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How to Build a World-Class SaaS Sales Team

On Thursday, June 25, Jason Lemkin, Managing Director at Storm Ventures, and Aaron Ross, author of Predictable Revenue, joined our CEO BJ Lackland for a live Q&A about start-up growth, sales, and funding.

We’ve taken their 45 minute discussion and pulled some questions and answers you might find useful if you’re scaling your sales team. Enjoy!

Q: In a predictable revenue-based SaaS company, what are some fundamental practices that are crucial to success for a sales rep?

Aaron:  One thing I’ve found to be incredibly helpful to make anyone successful who’s selling, whether you’re a CEO or a sales person, is having been in lots of sales cycles where you’ve seen what works well and what doesn’t.

With this experience, you develop the expertise to offer potential customers what is truly useful to them. You build up the confidence to know when you’re talking to a great prospect who is hesitating—and then say, “You need to buy for these reasons.” And then you can help them use your product in the right way.

You also develop the confidence to say, “You know what, you probably shouldn’t do this with us. You might need to look at a competitor or not do this at all.”

Expertise and confidence help take away some of the nervousness, anxiety, and fear of rejection that even a lot of people in sales have.

Q: What’s the typical evolution of a sales rep’s career path? How do you get to the next level?

Jason: There are really two career paths for sales professionals. You can be an individual contributor (IC) forever. Then the typical career path is to go more enterprise, learn how to sell bigger deals, and once you start selling million dollar deals, you can start taking home million dollar commission checks. The other path is to eventually become a VP of Sales.

So for the aggressive sales rep who wants to get to the next level, the first thing you need to decide is if you want to be on the IC track or the manager track. Look inside yourself and figure that out, because VP of Sales sounds glamorous, but it’s a very different job than an IC.

The greatest rep can make more for a long time than a VP of Sales, but the VP of Sales can get one percent of the income. So what’s your play?

One of the big mistakes I see hot but green startups make is hiring the best sales rep to be a VP of Sales, but that sales rep has never actually been a manager, never hired or led any reps.

If you’re that sales rep, you will fail 95 times out of 100, because the number one job for a VP of Sales is recruiting a team. If you’ve never recruited anybody, you will fail quickly, at least in a high growth environment. If you’re in a slow growth environment, you may be able to stub your toe, but if you go to somewhere hot, you will die.

If you’re on the management track, don’t make the jump to VP until you’re ready. You’ve got to be at least a team manager or a director—and you’ve got to report to a great manager. The greatest VPs of Sales in SaaS have all reported to someone great for at least a year and built small team under them before they went on to the next best thing.

BJ: I agree. Recruiting is such a different skill and building a sales team is such a different skill than actually selling. You’re selling when you’re trying to recruit somebody, obviously. But it’s a totally different process.

Jason: So many great sales reps could kill the top 10 percent, but they skip the steps, and six months later, they’re out of a VP of Sales job. It isn’t worth it. I think it takes you about five to six years to become a real VP of Sales for a fast-growing SaaS company, best case.

You’ve got to have hired three reps. You’ve got to close loads of deals. You’ve got to know what the difference between outbound and inbound is—and you need to have done both.

There’s only so many hours in the air you can skip to be a pilot.

Q: What are some of the biggest mistakes companies make in hiring a VP of Sales?

Jason: Making your best sales person your VP of Sales is a classic mistake. It usually doesn’t work out, but it’s not fatal. I think the number one mistake is excessive “logo affinity”.

A CEO decides they want to hire someone from Box or Dropbox or Salesforce, or pick your company. Then they let everything else kind of slide. The person hasn’t really recruited a great team, didn’t really blow out his numbers, and doesn’t actually understand how the company sells. Overrating logo affinity is especially true for first time founders, but I see it again and again from all sorts of companies.