5 Reasons Why Startups Lose Their VP of Sales (And What To Do About It)
Hiring an incredible VP of sales is hard enough.
When they end up walking out the door within 18 months and you have to pick up the pieces, it can spell disaster for a startup.
It can even add insult to injury when the market is competitive or when the market takes a turn. As all founders know, having a well-oiled revenue model to weather the storm is necessary to survive.
Speed is a key factor to startup success. As of 2021, startups are now spending more time than ever searching for and hiring the right people. So, if you miss the mark with a VP of sales hire, it can be like quicksand:
However, before we dig in, it’s important to point out that the best way to avoid losing your VP of sales is to build a great hiring process.
The more preparation you put in before the process begins, the more it will pay off later. Sure, it feels slow upfront, but this intentionality will help you increase your speed when everyone is performing at their best.
Four things to nail before you start the hiring process:
- Understand the work it takes to succeed at your stage.
- Know what good looks like to make a confident hiring decision.
- Measure what matters for your hire, not what everyone else tells you.
- Create a hiring scorecard to remove FOMO and fear.
Fear-based responses in the hiring process are paralyzing and can lead to confusion or missteps. Clarity is king and determines how you achieve alignment. Most importantly, everything starts and stops with our ability to communicate.
Setting realistic expectations early and often is the foundation to hiring well. It also enables you to select from the cream of the sales leadership crop and ultimately set them up for success in the long haul. It’s also what keeps you on the straight and narrow post-hire.
So let’s dig in, shall we?
These are the top 5 reasons startups lose their VP of sales
Over the last seven years, while running Avenue Talent Partners, I’ve collected data from founders and sales leaders to pinpoint what works, what doesn’t, and why talented VPs of sales leave.
1. They don’t have a seat at the table
When execs are operating inside a “black box,” it makes it difficult for others to get things done. Telling your VP of sales that they’ll have a voice, visibility, and access to get them to sign on the dotted line is one thing–doing it is another.
If you’re inclined to work in secrecy, it ends up sending a clear message that you don’t trust them or are unable to let go.
Not only that–you’re creating unnecessary obstacles. If they can’t see the pieces of the puzzle, how on earth will they be able to put it together?
And rest assured, there will be another founder ready and willing to give them what they need. So you may end up making it easier for your sales VP to move on.
What to do about it
When you’re in the interview process, be honest and thorough about the details. Dig into how you work to create trust, and what it takes to keep the seat at the executive table. Also important–share what makes you fearful for your business. Lay everything out together.
Talk about what working together will really be like, being frank about things such as:
- Lessons learned and how you’ve addressed it to get better.
- Who they’ll have access to.
- What you do when things get tough.
- How you formulate goals with the board and their role in that process.
- Team dynamics (the good and the bad).
The more a VP of sales knows coming in, the less likely they are to be disappointed or confused later.
People don’t expect perfection, but they do expect honesty.
2. They don’t have enough budget to get the job done
There’s no way around it. A great VP of sales needs a realistic budget to work their magic. Between hiring, tools, and training, it costs money to build a truly successful team.
A big mistake I see is when founders talk about the funding they have and how they’ll “pay for what matters.” Yet once the VP of sales is in place and it’s time to deliver, the money is nowhere to be found.
Making false promises and not delivering on said support and budget is a surefire way to make them seek greener pastures.
What to do about it
Talk about budget allocation together in the interview process. Break the details down. Be clear and upfront about what they’re walking into and what you’re prepared to spend money on. Provide clarity on your decision-making process when it comes to spending money on new items you didn’t prepare for.
Make sure to keep those conversations going long after they’ve joined your team. Create a plan of action together and be clear on the numbers.
3. No product-market fit
Founders, don’t expect a VP of sales to validate the market for you. In the end, this is your responsibility. You can’t scale what you don’t have.
It’s tempting to delegate this monumental task, especially when sales isn’t your forte or you’re stretched. It’s exciting to think about someone else figuring this out for you.
The best VP of sales can’t do much for a company that doesn’t have its product-market fit figured out beforehand. If you hire without it, you’re throwing good money after a flimsy foundation. It will set everyone up for failure.
What to do about it
You’ll want to have a clear understanding of your ideal customer profile like the back of your hand, as well as the market. The more you know, the better you can understand your customer.
In the end, you’ll be well-positioned to sell your product effectively in the market and hire more purposefully later on.
Iron out your product-market fit before you start the hiring process. As a founder, you should have a clear idea of what it’ll take for your startup to succeed.
Lean into a product-led growth (PLG) strategy. When you hire a strong VP of sales for a product that’s already having success, they’ll have the foundation in place to meaningfully grow the business.
4. The ‘bait and switch’
Founders have to sell their idea to so many people, it’s easy to get caught overselling the task at hand to a candidate. I can’t tell you how many times I have been told, “This is startup life, I just have to sell them on the role and we’ll figure it out together from there.”
It’s unfortunate that many founders don’t recognize this when they’re doing it. There’s a lot of pressure to hire quickly and properly. And a lot of fear in the knowledge that this hire can propel the business forward or set it back.
You have to remember, this is not the way.
When the reality of the situation is oversold, it will come back like a painful boomerang. The truth has an uncanny way of revealing itself.
Alignment is what you’re going for and it’s why people stick around. If you’ve sold them a bad bill of goods, they will leave you.
Case in point. A well-intentioned founder whom I’ve known for years with a flair for storytelling, raised a big funding round with an icky investor and a flimsy product. With that round came a lot of pressure to grow.
When he asked me for advice, I challenged how well he understood his buyer, marketplace, and fit in the market. I also questioned his ability to hire well or realize success without this foundation in place first.
There were crickets. He ghosted me for almost two years.
He went ahead during those two years, overselling “the dream” to the people he hired, his investors, and the board.
When we finally caught back up, he was on his fourth sales leader and fired his entire sales, marketing, and CS team. He was operating in the red, burned through his cash, and was desperately looking for more funding.
When I asked him how much he thought this cost him, he said he was being conservative when he shared it was more than $22M.
Fast forward to today. He’s still burning through cash with a lack of confidence in his team or Go-To-Market strategy. He is scared, he’s unable to raise more funding, and he’s trying to launch a PLG strategy while addressing his 64% customer retention problem to get through this choppy market.
If you don’t have confidence as a founder, why would your VP of sales?
If they’re as good as you think they are, regardless of market conditions, they will always have other options.
What to do about it
It’s easy. Be honest.
Interviews are NOT a place to sell candidates on the role. Interviews are meant for both parties to discuss the role and if it makes sense to work together.
5. Hiring someone over them
Hiring another leader on top of a VP of sales sends a clear message that you’ve lost faith in their abilities, or you don’t trust them to get the job done.
If you hire someone to lead your VP of sales after they’ve been in the role for 12-18 months, it’s too soon. It’s especially so in enterprise sales where it takes at least a year to get the party started.
- Have you done all that you can to support them?
- Are they done growing?
- Do they still have the will and skill?
- Is it really the right time to bring someone on above them or are you getting caught up in bad advice?
Many founders make big, unrealistic promises in the hiring process by saying, “One day you’ll be our CRO.” I get it, you’re afraid of losing “the one.” However, if you do this, you’re going to lose them anyway. It will just cost you a lot more.
What to do about it
There’s nothing wrong with saying, “We’re a fast-moving business and we don’t have a crystal ball. While you want to continue to grow and I am committed to that, I will never make you a promise I can’t keep.”
Iron out what needs to happen in order to succeed:
- Create realistic milestones.
- Establish a regular communication cadence to stay ahead of the details together.
- Give them the benefit of the doubt and try to understand them first.
- Invest in their training and development to give them a fair shot
- Design a plan together.
If there is a time when the issue becomes far too unwieldy, talk with your VP to figure out the help you need. You can work together to figure out who to hire, without the ick.
Don’t lose your VP of sales, win them over
A terrific sales VP can be the mission-critical hire that catapults your startup forward.
When you hit turbulent times, you should be able to have the right conversation with them that focuses on coming together to work hard amidst the difficulty.
The pitfalls mentioned above are all within your control. By keeping these reasons in mind, you can avoid mistakes and in fact, bring on the best VP of sales for your organization.