RVPs of Sales at that point. They aren’t all great. Really, only a subset are — at least in the context of jumping into a VP of Sales role at a SaaS start-up.

So when I meet a Candidate from Very Well Known SaaS Company, I add a few extra questions to my interview, and focus extra on some we always try to ask. To see if they really did it … or at some level at least, were just lucky.  Or at least, had so much help, so much infrastructure … that they may not be able to do it at a true start-up in a competitive environment.

My extra questions:

  • How much of your team did you actually recruit yourself?  This question is always important, but especially for someone from a Very Successful SaaS company. Because often, the managers were given a team, or a lot of it. That’s not remotely the same as recruiting your own team.
  • What’s your current team-level quota?  And what % of quota did you hit last year?  If she manages say 8 reps, what’s the total quota she’s responsible for? 8 x $800,000 = $6.4m, for example. You’d be shocked how many “directors” and “VPs” at bigger SaaS companies that are in “sales” don’t have a quota to hit. Pass on these hires. At least until you’re at $100m ARR. Maybe, always.
  • Why / why weren’t you promoted?  This is a trick question, in a way. Promotions are important, but a ceiling is less of a flag for me. It’s OK if your Director of Sales from BigSaaS Co never made VP at a BigSaaS Co. There may be many good reasons. Management change. Different strategy at $200m ARR than $30m in ARR. I like to see at least one promotion, that may be enough, as long as they are a true manager. But if they stumble with the answer, can’t answer it honestly … they’re not a real manager.
  • Do you currently hold a quota or commit? Why or why not?  If he or she hasn’t held a quota in a while, I don’t like it. Why did you get “promoted” out of a quota-carrying job? Probably because you weren’t that great at carrying a quota.
  • Who are your best 2-3 reps ever? And why? Will they come with you?  Not unique to BigSaaS Co candidates. But even more helpful here. If they won’t come, Houston, we have a problem. If the question isn’t answered with absolute ease and fluency, Houston, we have another problem. And why will these reps excel at your company?
  • Why did you leave? There are many good and fine reasons to leave. But if they struggle to answer crisply and coherently — that’s a flag. There should be a clean, clear, obvious reasons To Leave Something So Great.
  • Will your boss say you’re one of her best hires ever?  Really her boss should. If not, we may have a problem. If the candidate stumbles here … I’m pretty sure she was lucky. Not great. Get some stories here too.

Dig in more along these lines. Don’t get suckered into the ride she was on. No matter what, make sure this candidate really did it. Not just knows how to talk the talk. Because all managers know how to talk the talk at Big Successful SaaS Companies. All of ’em.

It will help you find out if that seemingly terrific candidate (on paper / LinkedIn, at least) from that Super Successful SaaS Company really did it. Or — was just lucky.

(note: an update classic SaaStr post)

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You Don’t Want Your Dream VP Candidate


This post is by Jason Lemkin from SaaStr

Ok this is a simple post, and one we’ve touched on many times before.  But it deserves its own post because it’s a mistake so, so many of you will make as you go to hire your first VPs.  And even your second VPs.

Don’t hire the “Hot VP”.  Not until you are equally hot, at least.

What do I mean?  So many founders, especially first-time founders, fall in love with That Great VP They’ve Heard Of.  The one at SaaStr Annual at Home.  The one that worked at Dropbox, or Slack, or Twilio.  The one on the podcast you listen to.  The one on twitter.  The one that won the VP of the Year awards.

And if they did all that at say Twilio in early days … and your product is a little like Twilio … well, they’d do magic at your start-up!  Won’t they?

It can be true.  But, 99 times out of 100, even if you get to that Hot VP, get her to meet with her, and closer her … she’s just not that VP anymore:

  • They doesn’t want to be so scrappy again.
  • They doesn’t want to do it all again.
  • They need a much bigger team.
  • They don’t do as well without a brand behind them.
  • They are convinced their way is the right way.
  • And more often that not, they weren’t even that Amazing VP you think they were back then.  Being part of a Hot Startup made them seem like a magician.

Lighting does strike twice in great VPs — but even when it does, it doesn’t strike the same way.

None of us can go back in time.  If you hire that great, “Hot” VP today, that did it all, remember you are hiring her as she is today.

Not as she was.

It rarely works out.

If nothing else, at least do more diligence.  And not with VCs, or other Hot VPs.  With their old bosses.  With their direct reports.  And make sure you are at least aware of who you are hiring.  Not what you want to believe, and see.

That Super-Successful VP of Sales. Great? Or Just Lucky?

 

 

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Top 7 Regrets in Hiring VPs. Firing Them Is Not One of Them.


This post is by Jason Lemkin from SaaStr

Q: Have you ever regretted firing an employee?

No.

I’ve regretted, and still regret almost daily:

  • Waiting too long to make a critical hire. You overload the existing team, and progress stalls out.
  • Not closing my A+++ top choice for a role, no matter what it took. This haunts me to this day. When there is a true game-changer, do whatever it possible takes to close them. And then even when they say No, remember, you still have another chance next week, next month, and next year.
  • Underhiring. Not hiring someone experienced enough for a role.
  • Hiring for the logo.  Just because they worked at Zoom or Twilio does not mean they can do it at your little startup.
  • Not topping a hire that has truly reached their limits. It’s tough to time this right, but if you leave someone in a senior role too long, once the business has gotten too big, you slow down.
  • Settling for a top hire. At some point, sometimes, enough time goes by that you have to settle. But it’s never a great thing.
  • Not working things out. With a key employee that left. Don’t let emotions cloud your decisions here too much. Find a way to keep the great ones, even if the role and position have to change.

But firing?

For most of us, by the time that comes — we realize we should have done it months ago. Not only has the damage been done, but it continues to compound. And so much time was lost, without progress.

That, you never look back on. You just wish you’d done it much, much earlier.

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Cloud is Eating all of Technology and Software… Is it Sustainable?


This post is by Amelia Ibarra from SaaStr

If you’ve been to any recent SaaStr Annuals, you’ll know that one staple of the event is Byron Deeter of Bessemer Venture Partners launching the latest edition of Bessemer’s State of the Cloud — live.

And while we had to re-imagine the Annual as an At Home event for 2020, both Byron Deeter and Elliott Robinson of BVP were gracious enough to update the State of the Cloud 2020 to include their learnings of COVID-19’s impact on the market.

A few key learnings and top trends to consider:

#1 There is unlimited potential; even with COVID ‘craziness’

As we continue to face and adapt to the challenges of COVID-19, many companies are turning to Cloud for Business Continuity and growth. During the COVID crisis over 400,000 storefronts made the switch to e-commerce. This will usher in unlimited potential for new innovation and growth in SaaS and Cloud.

# 2 Cloud is Eating Software

Just twelve years ago, the entire market cap of top five cloud companies was less than 14 billion dollars. Rolling forward just seven years that has jumped eight times, and another staggering 61 times in twelve years. Now, across all industries, 94% of companies today use at least one cloud solution. The astonishing fact is: cloud is eating software. In just five years, Cloud will become the majority of the software market. By 2030, it is predicted to take over all technology and software. Think of this take over like a Pac-man eating effect. Cloud will continue to consume until there is little to nothing left. state of the cloud BVP

This poses so many questions to business owners and investors. Is this good or bad? Is there potential? Is this growth sustainable?

YES- zoom out, think of not only cloud and its current market size, but at the tech industry as a whole. The tech industry is our addressable market. Hardware is turning soft, and software is empowering innovation. It is predicted a large percent of global GDP will be cloud based in years to come. 

The truth is- Cloud is still in its early days. It has an extremely long and powerful future ahead. 

#3: In the cloud economy, scale wins.

In the last decade cloud companies have scaled much more rapidly than in the past. All cloud giants entering the market today, grow much quicker. This is mostly due to “finding your second app.” A software company called Toast, started off as a P.O.S system, and offered payroll and capital as a second app. 

#4: Invest behind the cloud sales and marketing curve. 

Your early days of marketing are known as your Initiation days, here is where you gather your founder-led sales and wear multiple hats. Next you’ll tackle your transition phase to test two or three reps. 

During these phases, make sure to calculate your CAC payback. This is crucial to analyzing a period back, and finding out how much it costs to acquire a customer. To find this, divide by the gross margin. How many months does it take to turn a new customer into a profitable customer?

This is important today since there is so much uncertainty in COVID. You must figure out payback on a monthly basis. Nail it before you scale it.

#5: Tone starts at the top

Yes that’s right, as the founder and CEO it is essential to clearly state your company’s mission or vision. Be sure to:

  1. Define culture and core values.
  2. Report on employee engagement metrics.
  3. Conduct 360 feedback. 

If you can’t measure it, you can’t change it.

2021 Predictions:

  1. The future of work will be remote. 
  2. Privacy Debt will be the new technical debt.
  3. Cloud Industry will continue to proliferate around the globe. 
  4. B2B transactions move online. 
  5. The API universe will drive innovation across all industries 
  6. We’re entering the age of “automation at scale”. 

Watch the full State of the Cloud 2020 below, or click here if you prefer to listen to it as a podcast.

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What’s Your Loss Rate? You Really Should Know


This post is by Jason Lemkin from SaaStr

A ways back on SaaStr, we wrote a classic post, Beware of the Confidence of High Win Rates.  It’s something I see again and again, especially below $2m in ARR or so.  A start-up says they have a lot of problems, but winning deals isn’t one of them.  That they win every deal they are in.  Well, of course these early stage start-ups win all these deals.  Because they are only invited to just a very small percentage of the dances.

So ultimately, it’s healthy and positive to see win rates decline after $1m-$2m.  That means your mini-brand is coming into its own, prospects are starting to hear about you, and that marketing, one way or another, is starting to work.  You are getting into more deals that you aren’t ready for.  That’s OK.  You’ll learn from the ones you lose, and that gives you a roadmap to grow and improve.

And once start-ups start losing more deals, they don’t do the next thing they really should do.  Track their Loss Rate.  And just as importantly, every week, have a Win-Loss meeting.

If you don’t track your loss rate, even as your win rate goes down, you can lull yourself into a sort of false sense of “we’re doing great.  we’re doing as well as we can”.  Imagine you are at $3m ARR, growing 100%, burning little, with a 60 NPS.  You can kind of get … slightly complacent.  Things are going well.  But imagine your loss rate is 60% (you’re in a competitive space).  What would happen if you closed just a handful more deals, and drove the loss rate down?  You’d go from amazing growth, to outlier growth.  But if you don’t measure it, you can’t improve it.

Tracking your Loss Rate, somewhat counterintuitively, is NOT the same as the converse of your Win Rate, at least usually not initially.  Why not?  It’s too easy to make up numbers in a less than rigorous Win Rate analysis.  Tracking Loss Rate first and foremost forces the AEs and others to close out every Opportunity after a certain time, and be clear if it was Lost — and importantly, to Whom.  This generally will uncover a Loss Rate that is higher than what a roughly tracked Win Rate would suggest.

And that will give you a roadmap to winning more deals, building better software — and pushing yourself harder to do even better.  Even, and especially, when things are already pretty good.

So two suggestions:

  • Start this week with a Win-Loss Meeting with the sales team every week (or at least, every 2 weeks).  Everyone talk about one deal they won, and importantly, one they lost and why.  Sharing this information is a critical part of training and information exchange, and is also a great bonding experience.  It will also introduce Loss Rate DNA into the team organically.
  • Once you have the Win-Loss cadence going, force a rule in Salesforce to calculate Win-Loss-True Hold from every Opportunity.  And they track it monthly and quarterly.  And set a goal to drive down the Loss Rate quarterly.  Yes, this goal will inherently be subordinate to your overall ARR and bookings goal.  But it will also serve as a key cross-functional KPI for marketing, sales, and product, all together.
  • Discuss why you lost every bigger deal, even every deal if you can.  Also maybe even at every all-hands meeting, too.  This will be eye-opening to many folks, not just in sales and support but engineering and across the whole company.  It is too easy just to move on past lost deals and forget about them, especially when overall growth is decent.

Take both of these seemingly simple steps, and in the end, you’ll close more deals.  You’ll be living more in the real world, and you’ll push yourselves to do better than if you simply celebrate your new revenue and wins for the month.  Of course, do that too.

(note: an updated version of a SaaStr classic post)

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6 Ways Top Accelerators Have Changed Since Covid Hit


This post is by Jason Lemkin from SaaStr

Q: How are accelerators managing remote cohorts?

I can’t literally answer for an accelerator, but as an investor here’s what I’ve observed:

  • It’s a huge, huge boon for start-ups not based in SF / NYC / etc. No one cares anymore. This is a big, big change.
  • Investing has accelerated even faster. All the stakeholders can get together even faster now. So decisions can be made even more quickly, especially for slightly larger checks that require consensus.
  • The 1 slide summary is even more important. There’s too much to process digitally, so if the summary doesn’t hook an investor, it’s tougher than ever. You click and move on, rather than stay in your seat and quietly check your phone.
  • Ballooning class sizes. Many accelerators seem to be taking advantage of the move to digital to materially increase the number of start-ups in their accelerators. This may further reduce the value of many accelerators to a relatively limited amount of … acceleration.
  • Many more investors participating in demo days.  Many, many more. Venue size and travel are no longer issues.
  • Even more focus on fundraising as primary goal. For the past years running up to Covid, many accelerators seemed to de-emphasize a seed round as the end point of a program. But with seed investment sped up since Covid, and not geographically limited … with 10x-50x more investors participating … “getting funded” seems to be the primary goal again.

Net net, it’s somewhat surprising, but going virtual seems to have helped the top accelerators, and their portfolio companies.  Digital has truly not just flattened the world, but dramatically expanded the pie of investors they can attract.  I thought going virtual would be a net negative for accelerators.  I was wrong.

 

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The Top 10 Videos of the Week: ClickUp, YCombinator, Unsplash, ZoomInfo and More!


This post is by Jason Lemkin from SaaStr

This week was our “dead week” at Team SaaStr where we rest and recover a bit from 2020 SaaStr Annual at Home.  Look for more news soon on our next big digital event, new products, and more — soon!!

With 120+ sessions at SaaStr Annual 2020, the Top 10 Videos of the Week are stocked with some of the most popular sessions.  Let’s take a look:

#1 “Almost Screwed: Bootstrapping From $0 to $20M ARR in 2 Years with ClickUp”.   Bootstrapping is always a popular topic, but I was a bit surprised to see this hit #1!!  A great session on how to go big before you raise that first round:

#2: “The 5 things that kill startups after their seed rounds with Michael Seibel, CEO of Y Combinator”.  I knew this session would be good.  But it was even better than I expected.  All of little team SaaStr watched it together and shared our learnings in real time.  Take a watch:

#3  “Churn is dead. Long live Net Dollar Retention Rate with Dave Kellogg”.  Dave Kellogg, ex-CEO of Host Anayltics, SVP at Salesforce and more always brings it.  This session too was even better than I expected, on the cheats and fictions in how folks measure churn.

#4 “Founder Power: Venture Debt & Other Alternatives to Equity in 2020+ with Nathan Latka”.  This was our first SaaStr session with founder favorite Nathan Latka, and we asked him to do something a little different and summarize all the new options available to founders to raise capital … without selling shares.

#5 “The Cadence: How to Turn Your SaaS Startup into an Army” With David Sacks of Craft Ventures.  OK this isn’t a brand new one, but it’s a great one from our recent New New in Venture event.  I’ve been personally thinking about this session a lot, including pacing the team and creating a sane cadence building up to events:

#6: “From $0 to $400+M: 10 Mistakes the CEO of ZoomInfo Made on His Journey to IPO”.  This was a special session.  Henry had followed SaaStr since the early days and created a custom session just for us on his Top 11 Mistakes.  We did a deep dive together and this is one I think any founder will benefit from:

#7: “The Secrets to Closing Really Big Deals with Sequoia Capital India, Sequoia, Vymo and Insider”.  I was pleased to see this session turn out to be so popular.  It’s a great session both on what’s going on in SaaS in Asia, as well as how to close $100k and $1m+ deals:

#8: “How To Really Disrupt the Big Guys — With Free with Unsplash”.  Everyone at Team SaaStr loves Unsplash, and I reached out to CEO Mikael Cho when I realized I’d never read or heard the real story.  Unsplash is one of those products that is so good, you can’t believe it’s truly free.  How did they get there?  How did they start without coding?  A great session:

#9: “What Being a Founder Taught Me About Leadership – Lessons from Eric Brescia, GitHub’s COO”.  This was a reschedule from SaaStr IRL and there were a bunch of conflicts and I was worried it might not happen. I am so glad it did!  Many of these lessons are ones we sort of know, but Erica deeply prepared it with hard learnings and real stories of how to scale.  When it came on the office, everyone stopped what they were doing and listened:

#10: “The Secrets to How Flodesk Bootstrapped to $5M ARR in Less than a Year”.  Another great session on bootstrapping that was more popular than I expected, like Clickup.  A lot of great discussions on how to focus, and where to place your bets, in the early days.  Especially when capital is super tight.

 

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How To Get Better at Recruiting. (We All Need To).


This post is by Jason Lemkin from SaaStr

Recruiting is tough. I certainly don’t do it well enough. But to be a great CEO, you need to find a way to force yourself to be a great recruiter.

Let me share some learnings, and what I do now to force myself to be a better recruiter.  And what I wish I’d done better as a SaaS CEO:

  • Force yourself to interview 30 candidates for each VP position. Great things will happen if you do. First, you will budget a ton of time for recruiting. You’ll have to, to get through 30 interviews. Second, you’ll force yourself to spend more time tracking and managing candidates. And third, you’ll be less likely to settle. You can stop if the Perfect VP turns out to be Candidate 12. But plan on 30.  Find a way.
  • Hire external recruiters — and be very good to them. External recruiters are juggling multiple clients and multiple sources. And contingent recruiters only get paid if they place a client. So be cool to them. Be responsive. After each of those 30 interviews — email over a note on your feedback. Be timely. If you don’t respond to an email from a recruiter with a great candidate — she’ll start to give up on you. And don’t worry about the cost. Getting a great candidate is more than worth 10%, 15%, 20% of first year salary.

Screen Shot 2017-04-27 at 1.53.29 PM

  • Hire an internal recruiter, too, as early as you can. At least as early as you are hiring more than 1 new employee a month. It’s way too many meetings, way too many candidates, to have individual VPs and employees manage these processes themselves. And do NOT expect your internal recruiter to save you external recruiter fees. She may. But she may also bring in even more, better external recruiters. And she can manage AngelList, LinkedIn, and other platforms that are critical but produce a ton of noise.  I wish I’d hired an internal recruiter even as early as employee #10, with hindsight.
  • Find screening filters you can apply before the first Zoom / face-to-face. Programming tests if you want / believe in them for engineers. A written critique of your product for a product hire. Thoughts on what would work well in the sales process for a sales rep.  Whatever. Something that ahead of time shows they have a brain, are engaged, and might want the job. A fun “test” that takes 5 minutes and doesn’t seem like a test.  There’s a reason internal recruiters like tests.  They know it saves them a ton of time in avoiding bad face-to-face first meetings.
  • Assume your personal and extended network does NOT source the candidate. This is a rookie error we all make. We’d all love to hire from our “networks”, especially in the early days, when cash is king. And hunt candidates ourselves.  But we all fatigue our networks — and quickly. Assume your network won’t be able to produce/source the candidate, and you won’t have an excuse. And you’ll get the hire done faster.
  • Listen. Look for flags. Almost always, flags, issues you see during the recruiting process … become just Bigger Issues after you make the hire. Spend less time asking structured questions, and more time listening carefully to flags. No candidate is perfect. But the flaws you see in the interview process will be amplified 10x once the hire is full-time. Make sure you are comfortable with the trade-offs.  Whatever you do, don’t gloss over flags.
  • Don’t assume because you are so charismatic and your startup is so great you can close anyone.  Bring in the cavalry.  So many Driven CEOs assume they can close any candidate as long as they can get them in the door.  It’s not that simple.  Because there are 100 other Driven CEOs who also think just the same way.  Get your co-founders, your investors, your public advocates, everyone you can involved in closing the best candidates.  At least, as necessary.  And do PR if for no other reason than to help with recruiters.  There are so many 1000s of start-ups.  Do that extra podcast, that extra event, that extra blog post, that extra press interview.  They help with recruiting, even if they don’t help with anything else.
  • Drop other stuff.  Almost nothing really matters, once you have traction, other than building the team. Before too.  But especially after.  A great VP can cure almost all ills in her functional area.  Stop trying to run sales yourself.  Let the month and even the quarter go if you have to.  Spend that time hiring the VP to own it, instead.

These are the 8 “tips and tricks” that help/helped me the most at least.

As you scale, as much as 50% of your time may end up be spent in recruiting.

It’s the job.

(note: an updated version of a classic SaaStr post)

The post How To Get Better at Recruiting. (We All Need To). appeared first on SaaStr.

What’s a Big Check for an Investor?


This post is curated by Keith Teare. It was written by Jason Lemkin. The original is [linked here]

 

Q: What’s considered a large amount of money for an investor?

A rough answer is more than 1.5%-2% of their investable capital is a “lot of money” for most professional investors. 2% is a pretty standard target for most core VC investments, and then more than that starts to become risky. And 5% starts to become a “this investment has to work” investment.

So take say a $150m venture fund:

  • A $250k or $500k investment is immaterial (0.1%-0.3%). It can generally be done quickly with limited diligence.
  • A $2m-$4m investment is the sweet spot. That’s 1.5%-2.5% of the fund. Enough to move the needle, but not so much it can’t be written off.
  • A $7m-$8m+ investment can work if there is “high conviction” in the investment, but is stressful. That’s 5%+ of the fund.
  • Anything more than this is super risky and rare for a VC fund.

Do this quick math to know where you stand with a VC.

The post What’s a Big Check for an Investor? appeared first on SaaStr.

What’s a Big Check for an Investor?


This post is by Jason Lemkin from SaaStr

 

A rough answer is more than 1.5%-2% of their investable capital is a “lot of money” for most professional investors. 2% is a pretty standard target for most core VC investments, and then more than that starts to become risky. And 5% starts to become a “this investment has to work” investment.

So take say a $150m venture fund:

  • A $250k or $500k investment is immaterial (0.1%-0.3%). It can generally be done quickly with limited diligence.
  • A $2m-$4m investment is the sweet spot. That’s 1.5%-2.5% of the fund. Enough to move the needle, but not so much it can’t be written off.
  • A $7m-$8m+ investment can work if there is “high conviction” in the investment, but is stressful. That’s 5%+ of the fund.
  • Anything more than this is super risky and rare for a VC fund.

Do this quick math to know where you stand with a VC.

The post What’s a Big Check for an Investor? appeared first on SaaStr.