Nov 5, 2020 · 49m · saastr
How to Hire a Great First VP of Sales
0:00 / 0:00
▶ Watch on YouTube →
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
SaaS investor and EchoSign co-founder Jason Lemkin delivers a comprehensive framework on when, why, and how early-stage startup founders should hire and evaluate their first Vice President of Sales. He outlines the critical transition from founder-led sales to repeatable scaling, detailing screening techniques, stage-appropriate hiring, and performance metrics.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Jason holds 96.9% of the talking time here. How this is scored →
Jason as informed peer 0.9 Guest teaching 0.0 Guest disagreement 0.3 Jason pushing back 0.8
speaking balance: gold is Jason, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 34:34 Audience member challenges Jason on VC board feedback
An audience member pushes back against Jason's emphasis on recruiting by noting that VC boards consistently attribute sales leadership failures to process deficits rather than hiring.
Hardest push from Jason ▶ 34:49 Jason rejects VC board perspectives on sales failureJason bluntly refutes the board's logic, arguing that 98% of VCs lack operational background and wrongly scapegoat process instead of taking responsibility for a bad executive hire.
Biggest teaching moment ▶ 34:22 Audience member introduces perspective on high VP turnoverAn audience member details their observations from targeting VC-backed companies, bringing real-world board commentary on sales churn into the discussion.
Jason holds their own ▶ 43:00 Jason provides granular unit economics for low ACV modelsJason authoritatively calculates demo capacities, rep compensation, and volume requirements comparing WebEx, Box, and Zendesk models to prove SaaS rep viability.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Jason as informed peer | Guest teaching | Guest disagreement | Jason pushing back | Why |
|---|---|---|---|---|---|---|
| Founder as First VP of Sales and Hiring Two Reps First | 0 | 0 | 0 | 0 | Jason delivers an uninterrupted presentation monologue on why founders must act as the initial VP of sales and hire two reps first to establish a repeatable baseline. | |
| The Real Role of a VP of Sales: Recruiting Over Closing | 0 | 0 | 0 | 0 | Jason continues his solo presentation detailing the core responsibilities of a VP of sales, emphasizing recruiting capability over individual deal closing. | |
| Timing the VP of Sales Hire and Managing Long Search Timelines | 0 | 0 | 0 | 0 | Jason delivers a solo talk on the exact timing required to recruit a sales leader once repeatable traction is achieved and why top talent takes months to recruit. | |
| Case Study: Cost Center Mistakes vs Accretive Hiring Success | 0 | 0 | 0 | 0 | Jason presents a case study from his own company comparing a cost-center bad hire against an accretive VP of sales who doubled revenue per lead in 60 days. | |
| How a Great VP of Sales Drives Revenue Per Lead | 0 | 0 | 0 | 0 | Jason continues presenting on the specific mechanics of how elite sales leaders drive revenue per lead and properly price up-market compared to founders. | |
| The Danger of Big Company Resumes and Blame Culture | 0 | 0 | 0 | 0 | Jason presents on the pitfalls of hiring candidates with large corporate pedigrees and how failed sales hires create a toxic culture of interdepartmental blame. | |
| Second Order Revenue and Optimizing the Sales Roster | 0 | 0 | 0 | 0 | Jason explains compounding second-order revenue in SaaS and why incoming sales leaders must immediately evaluate and optimize the existing sales roster. | |
| Sales Red Flags: Fixating on Pipeline and Fearing Competition | 0 | 0 | 0 | 0 | Jason breaks down interview red flags including reliance on pipeline vanity metrics and reluctance to compete directly against rivals. | |
| Core Screening Questions: Target ACV and Recruited Talent | 0 | 0 | 0 | 0 | Jason details specific interview screening questions focusing on matching target ACV and identifying which high-performing reps will follow the candidate. | |
| Evaluating VP Performance Within One Sales Cycle | 9 | 0 | 3 | 8 | In the live Q&A, Jason demonstrates commanding SaaS expertise by strongly pushing back on venture capital board conventional wisdom, consultant effectiveness, and pricing unit economics. |
Statements from this episode (29)
Lemkin: Hiring a Great First VP of Sales Accelerates Growth Best
“If you can maximize the success for this hire for your recurring revenue business, this is probably the number one best thing you can do to accelerate your business once you have a smidge of something, right? Once you have a little bit of traction.”
Lemkin: SaaS Founders Must Serve as Their Own First Sales VP
“You have to be the first VP of sales. For the simple reason that if you, first of all, well, two simple reasons. One, you can't attract anybody good when you're that early. A VP of sales wants to make money and want to make a lot of money in their stock, but t…”
Lemkin: Startups Must Have Two Performing Reps Before Hiring Sales VP
“Whatever you do, have two reps that are performing well before you hire head of sales. If you only have one, you're not running an A-B test, and you really have no idea why this one rep is doing well, right?”
Lemkin: Sales leaders who haven't recruited 3-4 good reps aren't true VPs of Sales
“If this person did not successfully hire at least three to four good reps, even if they're young, they're not a VP of sales, ok? If they inherited a team that was somewhat successful, they didn't recruit any of them, They're not a VP of sales.”
Lemkin: Keeping a VP of Sales as a player-coach for a year wastes money
“One of the best, the biggest ways you can waste money is making someone a player coach for too long, because they gotta bring these people in. You can do it for a quarter, right? Prove them out, have them hold a quota, but if you've got this person holding a q…”
Lemkin: Hiring a VP of sales before establishing repeatable process fails 90% of time
“Classic mistake is hiring someone before you have a repeatable process. I don't have a repeatable process. I want to hire Linda to create it for me. Linda will not succeed nine times out of 10. You've got to have a repeatable process.”
Lemkin: Recruiting a high-quality VP of sales can take 6 to 12 months
“You should be meeting with as many potential VP of sales candidates as you can, because this may be a six to 12 month hire.”
Lemkin: Mediocre Sales VPs Are Cost Centers; Great VPs Are Accretive
“And it turns out a mediocre VP of sales that's just closing the deals you would have closed otherwise, but taking 300,000 dollars out of your own pocket is clearly a cost center. It's a frustrating, painful, expensive cost center. But a great VP of sales, and …”
Lemkin: EchoSign's second VP of sales doubled revenue per lead in 60 days
“I hired my second VP of sales, who was one of my customers. He was the first head of sales from LinkedIn. Within 60 days, he had doubled the revenue per lead.”
Lemkin: Founder CEOs underprice and underposition their products 85% of the time
“As founders, as founder CEOs, Eight and a half times out of 10, we underprice and underposition, ok?”
Lemkin: A great VP of Sales pays for themselves at $1.5M ARR
“And as long as you're even at a million and a half in revenue, whatever that OT, the on target earnings, The total amount you pay him or her, as you can see in the match, he or she will pay for themselves.”
Lemkin: Sales VPs from giants like Salesforce do not work at startups
“We know that the Oracle VP doesn't work. Salesforce is the same as Oracle today, right?”
Lemkin: 70% of startup founders hire the wrong VP of sales
“Why do 70% of folks hire the wrong VP of sales?”
Lemkin: A bad VP of sales is worse than no hire at all
“But I think, actually, of all the bad hires you can make, VP of sales is the worst because it's far worse than no hire at all, right?”
Lemkin: A new VP of Sales keeping every existing rep is a major red flag
“If you hired a VP of sales and all, he or she keeps all the reps you have, that's trouble, ok? Because they know that they're not all great. They can't, if you have three or four folks on your team, the bottom person, like, you, you're not a sales manager. The…”
Lemkin: Obsessing over sales pipeline is a sign of failure in early startups
“If you're at a startup, right, for me, pipeline is a sign of failure, right? How much revenue are you going to close this month? I don't need to see the charts, and I don't need to see seven million dollars next to Comcast, or twelve million dollars next to wh…”
Lemkin: EchoSign did not discuss sales pipeline until reaching $10M revenue
“And when Brendan came in, we never discussed pipeline again, at least not for a long time, not till we were at ten million, right?”
Lemkin: Product evangelist sales hires fail by $1.5M revenue 90% of the time
“Sometimes you do need to hire this person because you're burnt out and you need leverage, but this person will be gone by a million and a half in revenue. I can tell you nine times out of 10, the person that, that's totally smart, 160 IQ, loves your product, c…”
Lemkin: Hiring a sales VP two growth stages ahead almost always fails
“But my real point is, if you hire someone that's two stages above where you're at and bring them in, high, high chance of failure, right? You know, I think you can risk doing one stage above. So in other words, if you're doing one million, Right? I think you c…”
Lemkin: Upgrading a sales director to VP works if they have hiring experience
“The other type of risk to take is someone that's more junior than you want, right? It's, you're gonna hire a director of sales masquerading as a VP of sales, right? And there's, the trade-offs there, I think that generally works as long as they've at least hir…”
Lemkin: Selling at target ACV builds necessary skills regardless of product
“If your product today is, say, 300 bucks a month, ok, and that's great, but next, but you're starting to get a few bigger customers, and your goal next year is do 20 K deals, 20 K ACV deals. If this person has sold at 20 K, he or she will have developed the sk…”
Lemkin: Great VPs of Sales always bring former reps with them
“A great VP of sales always has at least a couple of people that worked in their last gig that whatever they do, they want to go with them, right?”
Lemkin: Replace a VP of Sales who fails to boost revenue within one cycle
“Whether you're doing poorly or well, if that person can't come in and increase the revenue in one sales cycle that comes out of them, it is hopeless. Right? There is no excuse, because either they're going to do a better job with what you have or not.”
Lemkin: Open, co-located sales teams outperform distributed ones
“A sales team that sits together in the same room, open style, performs better.”
Lemkin: Early VPs of Sales serve as product team extensions
“If you've worked with a successful VP of sales in the early days, you'll realize that they're an extension of your product team, right?”
Lemkin: SaaS repeatable sales process occurs around $1.5M ARR
“As long as your deal size isn't like a million dollars or more, it's about a million and a half in revenue. Ok, and a million and a half in revenue, You've probably got at least a hundred customers, 50 customers, 80, you've got a statistically significant numb…”
Lemkin: Founders must only hire early sales reps they would personally buy from
“The first two reps have to be people that you would buy from, ok?”
Lemkin: SaaS Startups Should Charge for Professional Services Up to 20% of Revenue
“My learning on professional services is you're an idiot if you don't charge for professional services. You know why? As long as it's 20% or less of your revenue, you get full credit for it, and all the customers will pay it.”