When do we hire a VP of Sales?

As a startup, you need to do everything yourself at the beginning. Once you get to the point that you understand enough about selling, and are too stretched to do it well yourself, then that's the time to hire a specialist.

If you hire too early, you'll hire for the wrong role (you won't understand the sort of sales person you need - there are many different types), you'll hire the wrong person (sales people are tremendously hard to hire - they're very good at selling themselves) and they'll do the wrong stuff (since you won't know what's really important yet). Been there, done that.

Check out Steve Blank's excellent blog (http://steveblank.com/) for a great analysis of this issue.

The short answer is - after you have sales. You need to build a product that customers actually want and are willing to pay for first. The VP of Sales can make sure you get more, but can't help you if the product isn't compelling.

I made that mistake with my previous start-up. We brought the VP of Sales along with the product launch. It turned out that the product wasn't something that our target market was willing to pay the price that we expected for. Sales can't fix that - that's marketing + product management + engineering's job. So at that point we were burning cash on sales, but didn't get any good results.

In my current start-up I've found that we founders can do the sales job initially - this time the product's right, so we find it easy to bring customers on even though we're not sales pros. We'll bring in a VP of Sales when the product offering is complete and the business model is truly established, and what remains to be done is to scale fast.

Not for a long long time.

Most entrepreneurs I know -- including myself -- hired sales people far earlier than necessary, resulting in a suck on money and a lack of direction.

You are the best salesperson at the company. While the company is small (under 10 people), everyone needs to be adept at sales -- making customers happy and talking on the phone and by email about the product.

Once "sales" becomes a function that requires full-time effort just to track the status of the open deals, then consider sales.

A VP of Sales is going to need a number of tools to motivate the salesforce.

You should have the following in place before you hire this person:

• Website
• Press Kit on the website
• Customer Relationship Managment Software (CRM)
• A thorough Competitive Analysis of the competition (trackbacks, fill out your CRM)
• A very thorough plan outlining goals, what you expect from them, scripts, rules

The person you hire can help refine your business goals and strategies, but if you depend on this person to completely drive the entire effort with none of the above-mentioned guidance and support, you may not have the desired business outcomes.

I believe a lot depends on the nature of your organization.

At Inedo Media, a business focused almost entirely on sales and sales-related services, we couldn't bring on a VP of Sales soon enough. The moment we did, it made all the difference in the world. Not only was he able to bring our sales training in-house (he was also experienced in sales training), but he brought in the tools and discipline that an experienced sales staff with no experienced sales leader simply would not have.

Hire your VP of sales once you have a sales forecast you can bank on. Meaning, hire a bag carrying peddler at first, who has relationships with your target market in one region. Incentivize him to tee up pilots, beta partners and ultimately sales, and once he's proven traction, only then bring on your VP of sales. Lots of times bringing on the VP of sales coincides with a funding round too, i.e. you're telling the story of how you're going to get big over a certain timeframe and with this funding you can bring on a stellar VP of Sales. Oh, and bring this hire on AFTER product marketing but BEFORE corporate marketing is hired in.

I think most startups make the mistake of hiring a VP sales way too early. VP Sales are primarily responsible for the operations of the sales process (scaling, compensation, forecasting, call scripts, salesforce.com setup, etc.). Often times, the best VP Sales are not the best salespeople...if they were, they would focus on making money rather than building a "department".

My opinion is that you should hire at least 1-2 "eagle" salespeople to sell first. These are the people who don't need process...they just get it done. After they are successful, hire a VP to build a lean process out of what they do so they can scale the team.