Lots of lawyer friends ask me about getting into (Legal)Tech– and what the career trajectory looks like. I’m currently a VP of Sales (CRO) for a tech company in the Bay Area.
Here’s one path…
Behind every great SaaS success story, there’s a great VP of Sales. From Jim Herbold (formely Box) to Sam Blond (Zenefits), we read daily about the SaaS sales leaders that are driving astronomical revenue growth for their companies. But before you can become the sales leader of a Lemkin worthy SaaS unicorn (er, decacorn), you need to first make the jump from wherever you are now to your first SaaS VP of Sales position.
And lets be honest. It’s going to be a jump.
There’s no lock-step path to VP Sales glory. It’s all too new (for now). Sure, if you’re at Oracle or SFDC there is probably a great VP career track (that just wasn’t my path). But out here in the rough streets of Silicon Valley, getting a real shot at being a VP of Sales for an up and coming SaaS start-up takes more than just strong tech sales/management experience (but you need that in spades, of course).
So the big question is how do you become a first-time SaaS VP of Sales?
In my experience, there are two components to getting there (Spoiler: this isn’t 7-minute abs. This sh*t is hard!).
Here you go…
#1 Know how to identify a great opportunity before everyone else does.
#2 Understand SaaS sales metrics (the ones that matter) better than the CEO.
Let’s dive into these:
#1: Know how to identify a great opportunity before everyone else does:
Now that sh*t doesn’t just sound hard, it sounds next to impossible without your uncle @pmarca feeding it to you. But it’s actually not that hard, if you know what you’re looking for. More importantly though, this may be your one shot at getting there — so let’s map it out.
You can determine if a below the radar SaaS company could rocket under your leadership with strong answers to the following questions:
a. Do they have an ARR between $1mm and $5mm?: Below that you’re taking a risk on Product Market Fit, and above that, someone smart is going to tell them to hire a proven VP of Sales, not a punk kid like you.
b. Average ACV >$3,000 and <$10,000?: Below $3,000 can be just fine (see this ACV list on Quora), but if they are already mildy killing it, then they probably should hire a director of marketing from Slack into a CMO role, and not you. Above $10,000, you’re going to be too late to the party. If they are already doing >$1mm at a $10K ACV, someone more experienced than you has already found them.
c. <30% Churn?: Here’s the deal. VC’s are going to say above 20% makes them nervous, and below 10% is on the right track. Fortunately, you’re not a VC, but you do need to arrive before they do, which means taking a gamble on a higher churn rate. Anything under 30% means that the company is on to something. With time, the product can get stickier and the CS teams can get better — and that churn number will go down. >30% and you’re taking a risk that Product Market Fit isn’t there yet. That may be a risk you’re willing to take if other factors are inline, but if buyers are dropping off too regularly, how meaningful of a solution could this company have really built?
d. Product Market Fit: While others may disagree, my determination of product market fit is 100% contingent upon strong answers to the questions (a) (b) and (c) above. There can be Product Market Fit below $1mm ARR, and before (b) and (c) have arrived, but I’m not smart enough to see it.
e. Profitable: If they are profitable (even if just barely), and meet the revenue criteria in (a) and (b) above, that probably means that they’ve never had to take (much) cash — and have (mostly) bootstrapped. This is a great sign. If they are looking for a VP of Sales, it’s probably reluctantly-so because they know it’s going to be expensive and they’ve gotten this far without you. It also means you’re going to have your work cut out for you once you land the job. But trust me, these guys need you the most.
f. Strong Product Team: If they’ve never really had a VP of Sales (just that one VP of Biz Dev who was good at “opening doors”), that can be good news for you (not as good as if they’ve hired two who’ve failed). What’s not good news is if they don’t have a kick-ass product team. You can do lot’s of great things as a VP of Sales — but building a great product AND figuring out how to sell it, ain’t one of them (that’s called being a CEO — don’t do it!).
How you can determine if the product team is great is pretty simple. Double check the metrics from (a) (b) and (c), then demo the product (looking closely at the UX and implementation process). If it looks great, functions intuitively, and the person/team who built it looks like they haven’t slept in 2 months, you’ve got something.
g. At least one sales rep who is killing it: This should be your favorite person in the entire world. This is the guy who despite an imperfect product, despite the implementation SNAFUs, the messed up pricing, the delayed invoicing, and zero marketing support, has found a way to crush sales. What this means is that with an improved everything else, some recruiting, some training, and a revamped sales process, you might just flip the revenue switch over night (I mean, like 90 days).
Bonus: Two things that shouldn’t distract you:
When evaluating a SaaS opportunity based on the criteria above, there are two common distractions that can lead you off course:
- No leads.
- Crappy website.
Whatever you do, don’t run away based on these two criteria. These are SaaS red herrings that are going to send your VP of Sales competition running for the hills — which is exactly where you want them to be.
At my current company, LawRoom, they nailed (a)-(g) on my checklist, but the website was (and still is) eh, not very good. It turns away prospects and candidates every day (our new website is launching in June) — but it’s such a temporary problem compared to, say, Product Market Fit, that it’s critical that you don’t get distracted by it.
This is actually what the site looks like now (my mom was NOT impressed):
#2 Understand SaaS metrics better than the CEO.
Once you’ve identified a target based on the criteria above, your goal now is to demonstrate to the CEO that you’re the right person for the job. And in this new frontier of SaaS, it’s unlikely that your resume is going to do the trick (you would have stopped reading paragraphs ago, if that were true).
So you really have two goals: (1) master SaaS metrics, and (2) figure out how to show it.
Remember when I said this sh*t was going to be hard. This is the hard part, and where most of you will drop off.
To master SaaS sales metrics, you just need to read every damn blog post ever written about SaaS — twice.
Here’s your first semester reading list:
SaaStr | The Best of SaaStr: Our Top 100 Posts, Organized by Topic (Sales, Marketing, Customer…
It’s time. We’ve put together the Top 100 SaaStr posts, organized by topic and stage of your SaaS startup (and…www.saastr.com
While your future CEO is busy juggling a million things to stay above water — you’re about to ask to be the highest paid employee in the company. You better have a freakin’ plan. The solution that your future CEO is looking for is a VP of Sales with a playbook. Fortunately for you, the playbook is out there. You just need to master it.
Now, and lastly, for the fun part. You have to take this abundance of SaaS knowledge, and you have to make the sales pitch of your life to your future CEO with it. Your future CEO who has probably never hired a true VP of Sales before. Your future CEO who may not know how to comp you, how to measure your productivity, what goals are realistic for you in the first 90/180 days. Your future CEO who may think carrying a bag is the best approach (“just to make sure you can pay for yourself”) because he/she can’t fathom how you’re about to drive revenue quickly and meaningfully.
And that pitch has to be compelling. It has to show an almost scholarly understanding of his/her problems at $Xmm in ARR, and an almost prophetic vision of how to grow 2X, 3X, 4x in revenue.
If you’re familiar with The Challenger Sale — this is commercial teaching 101 (chapters 4–6 for the super serious out there), and the blueprint for how you should present your SaaS playbook to your future CEO.
That’s it. The 1, 2 punch.
If this was helpful, confusing, contradictory or complete nonsense, leave a comment and let’s talk about it.
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