Hint: Don’t look at the guy who participated in last year’s high-flying IPO.
By: Andy Grosso, Founder
Sales leadership can make or break a company. A sales leader is directly responsible for how well the revenue engine of a company works. It’s one of the most critical hires any company will make. And it’s also the hardest. Here’s why:
The tech sector is projected to grow at more than 13% between in the ten-year period ending in 2026 according to federal numbers.[1] Unemployment is at a 50-year low, and there is plenty of venture and PE money out there, fueling new ideas and disruptive technology companies. So, what’s the bad news? Hiring has never been more challenging. And, hiring a sales leader who can actually drive revenue, is a risky bet. HBR research of 400 sales leaders shows that the average tenure of sales VPs in tech is only 19 months. What’s more, there’s a 51% gap in quota attainment between high-performing and low-performing sales leaders. The high performers achieved a 104% quota while the low performers only achieved 54%[2].
If you land the wrong leader in your game of “Hire a VP of Sales Roulette”, your company is likely to lose big.
What do you need to look for in the right sales leader? There are the usual characteristics of being fixated on the target, showing reliable sales instinct and acumen, demonstrating self-discipline and focus, possessing an instinct for command that can motivate and focus others, and the ability to fit the culture of the organization. But, these characteristics are hard to find, which explains the tendency for CEOs, VCs and PE teams to gravitate to high-value successes and assume the sales leader at that company has all the magic needed. They’re often looking for a sales leader whose company has recently had a big liquidity event, gone public or disrupted a market in a significant way.
This is the perceived safe bet. I might argue that this is a Sisyphean task. Quite likely, he or she just made $20M bucks and has little motivation to push the boulder up the hill again just yet. It’s a much stronger bet to go after a senior sales leader in an established company who is looking for an opportunity to win big in the casino of Silicon Valley for the first time.
That person is hungry, experienced, and is more likely to take a risk on a new opportunity. For example, we have a client who’s been around for about 10 years (a long time in Silicon Valley terms). The company has a new management team, good products, and market momentum. The board is looking at the most recent acquisitions and IPOs, and saying: “get a sales leader from one of those.” A more successful strategy is to go after a regional VP other senior leader who is excited to build something great at a company where they’ll be THE top sales leader. We are having great luck finding candidates with the skills, experience and fire to pursue the opportunity.
In twenty-five years in Silicon Valley, I’ve learned that betting on the up-and-comer is a better bet. Over time, this bet wins more often than pulling out all the stops to hire the hero of last year’s IPO. When you land a sales leader who is determined to make their mark at THIS opportunity, rather than who made their mark at the last one, you are likely to land someone with the energy, drive, vision and desire to do what is necessary to achieve their own Silicon Valley sales greatness.
Next time: How to leverage equity to land the right sales leader.
[1] https://www.bls.gov/ooh/computer-and-information-technology/home.htm
[2] https://hbr.org/2015/09/the-7-attributes-of-the-most-effective-sales-leaders
Contact: andy@fortrasearch.com