By Andy Miller and Dino Di Palma, Managing Partners at True North Advisory

At True North Advisory, we have a number of clients that are either early venture backed or still privately funded. Each is facing the same challenge of making their first hire for a VP/GM of sales, and find it daunting. At True North, part of our advisory offering is to help in the process of recruiting the right person, and assuring the highest level of success of this all important hire.

We stress that the first hire of a VP/GM of sales is the most critical hire, and the mistake of hiring the wrong person is a long, expensive  and drawn out process that hurts the business in more ways than one. We have all learned this through experience where we have hired many great sales leaders and, at  the same time we have all made the mistake of hiring either too fast, for the wrong reasons or pressured by outside forces. The result created a significant pain for the company, both quantitatively and qualitatively. 

Here’s some quick facts:

• The tenure of an average sales leader in tech is roughly 19 months

• 70% of SaaS first VP's don't make it to 12 months

• It can cost upward of 200% on top of what you have already spent to replace an VP/GM of Sales

And not only are those facts stacked against you in your first hire, but some of the events caused by a bad VP/GM of sales hire are:

• Average time to source and onboard a new VP hire is 9 months, and typically at least 25 people interviewed in the process. 

• Jeopardizes the buyer journey and customer experience, creates negative customer sentiment 

• Disrupts the team in a negative way, when you need continuity the most. 

We always tell our Founders that there are three mistakes on hiring the wrong VP/GM of Sales:

1. Unrealistic expectations by Founder - Do you have the right product/market fit to be able to scale ? Are the targets aligned to market opportunity ? Can this person both sell and manage?

2. Unrealistic expectation by the candidate- Are they focused  on the rosey view of how they would like the company to operate in this new environment vs what it is really like in practice? Will they truly have the resources in the early stages to achieve the success they expect? 

3. Falling for a referral that did not work out- Recommendation from the board or trusted advisor.

So, with all these challenges and potential risks, how does one navigate through finding the right sales leader? Here are  top five recommendations:

1. Always be intentional. Ask yourself: What problem are you trying to solve? What does the business specifically need right now? What is the market telling you? What stage is your business in?

2. Know what good leadership looks like. That’s someone who creates an environment where people can express their thoughts without fearing criticism or negative thoughts. Culture is key! 

3. Someone who is a master listener. This includes not only listening to your clients, but also your team and the industry. These are the foundations of becoming a great communicator.

4. Someone who is an innovative leader. This is someone with an unwavering vision and plans to make it happen. 

5. Someone that has these key traits:  Aligned to the mission, multi-dimensional, resilient, holds themselves accountable, strong EQ and strong IQ, and knows how to hire, onboard, support, and retain their team.

Aside from the above traits we drill down on the areas where we have both made great hires, and fell short with mis-hires. We always sit with the founder and work through the following:

• Take time to personally speak with the candidates' references, do not outsource. Be very clear on your questions.

• Why did they leave their former role, and why are they focused on your opportunity?

• Is the fit one that is for the needs of today, for the medium term or long term?

• Can they scale from a single individual contributor to managing a team?

• Can they both sell and manage or just one of the two?

We see all the time that the Founders are intrigued by someone who's resume calls out a stellar background in managing a successful startup team. But what if the real role is to be the first sales hire and is challenged to both sell the first logos and at the same time have the ability to scale and hire a team. 

These types of people, someone who can roll their sleeves up and sell, sell, sell and has the experience in leading and building a team are very hard to find. That is the key in why the hiring process is so key, it's a rare hire that can scale from hire #1 in Sales to a VP/GM so make sure you are clear on expectations, and focus on getting out of the gates around material and sustainable growth. 

Several years down the road you will more than likely have to make another hire that has the experience is scaling from $50-$100M, but first things first, make the hire that wants to sell and then grow!  

We look forward to your feedback and to help our clients get this right!