So how can this big salary not just be a big drain on limited capital? ), Before we get there, as a reminder, I strongly recommend you hire 1-2 sales reps (ideally 2) before you hire a VP Sales at a minimum. And this is really, really painful. In fact, hopefully they are kind of obvious. Either way, not a great VP Sales. And perhaps most importantly, as a founder / CEO — I knew exactly what I was paying for sales. 25% or more upside for exceeding that plan. My uber-learnings from that are that BigCo sales comps plans are great tools — once you are reasonably post-Scale. Your VP Sales cannot rescue you from “Great Product. In a start-up, the VP Sales has to also be aligned to costs, not just revenue. E info@saastrinc.com To hit their number, they know they need the heads. Your VP Sales cannot rescue you from having no organic demand for your product. And it’s great when they even take a quota at first, to do it themselves. Up until you make this hire … you the founder have likely been the acting VP Sales yourself, hopefully with 1-2 reps to help you (ideally two). Last week I attended the annual SaaStr conference and learned about the most exciting software companies in the world. We can talk more about field sales later. What’s going to be key in our space about winning vs. competitors? Sales needs you to make a product they can sell. Many candidates will tell you they want a guaranteed draw for 6+ months. But what they will do, is they will create a dialogue. How do we shore up our base? But the thing is, if you pay your VP Sales in full on hitting the plan, it shouldn’t matter if that gratification is delayed a few months, so long as the real OTE is high. None of them are particularly insightful or profound in isolation. And since our Real VP Sales killed it, he made good money, was highly accretive, and we got to cash-flow positive at $4m in ARR even paying our VP Sales well and paying our sales reps 25% of the deal size. . That % has to go down over time, but the basic idea was if the Stretch Plan was hit (Stretch for us = plan that I had a 25% confidence in hitting), then there would be a 25% boost on top of the OTE. These questions aren’t magic. And 400-500 deals a year. The Process for Creating a Sales Compensation Plan. Here's what I heard. But incentives are critical, and the VP Sales will likely be the Seemingly Most Expensive hire you ever make. We’ve seen a lot of different sales compesation plans during the implementation of Spiff at our clients. They exist to teach reps how to do it. Compare pay for popular roles and read about the team’s work-life balance. And the great VP of Sales all know this. Then, as we first scaled up a sales team, we ended up literally copying Salesforce’s comp plan. Get from $0 to $100 Million in ARRwith less stress and more success. This will ferret out if they know how to compete — or not. Don’t make your VP worry her quarterly bonus might not come, or be subject to vagaries. I sold $6m our first year (man, that sounds good looking back on it). At first, I just made up a plan. And sales quickly, elegantly … became a profit center. Have him/her explain to you what will happen. Create a real machine to monetize the prospects and leads that find their way to you. From them, you’ll be able to determine: (x) if this candidate is for real, or not, (y) if this candidate can really be a true VP, a leader, a manager — or not — and take you to the next level — or not, and (z) if the candidate is a good fit for your company and space in particular. That was epic. 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