Scale and StartUp Stories S1 E8

When to hire your first VP of sales?

28 Jul 2020

It’s amazing how just this one question can make or break a company. What makes it even more frustrating is that there’s already too much noise and clutter of answers on this question. From founders, investors, to startup mentors, media and so on, almost everyone has their perfect answer to this question.

And still, many founders hire VP sales too early, or too late. A rare few, Google for instance, get it right. Many others including GitHub, which got acquired by Microsoft eventually, didn’t get it right.

So how to separate noise from signals that matter?

Enter Elad Gil, a serial entrepreneur and the author of “High Growth Handbook”, a book that combines practical insights from practitioners with some of the most visionary playbooks around the world. Over the years, Elad has been an entrepreneur, investor and advisor to companies such as Airbnb, Coinbase, Checkr, Gusto, Instacart, Pinterest, Square, Stripe,  and many others.

In this podcast, the first in a series of deep conversations with him on organisational building blocks, Elad offers practical insights into some of the most common mistakes founders make.

When to hire your first vice president of sales, is among just one such existential questions.

“Some companies hire a vice president of sales too early because they see that the market exists already. In other circumstances when there is uncertainty, you start doing founder-driven sales,” Elad says. “Many founders today, particularly product and technical founders, end up adding sales and a VP sales much too late in the life of a company.”

“What you’re increasingly seeing is that people are getting “pre product market fit” advice to “post product market fit” their companies. If you go back 5 or 10 years, it was the opposite–people were given very bad advice. There was post product market fit advice to a company that just didn’t have any traction yet,” he adds.

As you will discover after listening to this conversation with Elad, there’s so much to learn from the playbooks of Google, Stripe, Github and others. Elad also warns against learning from the playbooks without understanding the contextual setting for each of them. One size doesn’t fit all, indeed.

So why do companies fail?

“The number one reason companies fail is because of the “co-founder complex.”There’s always this advice that you need an equal co-founder. I think people need to divorce equality in terms of equity, from equality in terms of decision making,” Elad tells me in this podcast.

“For late stage companies, the common mistakes are very different. Not building an executive team early enough, is the first such mistake. That’s why when you see second time founders start a company, among the first 15 people 3-4 of them are VPs and CXOs.”

About the host

Pankaj Mishra

Founder , FactorDaily

This episode’s guest

Elad Gil

Serial Entrepreneur , Author of “High Growth Handbook”