Don’t Ever Make Anyone “Head of Sales/Marketing/Engineering/Whatever” in SaaS

Screen Shot 2014-02-22 at 9.31.42 PMA few months ago, I gave a great SaaS Founder CEO a Gift.

A real gift.

This founder CEO was at about $1m in ARR, doing well, but with only a smidge of angel funding and limited resources.

And I gave him an insanely great VP of Sales candidate.  An amazing fit for his company, his target ACV, his lead velocity and structure.

And let’s be clear:  the CEO was incredibly lucky to get this candidate.  Not because the company wasn’t a great, cool company.  But because the company wasn’t really big enough, funded enough, with enough going on to really attract a candidate of his caliber (at that time).

But like any candidate, this VP of Sales wasn’t perfect.  He was an up-and-coming candidate, and had  the full package, but it was his first time to really own it all.

The CEO saw it … almost.  He hemmed, and hawed.  And ultimately, he let the gift go.  He said he’d hire him … with a great package … but only as “Head of Sales”.  Not VP.

Fast forward 60 days.  And this VP Sales candidate met with another CEO I know well.  A really kick-arse CEO.  One whose start-up was growing even faster than the first, with much more funding, a bigger base, and much more velocity.  Objectively speaking, a better opportunity.  And the Second CEO hired this VP of Sales on the spot.  That Day.  As the VP.  And they’re just killing it together.

____________________

Fast forward another few days, and I saw the first CEO at drinks.  I asked him what happened.  He said it was just too much, to make the VP hire at that time.  He agreed it was a Gift, getting connected to this candidate.  But at the time, he just wasn’t 100% sure the candidate would be the right VP of Sales at $10m ARR or $20m ARR, let alone $100m ARR.  He didn’t want to have to make a change later.  He wanted to leave titular room instead, to top him later if necessary.  Make him “Head of Sales”.

I nodded.  I get it.

And it was a huge, epic mistake.

_____________________

In B2C, it may make sense to have a lot of “Heads of This” and “Heads of That”.  If you have matrix-type teams, and a lot of individual contributors who are hyper productive.

Screen Shot 2014-02-22 at 10.00.22 PM

But in SaaS, I say it’s a mistake.  Or at least rethink it, for the following reasons:

  • People get topped anyway in SaaS.  Sorry.  But it’s true.  Not everyone scales from $0-$100m.  It’s just a fact.  As we know, Great Teams Win.  But the players on the team do change as the years go by.
  • “Head of” is confusing to outsiders.  This doesn’t matter at WhatsApp.   But in SaaS, you are dealing with a lot of corporate types.  Fortune 500 customers, partners, etc.  They want to know: Who am I meeting with?  What level of responsibility does he or she really have?  Is this company for real, or just some little start-up that might go out of business in a year or a month?
  • It’s demotivating, after a point.  Bringing in someone as “Head of Biz Dev” and then promoting them in 120 days when they prove themselves may, I guess, be motivating.   Maybe.  But leaving someone who is putting their heart and soul into a owning a functional area, without the clear indicator that that’s really what their job is … for too long … is a recipe for underperformance, ultimately.

I know all this squishy stuff may feel like the right way to go in the early days.  Especially if you care, and want to make sure all your great team members have career advancement opportunities.

But let me step back one level, and tell you one more personal story here.  That I learned.  At EchoSign, we basically had the same management team at $2m ARR as $20m-$30m in ARR.  I wasn’t sure they could all scale.   I wasn’t even sure I could scale.  The skills we needed at $2m in ARR were just so different from $20m in ARR.

What I did learn is the great ones, more times than not, find a way to scale to the next level.   So be thoughtful.  But if you’ve got a Gift on your hands, a really game-changing great hire … I say just give ‘em the title.  Even if it’s a slight stretch.   Dude, Just Get it Done.

They may exceed your expectations.  My team did.  And if they don’t … the great ones will know.  And will be OK being topped.

After all, that’s what they invented Senior Vice Presidents for.

4 comments

  1. Agree with you there Jason. There is much less harm in hiring over the VP’s head when you realize they simply won’t scale, than in dithering about their title, giving them a squishy meaningless title that screams “they don’t believe in me so I’m proving myself here, I’m proving my little heart out”.

  2. I’d summarize the entire blog post in one sentence that you wrote: “Dude, Just Get it Done.”

  3. Jason. I normally agree with a lot of your advice, but I disagree with this (caveat being if no other people at the company had vp titles either).

    I feel holding off giving lofty titles at a small startup stage is important.

    It just makes me laugh when I look at sole Startups with 7 employees and 5 C level people.

    At our startup at $1mm run rate stage we had no VPs or elevated titles. If someone didn’t join at that stage due to title, they’d probably be the wrong person. We’d contrast this to a competitor who had like:
    Vp product, svp product, CPO

    They just came off super corporate in comparison. It meant people at our startup earned respect amongst their peers through their actions, not just an elevated title.

  4. For sure, in the earliest days, before you have a true management team that is managing people … titles may not matter. E.g., $1m ARR or so as you state. But as soon as you have real managers, and are dealing with customers and third parties, I think it’s time to retire the Heads of XXX. At least in B2B.

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