I run a recruiting firm called 121 Silicon Valley, and we are always asking ourselves “What does a VP of Sales look for in a Startup?” So I sat down with Steve Sovik, Chief Revenue Officer at Tipalti, a fast growing provider of software to automate supplier payments. Before joining Tipalti, Steve spent five years as SVP of Sales at Coupa Software, where he led sales growth from essentially nothing to over $80+ million. Randy Bolten*, former CFO at Broadvision joined the conversation.
*Randy Bolten, author of Painting with Numbers, contributes regularly to 121SV.com
Bob – Steve, let’s start at the 30,000-foot level. What are some of the key things that make a startup an attractive opportunity for a VP of Sales candidate like yourself?
Steve – From 30k feet, here are some of the qualifying questions that I look to answer:
1. Have their customers been successful with the company’s products? Do they have high retention rates?
2. Does the company solve a specific business problem with unique points of differentiation (that are measurable)?
3. Does the CEO and members of the executive management team have experience in growing start-ups? Do they communicate well and work well together?
4. What is the market potential for the goods and/or services the company provides? What are the barriers to entering this market?
5. Is there a healthy company culture? Do the needs of the sales organization fit the skill set that I know I can bring to the table?
These are the qualifying criteria that have worked for me. Everyone is different so I always encourage others that are beginning their search to get clear on what they want. I know that it sounds like a cliché, but gaining clarity on what you want is critical before doing your search. CEOs (like sales people) can be persuasive. You want to make a principled decision, not one exclusively based on the selling skills of the CEO. Being clear on what you want, and having the discipline to stick to it, will prevent you from being swayed by a company that is lacking in areas that are core to you.
Bob – OK, let’s start with #1… “happy and successful customers” – how do you find out about that?
Steve – Many years ago, I did a stint with a small startup. During the interview process, I noticed banners and logos of all their customers hanging on the walls throughout the office. It really gave me the impression that they held their customers in high esteem and that customer success was #1. It wasn’t until I actually started working there that I learned that some of the sales people jokingly referred to that display as the “graveyard” (meaning that most of the logos on the wall were no longer customers). It was a sickening feeling that I made a huge mistake (and on some levels, I did), but anchored a powerful lesson that I never forgot.
In today’s social media world, reputation is everything. There is so much information out there about a company, their products, and the value (or lack thereof) that they are creating in the market. You can be the greatest leader in the world, but if the reputation is poor, and the company is not committed to turning it around, you will have an uphill climb. Anyone that doesn't have customer success at the core of what they do is a dinosaur, and one that you should avoid. Since that poor startup experience many years ago, every startup company that I selected since then had 99%+ retention rates. It makes it easier to build momentum all the way across the board, when your customers love you because you made their lives better.
Bob – Your #2 key criterion is about solving a business problem. What does that mean to you?
Steve – Sure, there are a lot of products out there that are “nice to haves”. Either they are in crowed markets with very narrow points of differentiation, or their value propositions are light in that it is not mission critical or hard to measure in terms of financial impact. All decisions become financial in the end and in uncertain economic times, you want to be selling a solution that solves a specific business problem, is mission critical, and has quantifiable value. I look for clarity from a potential employer around these points. Without this, selling can be a challenge, and if the economy takes a dive, it can be a real challenge.
Bob – Key criterion #3 is about CEO and exec team leadership. Leadership comes in many forms, so please elaborate.
Steve – It is nice to work for a CEO that has a proven track record of success. However, if the CEO is not proven, then the question is, do they surround themselves with smart people that work well together?
I also look to evaluate what the CEO knows about sales and what their expectations are. What is his/her vision for the company and how does sales drive that vision over the next 2-3 years? If you are not the first VP of Sales, then understanding what went wrong with the previous guy or gal (more often than not it has to do with poor hires and/or missing the number).
Many times, CEOs want to grow a company to a certain revenue amount, but don’t consider the organizations ability to hire, ramp, and train in a realistic timeframe. Given an infinite amount of time, we can all be successful, however we are all bound by time. What I have found is that CEOs will pick a number, because that fits into the story that they want to tell, but underestimate the investments and the timeline necessary in sales to drive that number. Coming to an understanding around growth expectations and support needed from the CEO to drive the number is key.
CEOs that have track records of success generally understand what it takes to build and grow a company.
Randy – As long as we’re on the subject of a CEO’s qualifications, is it important to have a CEO who has sold before?
Steve – The CEO has to have some sales skills (you don’t get to that level by not having some skills in the sales department) – either selling a client, an organization on a vision, or the company to prospective investors. It is not critical that the CEO have actually sat in the sales leader seat, however it is important that they have a balanced perspective as to what it takes to build and grow a sales organization, and that they budget and are willing to invest accordingly. The worst is when you are given a tall hill to climb and not the resources to climb it. This is why productivity metrics are key (but that is another topic). Leadership comes in many forms. Since the CEO is likely someone that you will be working very closely with, you will want to make sure that there is a connection between the two of you.
Bob – Let’s move on to criterion #4… market potential. Does a startup’s market have to be huge for it to be of any interest to you?
Steve – Bottom line is that you have to love what you sell. If you believe in what you do and love what you sell, you sell from the heart. And that is so much easier than having to paint a phony face (besides, people can see through the phony face). There has to be a large enough pool to fish in but the pool does not have to be huge. It is more about winning and momentum. What is interesting to me is selling a product that I love in a market where I feel that I can win. If I believe this in my core, I will attract and retain an organization that will believe the same.
Bob – Your last key criterion -- #5 – is company culture. What are you looking for there?
Steve – In today’s social media world, prospective employees have unprecedented access to the inter-workings of an organization. Transparency is the new normal. Having the support of the CEO and management team to developing and maintaining a positive company culture is critical to attracting and retaining talent in a highly competitive market.
I have been blessed to work with some great leaders over the years. I have taken the best from the best and incorporated it into my own style to form my own brand of leadership. When looking for a start-up, you have to ask, what impact will your brand of leadership have on the organization? Do you know what your brand of leadership is all about and how it will fit into the culture of an organization? Is your brand of leadership going to blend well with the leadership style of others on the executive management team? Much like I encourage people to know what they want, I equally encourage to know themselves and their brand of leadership.
In a start-up environment, you often have the opportunity to create the sales culture from scratch, which is a lot of fun. Creating the culture and environment where others can grow and thrive is one of the more rewarding bi-products of sales leadership.
Bob – Many thanks for these guidelines, Steve. One last question: Are you looking for perfection? What if it’s clear to you that some things really need fixing?
Steve – I don’t really look for (nor do I expect) perfection. Start-ups are messy, that is part of the deal and part of the fun ;-) What I do have is high standards, and what I enjoy is moving an organizations towards the ideal state. I fully expect that things need to be fixed. Growing organizations are constantly evolving and expanding, so the need to adapt to change is ever present. I would be very suspicious of a start-up that was perfect and had everything figured out.
What I do expect is that the CEO will likely have 1-3 major things that he/she thinks is broken with sales. You want to make sure that fixing these are in your wheel house and that you fix them first if/when you come on board. It is good to spend extra time with the CEO and pivot around these 1-3 things to get a complete perspective as well as an agreement on your recommended approach. This way you come in with a strong mandate, strong support, and will make a big impact in your first couple of months on the job.
If you’re a startup CEO, keep in mind these five items as you contemplate the process of attracting exec candidates to your team. Every great candidate is going to focus on the same five questions that Steve illustrates here. If we can help you, let us know.
About the Author
Bob Berry is Managing Partner and Founder of 121 Silicon Valley, an exec recruiting firm in Silicon Valley. Prior to 121, Bob was Vice President of Worldwide Sales and Services for AlterPoint in Austin, where he managed field operations both in North America and Europe; Founder and CEO of Ponte, a Greylock portfolio company and an early leader in Enterprise Security Management; and Vice President of World Wide Sales at Inverse Networks, building sales from pre-revenue to $20 million. Bob previously served as Vice President for Oracle's Telecom Service Providers business unit, following sales executive positions at Pyramid Technology and Tandem Computers.