The B2B Cloud industry is projected to grow from $350B in 2021 to $800B+ in 2025. This will mean a lot of new companies and the need for many more VP Sales to lead the revenue team.
Brendon Cassidy has been part of early-stage B2B enterprise sales organizations as the VP Sales for companies including LinkedIn, EchoSign (acquired by Adobe), Talkdesk, and then as a founding advisor to Gong. Now Brendon is the co-founder and co-CEO at CoSell.io.
Based upon Brendon's tenure and success at leading B2B SaaS companies, who better to discuss the journey and keys to success for an early-stage B2B SaaS VP Sales.
First, we discussed any common themes or trends that Brendon has identified over his start-up journey experiences. A very common theme, at up to 80% of companies Brendon has worked with is that companies have a hard time defining the "problem they are solving". This is critical before you can start to build the messaging the sales team will use to explain who they are, what problem they address, and the benefits of solving the problem.
Establishing Product Market Fit requires every company to understand and market validate the problem they are solving and why a company will invest time and money to solve it.
Next, we move from what is required to acquire the first few customers to the next one-hundred and beyond. Brendon recommends that the founder lead the first 5-15 deals as the "sales lead" and then hire 2 salespeople BEFORE they hire the VP Sales.
Hiring the right "FIRST" VP Sales is a common challenge that the majority of start-up CEO's face. In fact, Brendon believes that over 90% of companies do not hire the right VP Sales the first time. Hiring a "hybrid" VP Sales who manages a small team, but also is responsible for direct sales with their own quota is a mistake that many first-time founders make.
Why is the average tenure of a B2B Tech VP Sales only 14-18 months? One factor is the belief that hiring someone from an established, successful company like Salesforce is the best approach. Unfortunately, 95% of the job of an early stage VP Sales is not an experience gains at an established, larger company. Secondly, finding a VP Sales that actually has experience and success in growing a company from the very early days to some level of scale is quite rare.
Four potential early-stage B2B Cloud VP Sales profiles that a founder will need to interview:
-Been there done that with success
- Been there, done that but not successful
- Been there done some of that
- Big company experience, not done that
Defining how much pipeline is required to close "x" deals is one of the first metrics that an early stage VP Sales should measure, understand and act upon. Input metrics to this will include average contact value, sales cycle time and win rate are critical to determining the required pipeline.
Other metrics, such as CAC Payback Period, CAC Ratio, Customer Lifetime Value, etc. are not valuable metrics for early-stage VP Sales, as there is not enough operating history to make these metrics valuable or insightful for decision making.
If you are responsible for driving sales in an early stage B2B Cloud company, are considering hiring your first VP Sales, or have a goal to become a first-time VP Sales in an early-stage start-up, this conversation with Brendon Cassidy is a great listen.