I had coffee with an ex student earlier in the week that reminded me yet again why startups burn through so many early VP’s. And after 30 years of Venture investing we still have a hard time articulating why.
Here’s one possible explanation – Job titles in a startup mean something different than titles in a large company.
You Can’t Always Get What You Want
I hadn’t seen Rajiv in the two years since he started his second company. He had raised a seed round and then a Series A from a name brand Venture firm. I was glad to see him but it was clear over coffee that he was struggling with his first hiring failure. “I’ve been running our company, cycling through Customer Discovery and Validation and the board suggested that I was running out of bandwidth and needed some help in closing our initial orders. They suggested I get a VP of Sales to help.”
It was deja vu all over again. I knew where this conversation was going. “Let me guess, your VC’s helped you find a recruiter?”
“Yeah, and they were great. They helped me hire the best VP of Sales I could find. The recruiter verified all the references and he completely checked out. He was in the top 1% club at (insert the name of your favorite large company here.) He’s been in sales for almost 15 years.”
I listened as he told me the rest of the story. “I thought our new Sales VP would be out in front helping us lead Customer Validation and help us find the Pivot. That was the plan. We had talked about it in the interview and he said he understood and agreed that’s what he would do. Even when we went out to dinner before we hired him he said, he said he read the Four Steps and couldn’t wait to try this Customer Development stuff.”
“So what happened,” I asked, though I was betting I could finish the conversation for him (since I had made the same mistake.) “Well, he’s completely lost at the job. When we ask him to call on a different group of customers all he wants to do is call on the people already in his rolodex. When a customer throws us out he wants to get on to the next sales call and I want to talk about why we failed. He says great sales people don’t do that, they just keep selling. Every time we iterate even a small part of our business model or product he gets upset. When we change the company presentation it takes him days to get up to speed to the smallest change. He’s finally told us we got to stop changing everything or else he can’t sell. He was supposed to be a great VP of Sales. I’m probably going to fire him and start a search for another one, but what do I do wrong?”
“Nothing,” I said, “You got what you asked for. But you didn’t get what you need. The problem isn’t his, it’s yours. You didn’t need a VP of Sales, you needed something very different.
Companies Have Titles to Execute a Known Business Model
I offered that in an existing company job titles reflect the way tasks are organized to execute a known business model. For example, the role of “Sales” in an existing company means that:
- there’s a sales team executing
- a repeatable and scalable business model
- selling a known product to
- a well-understood group of customers
- using a standard corporate presentation
- with an existing price-list and
- standard terms, conditions and contract
Therefore the job title “Sales” in an existing company is all about execution around a series of “knowns.”
We Use the Same Title For Two Very Different Jobs
I asked Rajiv to go through this checklist. Did he have a repeatable and scalable business model? “No.” Did he have a well understood group of customers? “No.” Did he have a standard corporate presentation? “No.” etc. Did he and his recruiter say any of this when they put together the job spec or interviewed candidates? “No.”
Then why was he surprised the executive he hired wasn’t a fit.
Startups Need Different Titles to Search For an Unknown Business Model
In a startup you need executives whose skills are 180 degrees different from what defines success in an existing company. A startup wants execs comfortable in chaos and change – with presentations changing daily, with the product changing daily, talking and with analyzing failure rather than high-fiving a success. In short you are looking for the rare breed:
- comfortable with learning and discovery
- trying to search for a repeatable and scalable business model
- agile enough to deal with daily change, operating “without a map”
- with the self-confidence to celebrate failure when it leads to iteration and Pivots
That means the function called Sales used in a large company (and the title that goes with it, “VP of Sales”) don’t make sense in a startup searching for a business model. Sales implies “execution,” but that mindset impedes (majorly screws-up) progress in searching for a business model. Therefore we need a different job function, job title and different type of person. They would be responsible for Customer Validation and finding Pivots and searching around a series of unknowns. And they would look nothing like his failed VP of Sales.
I suggested to Rajiv his problem was pretty simple. Since he hadn’t yet found a repeatable and scalable business model, his startup did not need a “VP of Sales.” The early hire he needed to help him run Customer Validation and Pivots has a very different skill set and job spec. What Rajiv needed to hire was a VP of Customer Development and part ways with his VP of Sales.
I suggested he chat with his investors and see if they agreed. “I hope they don’t make me hire another “experienced” VP of Sales,” he said as left.
Lessons Learned
- Companies have titles which reflect execution of known business models
- Early stage startups are still searching for their business model
- Individuals that excel at execution of a process rarely excel in chaotic environments
- We burn through early VP’s in startups because the job functions we are hiring for are radically different, but we are using the same titles.
- Startups need to use different titles to indicate that the search for a business model requires different skills than executing a business model.
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Filed under: Corporate/Gov't Innovation, Customer Development |
Great post. Nothing to argue with here. It’s all about the right roles and responsibilities. Trying to fit a VP of Sales into a VP of Customer Validation EVEN if they say they can do it, is simply not wise. It’s like trying to make a pig sing – it’s difficult and annoys the pig.
Wow. That explains it. Succinct, and for me, profound. Thank you.
Great article, but it’s this quote that makes me weary of investors “I hope they don’t make me hire another “experienced” VP of Sales,”
Investors that “make” you do something you don’t want to doesn’t seem like a great way to lead a company.
Great post. I can’t wait to hear “the second half of this story”, someday 😉
Hi Steve
This is spot on. I am a sales and marketing consultant in Scotland. I work with tech startups. Have been selling in startups for many years and concur with everything you’ve said here. In Scotland we are struggling with a debate on Sales and Marketing in startups. It’s not well understood at all. I have published a short paper here: http://www.planys.com/images/Downloads/somehow_a_miracle_happens.pdf
that explains the situation. There are a lot of parallels between your posts and what I have observed in practice here. It’s high time that the reality of sales and marketing in start up businesses was understood and addressed properly. I was wondering if you would be interested in establishing some dialogue with us here in the UK.
Love the problem description but wished there was a bit more on the solution on how to find the right person to hire. Wished that was flushed out more.
i totally agree however, you come up with a new VP position (VP of Customer Development) without giving Rajiv (and us) any guidelines on what this person should know and what his/her experience should be.
Seems like VP of Customer Development is a product manager who understands startups and really works without walls between departments to get thee right products made for an appropriate target market.
well enumerated. this guy I used to work with, who I did not get along with and who I used to think was full of BS, said it another way which has since become extremely poignant: “job titles at startups are meaningless… anyone who’s been in a startup knows that.”
Great post. I really like these anecdotes because they explain not only what happened, but what it feels like. Ten years ago, before I was involved in hiring decisions, I worked at a small tech firm in the Bay Area that used a recruiter to hire folks from HP, (the old) Apple, and Microsoft. It was a horrible fit – most of them confused professionalism with bureaucracy and felt that, if you weren’t following a process designed for a publicly traded company, you weren’t being professional. Since then, I’ve met very few people in the tech industry who’ve successfully made that transition.
Ben Horowitz also wrote about this, albeit from a more analytical and less anecdotal standpoint, a couple months ago: http://bhorowitz.com/2010/04/21/why-is-it-hard-to-bring-big-company-execs-into-little-companies/
Great article. But am I off-base by saying that you should suggest to your friend to lay the man off instead of firing him? Or allow him to resign? He did his job, but his job was unnecessary. Not fair to fire a person like that for those circumstances. And tell your friend to accept the blame instead of chucking the VP of Sales under the bus.
I totally agree. Well, in fact I’ve been the sales director in a online media company start up since 2007. I was a little bit upset because I’d always thought I was really chaotic as you describe in your post. And now, with your post I realised I was doing well or at least was the best way to do it….Thank you! :))) Well, my results also told me so, but I was concerned anyway.
Well, in the future maybe I will have to change to another start up because I am not still a VP Sales…;)
Great post, Steve. The unstructured nature of selling in a start-up is what makes it so much fun.
I disagree that we should be creating new titles (your final ‘lesson learned’).
I agree that startups should not be using traditional titles (e.g VP Sales), but I don’t think creating new titles help either. Whatever titles you give to people indicate silos of activity, which I believe is generally unhelpful in the early stages. People who are “comfortable in chaos and change” probably don’t care about titles anyway.
IMHO it would be much better to indicate that people would become members of the Customer Development team and not worry about specific titles (if at all possible). That might even weed out applicants who care about such things.
So the problem I have run into without titles is that the world outside the startup has trouble with it. As a small company, you need to interact with customers and with business partners. Without some sort of either recognizable title or understandable title, it is harder to make those initial contacts.
INTRODUCTION
Steve, there are a lot of idiots with a lot of nonsense, on the Internet, and in business. This post proves that you are not one of the idiots!
You accepted the surprising point that the sales guy could fail and outlined some reasons. Surprising? The VCs, the recruiter, the CEO, and even the hire didn’t ‘get it’. And the failure of the VP was large, not small. All that is surprising. So, you did good work in a surprising situation, that is, you did well with the ‘unknown’. Good. I claim that idiots can’t do that work!
I learned something: I would have guessed that one way and another the VP’s background would have also included enough capability in what was needed to be much more successful. Yes, the startup selling was different, but I would have guessed that still the VP would have understood the situation well enough. I would have really been convinced from the background that he “read your book” (extra credit for the source!) and discussed its application twice.
Hope Gucci doesn’t introduce a new way to tie shoes; looks like the VP guy will have to go barefoot!
That someone could do so well in one direction but fail so badly in what we have to regard as a closely related direction remains surprising.
CURSE THE DARKNESS OR LIGHT A CANDLE
There is a serious flaw in your post: You did well identifying failure and even gave some reasons. The reasons do fit the data after the fact but, I fear, actually have relatively little ‘predictive’ value, and that means that as ‘reasons’ they are not very important; this situation is way too common in efforts to understand people.
In particular, for all the contempt I find easy of ‘stuffed suits’ from big companies, I’d say that the final lesson
“I hope they don’t make me hire another ‘experienced’ VP of Sales”
is poorly formulated, that is, is not the right lesson. Or, in this case, “We dance ’round and ’round and suppose while the secret sits in the middle, and knows”. Or, I doubt that we’ve found the secret.
So, you’ve found some things wrong and cursed that darkness. But as we know too well, there are many ways to be wrong and comparatively few ways to be right. Net, you didn’t do much to light a candle, really to tell us how to be right.
WHOM TO HIRE
Here’s my guess on how to be right: First cut, you want a guy who, yes, has been quite successful at sales but REALLY ‘gets it’ on the startup, and your book. How to test for ‘gets it’? He can articulate the ideas.
Next, he has to appreciate that the startup and its selling are to a significant extent new. So he has to be willing to (A) assume that he doesn’t already know everything of importance in this situation and (B) be willing to set aside a large fraction of what worked before. To some people, accepting (A) and (B) raise ‘anxiety’; they can feel like they are being asked to jump into the deep end with no life preserver, life line, or swimming lessons or to find their way to their destination across new ground without a map or compass. Some people get scared at such things, go all a-flutter, freeze up, and fail.
Next, he has thought about the issues well enough to ‘formulate’ a coherent explanation of the challenges and the solutions. Or, he has looked at a problem that is new to him and even nearly everyone, a problem without a clear solution, and has done enough high quality, original thinking to find, formulate, and articulate a solution. So here you are looking at his effectiveness to do original work.
How to do original work? A world-class expert describes the process in
“terms of entering a dark mansion. You go into the first room and it’s dark, completely dark. You stumble around, bumping into the furniture. Gradually, you learn where each piece of furniture is. And finally, after six months or so, you find the light switch and turn it on. Suddenly it’s all illuminated and you can see exactly where you were. Then you go into the next dark room …”
Extra credit for recognizing the source.
A guy who expects already to know the room or to be told just where the light switch is is the wrong guy.
You want him bright, alert, with an eagerness for attacking new problems and getting good, new solutions. You want him to have been successfully enough in such work not to be afraid of it. And in this case you want him at least roughly to be able to see his way clear to the goal.
And you want him to be able to formulate and articulate some ‘milestones’ between his start and actual success: Or, you want more ‘milestones’ than just “I’ll work on it until I get done”. Or, even as in the 1946 ‘The Big Sleep’, the Bacall character asked the Bogie character, “What will your first step be?”.
FIRST STEPS
The first steps won’t be just ‘selling’ but will be attacking a new problem in a new area. A big problem for business in such work is the propensity to avoid and ridicule any attack on the unknown and to say just “roll up your sleeves and get it DONE” implying that anything less direct is a waste of time.
So, in this case, the ‘first steps’ (depending on context, a biggie here) might be
(A) review the market from about 10,000 feet up and roughly identify the customers and/or users and the current vendors and products,
(B) be fairly clear on the ‘customer/user pain’ to be addressed, especially, do these people already understand that they DO have a pain and if they don’t maybe have some promising ideas on how to convince them that they have a significant pain,
(C) get a promising, thoughtful, relatively well informed first description of what ‘product/service attributes’ stand to be important to the target customers/users,
(D) get an overview of paths promising in this case for publicity and viral marketing,
(E) start to be clear on how actually to reach customers and close sales,
etc., again, depending a lot on the particular context.
MISSED OPPORTUNITY
I suspect that the VP could have been successful and that actually he was fully capable of doing the work well. If so, then the failure was a missed opportunity. Again, I just don’t believe that the needed ability was so rare or special that he didn’t have it. So, I doubt that the problem was ‘ability’.
So, here’s my guess on the cause of the problem: He was afraid.
Why afraid? For some background, i.e., where he was ‘coming from’, in ‘sales’, he had long been surrounded by simplistic notions of direct, thoughtless ‘instant gratification’. Or he has been up to his chin in simplistic, even bombastic, cliches such as knock’m-dead, quota-busting, commission-driven, cracker-jack, bang-up salesman.
His history of success in sales was NOT easy; he was a capable guy and NOT an idiot. For some of that selling, it is crucial to do well with a lot of intangible components and ambiguous situations; can’t do that and be an idiot.
So, he saw his job as ‘sales’ in a fairly direct sense and was afraid to consider anything else.
Instead what he needed to do was to back down, slow down, put his feet up, get some coffee, get quiet, and formulate how to get to be ready to close sales. So, this “how to” is a problem and, as usual, part of the solution is “divide and conquer”.
But, given the simplistic norms of ‘selling’, he was afraid to do such longer range, less direct, more strategic problem solving because others might criticize him. HE could be successful at being less direct and more successful but OTHERS might not go along with anything less direct.
The problem is a special case of something common: The real problem is, even if understood, in the context unspeakable. Thus the real problem doesn’t get addressed.
SOLUTION
Here’s my guess at a solution:
Have the CEO have an hour or so with the VP and admit that the company is not yet ready for ‘selling’. Instead, the problem of the VP was to identify and execute several steps, some involving interaction with the rest of the company, to be ready to start selling.
So, maybe the CEO and VP could agree on some ‘first steps’:
Step 1.
Maybe viral marketing will be important. Okay, question: How might viral marketing work for the specific company?
How to get an answer: Start by reviewing some efforts at viral marketing and where it worked and where it didn’t. Try to identify some reasons for what does and does not work. So look at successes such at Google, YouTUBE, Twitter, Facebook, and HotMail. Find some experts and pick their brains. Write a report of 20 pages or so with data and references, write a set of summary presentation foils, and in three weeks give top management a one hour overview. If the VP needs help in using the Internet, booking travel, or word whacking, then get him that help. Now we have a passing grade in Viral Marketing 101 as applied to the specific company.
Step 2.
Likely publicity will be important. Do much the same on publicity as on viral marketing. Cover publicity via blogs, Hacker News, Reddit, Digg, YouTUBE, TechCrunch, C|Net, VentureBeat, NYT, Forbes, Bloomberg News, publicity firms, etc.
Review how product features can contribute both to publicity and viral marketing, e.g., e-mail notifications, inviting in friends, working jointly.
Maybe have a memorable ‘scandal’ such as the thin, highly strained, unraveling, clothes strap on the extremely well endowed, struggling, embarrassed, drop dead gorgeous GoDaddy Girl!
Step 3.
Study how such new products/services can be introduced successfully. Identify, describe, and evaluate some important steps.
Step 4.
Study how product features, customer/user pains, and viral marketing, publicity, and product/service introduction can be combined effectively for the specific company. Identify some promising metrics and what to do with them. Outline some on how a corresponding ‘decision tree’ might go.
Step 5.
Study how some alpha or beta product/service customer trials might go — customer contacts, data collection, metrics, analysis, decision tree.
Step 6.
Formulate what to do and start doing it.
It is expected, accepted, and planned for that the process will be dynamic and stochastic and not deterministic — there will be feedback, data, metrics, analysis, decision tree traversals, and mid-course corrections. We can all understand these things and just accept them and not go all a-flutter and then freeze up and fail due to the lack of a simplistic, mechanical process.
So we divided the problem into six steps. Each step is much like just a high school term paper — collect information, organize, think, synthesize, formulate, document, and present. The actions are all ‘dynamic’ and, thus, have ‘feedback’ via ‘decision trees’. There is likely enough in ‘structure’ and ‘process’ to keep the Board happy that solid progress is being made.
For the VP, he no longer has to get to ‘sales’ or ‘customer development’ in one stroke but only has to attack each of the steps one at a time, and likely he CAN do that without being afraid.
Much of the work in the steps will be useless, but there is no way good work on the steps won’t help a LOT. Everyone in management, and the Board if they want to pay attention, gets a stack of papers, one paper and a set of foils on each of the steps. There will be some crucial information in there. Nearly all the cliche, shoot from the hip, off the top of the head reactions will have been stated and addressed; then anyone just shooting from the hip will get directed to the appropriate step, paper, chapter, and page number and told that they are behind in the work, hurting the effort, and need to get caught up. So, we cut out continual floundering in nonsense and make progress.
There is a construction analogy: The VP was sent out to build a house much like a finish carpenter. He did find the plot but there was no excavation, foundation, frame, blueprints, etc. So, he was missing the work of the general contractor, architect, and customer with the broad requirements. So, he needed to back up, do the prerequisite work, and get to where finish carpentry was the work to be done.
My greatest surprise would be that the VP could not do these prerequisite steps once it was recognized and accepted that they needed to be done.
That was a great reply. The VP of sales was afraid which eventually led him to be upset and discouraged. I have found that rational, always learning, never afraid to admit failure and gung ho types usually work the best for start ups.
Great insight. It made me think.
Big companies also have a function where there is no agreed roadmap and product to sell. It’s called Business Development. You will find Biz Dev people in mainly service companies rather than product companies. In fact most big outsourcing companies tend to have a department focused on Business Development whose metrics are not sales numbers but deal identification, partnerships etc.
This just goes to show that customer acquisition is quite potentially a misunderstood concept in the startup community. It appears that Rajiv had the right idea about learning from lost sales and having the mindset to make changes that might better shape the success of the company. Clearly the VP of Sales selected was a poor fit from a number of perspectives. He appears wedded to a single, albeit successful (in the past) selling methodology. It also appears he was not a person capable of initiating or making necessary changes in his approach to fit the needs of the company. Sales is more art than science, and much more so in a startup. Most likely this guy was a poor fit for this role. He may still be a bang-up, hard charging, closer but just not the right fit for a role requiring vision, supreme listening skills, and the ability to lead the effort to drive the necessary changes in making the product more successful in the marketplace.
Hi Gary,
thanks, it makes good reading.
If this mistake is structurally “detectable”, can we build a “vp of sales” detector?
It could combine info from Crunchbase, the company’s website, and other sources. So you get an alert when companies pre-product-market fit hire VPs of … Or does this already exist?
(If these companies would be publicly traded, it would make good trading). And it would certainly lead to less waste…
Vincent
“I hope they don’t make me hire another “experienced” VP of Sales,”
I think one of the biggest challenges of the Lean Startup CEO’s job is working with “old school” VC’s, Investors and Board members and communicating/ educating them on the different needs of a Scaleable Startup vs Large Company. The general misunderstanding of a business in this stage of their lifecycle leads people (with the best intentions) to inject “Large Company Resources” to help the Small Startup grow into what they hope it will be one day.
Thanks for spreading the learnings! I hope this becomes very circulated in the investment and HR Industries.
[…] Job Titles That Can Sink Your Startup I had coffee with an ex student earlier in the week that reminded me yet again why startups burn through so many early […] […]
I can’t understand why getting paid for that work isn’t everyone’s dream job.
Also, series A funding before a repeatedable and scalable business surprised me. Is that par the course in the Bay Area? Here in NY we require proof of traction before Angel Investing.
A lovely fable. None of it is true. No one would hire a vp of sales before fit is proven. But a good story to teach us to stay away from corporate salespeople.
Sounds like the VCs don’t believe in Rajiv. No founder CEO should “run out of bandwidth” to “close initial orders” If there are no orders, there are no customers… so what else is a CEO doing that is more important? No wonder they’re telling him what to do.
Good post. I consider myself a customer development pro but have been in situations completely in reverse: the company(s) have stubbornly resisted to adopt their products/services/processes regardless all the customer evidence that they should. They then go on to cycle through new VPs of Sales and VPs of Marketing until the investors have had enough and take out the CEO.
–Bill Ross
bill@design-works.com
http://www.design-works/war/thruthenoise
As a CEO, I made this same mistake.
All the commentors who think it is deplorable must be smarter then me. I’m glad to see that Steve Blank has seen it before, so the rest of us can retrace our steps and correct.
Harvard Business Journal wrote an article on this very same subject The Sales Learning Curve: http://hbr.org/product/sales-learning-curve/an/R0607J-PDF-ENG
Let’s face it, when you’re in new, unknown territory you take the land marks as they come and navigate to the best of your ability.
Many founders have said they wished they played with their business model more in the early days so they could have more data.
I have EXACTLY the same experience as CEO (mistake), and since read that HBJ article as well in search for answers and learning – the reason I read Steve’s blog and so many others. PS- I too admire how so many are smarter than us 😉
So, the problem here is not title, but function. “Sales” is the process of cultivating leads into customers for a given product. The VP of Sales at [Enter large company] is not doing product development. He may find it interesting, but that is not what he does. The VP of Sales grows great sales people. Often, the best VPs of Sales are NOT the best sales people. They are different talents. One is a teacher, mentor, coach, the other is the high priced do whatever it takes to get through the gate keeper to pitch to the decision maker and don’t stop asking for the order until you get it kind of person.
The greatest sales people will sell Green Eggs and Ham, over and over and over. They do not Green Eggs and Ham and potatoes, that is different … Just Green Eggs and Ham!
In a start up, you need a VP of Business Development. There are nuances to this. Not a VP of Corporate Development from a F500 firm, but probably the person that held a “sales & marketing” role at a 10 person company. One where the product was not well defined, but they were early in and helped identify the key features and probably were the first person to identify the need to pivot.
VP could be Director, but you aren’t going to get a person into a new company with a Director title if they have experience. It is ok to take on a jr person if they know what they are doing and have contacts in the field.
Business Development is kind of like “Customer Development” but it is tied to generating revenue, which if you want to get contracts signed is what this is all about. This is an industry term. The title is defined, there are people with this as a career ideal. As your company grows, the role of the Biz Dev team will change and take on more of emphasis towards marketing, or towards sales, or towards partnerships, or ___ whatever you need help with.
Biz Dev pros know that that the product is not defined. They pick up the phone, they go to tradeshows, they call their friends and they say “this is what we do, what do you do? And how can we work together?” Get ready, this is the team that will sit in your CTOs offices saying “Customer X wants this widget tomorrow, can you do that?” Maybe you can, maybe you can’t, but the important question to ask will be do you want to?
Alex,
You *clearly* haven’t read Steve Blank’s book. Here is what he thinks about “Business Development,” and I agree with him:
http://bit.ly/9Hv6fh
His is the second entry just after Mike Maples’.
–Bill Ross
bill@design-works.com
http://www.design-works.com/war/thruthenoise
I should have made my point more clear as Through the Nose points out, there is disdain over biz dev oriented titles.
I don’t think there is a need to come up with a new title. Some people prefer not to use titles in the early days. My point is that this role of helping shape customer development, to sell, to go after revenue where possible, to learn and understand is the role that most biz dev people have filled … regardless of title. Call it what you like, but as an early start up still trying to find the product market fit you should find people that can help you. You are probably not looking for people that can build world class sales teams. At least that is my guess.
Steve,
Great post. Couldn’t agree more.
Joe
Great article!
I ran a consulting firm for 16 years – I TRIED to find sales people who could understand the customer, understand our capabilities and bridge the two.
I spent much time and money vetting people and was never successful in finding the right fit. Over time I was the only one who could close deals.
This hurt our scalability – but it was clear that this process of continuous customer discovery and validation is needed skill of early stage ventures.
Some people call this “title” biz-dev. But I found even folks who had this pedigree lacked the vision of what was required. The CEO must create and find this unique skill set and foster the vision…
I have three separate responses to this: Agreement, Observation and Elaboration
AGREEMENT
The CEO should foster the vision, however, if it is all about the CEO’s knowledge and experience and it cannot be ‘extracted’ and leveraged, you basically have a one-person company with a support team.
OBSERVATION
When I am recruiting sales people and they tell me they have done or want to do ‘business development’ I run. In my experience ‘business development’ translates into, “I want all the glamour and fun of sales with none of the accountability.” In other words try to give a bus dev person a quota and they will move on to the next sucker…
ELABORATION
Your background in consulting, in my opinion, makes you somewhat uniquely qualified for startups. I’ve been [primarily] in sales for over 25 years. With a couple of stints at Fortune 500, most of this time has been with early stage startups. I’ve learned that at least in tech, there are three primary offerings: hardware, software and services.
• Selling hardware is relatively easy; it either meets the spec or it doesn’t.
• Selling software is more difficult as it is somewhat ‘mutable’ and different scenarios can make this complex.
• Selling services is essentially matching somewhat nebulously defined assets and capabilities, with somewhat nebulously defined requirements and resources. This requires “out of the box” thinking AND business acumen.
The best sales-oriented customer development team member should have a services background. Essentially, their job is to match the start-up’s loosely defined solution with a hypothetical customer need. The result should be that the company makes money and the customer perceives value for the money spent. The real bonus is when after doing a post mortem on the deal it is determined that the deal is replicable.
Towards that end, I have been in three startups (Boston-based, DC-based, Silicon Valley-based) that thought they had it nailed after closing their first deal and built the company around it. They all failed. Interestingly enough, one of them was a former employee of Steve Blank’s and highly touted the customer development approach: he then went on to break all of the rules… In fairness to him, when he gave me Steve’s book he said something to the effect, “Bill, you really don’t need to read this. You already get it.” So I guess he wasn’t all bad… 😉
Bill Ross
I have been on the ground floor of 3 application software companies as SVP Sales, COO and CEO. Your post hits the nail on the head and I wanted to add value to your thoughts. Here is the issue I have experienced. When the startup defines its market, which includes the industry and company size, it must include a detailed profile on who is the buyer AND decision maker. Most of the time this is a different person. The reason this is so important is when a sales call is made, a startup’s solution is not going to be in the budget like an ERP or Warehouse management solution. The sales person needs to convince the buyer and decision maker why this investment on their part will make them professionally and personally better off. Therefore, you must know what this person’s priorities are and how these priorities fit into the value your product delivers. Many times I have said to my champion at a prospect that “my job is to deliver value to your company and in the process, make you look good.”
The person who can do this is very different than the experienced sales pro coming out of a large organization.
This person first and foremost must exhibit an aura of TRUST because your champion can be promoted or fired by buying this solution. This same trust is important when recruiting the type of individual they will hire to be part of the sales force. Typically the profile of the A player is one who has sold in a missionary selling environment before, and does not need hundreds of references and extensive marketing support to succeed. This person must have entrepreneurial qualities which includes “what is the best deal for my company, as well as the prospect I’m selling to”. You don’t want this person to be the classic mercenary and
close large deals that are not in the best interests of the company going forward. The profile also includes a person who is excellent at communicating both within and outside of the organization. Inside because everyone in a small firm needs to be clear on the strategy of who you are selling to and may be used in the sales cycle. Don’t let them know what’s going on during the ride from the airport to the prospect site.
Outside because you should have partners or firms you want to partner with who need to be convinced of your value to their business. (and good be future acquirors of your firm)
In summary , the VP of Sales must have experience in a sales environment where the solution is not in the budget and he/she acts as the CEO in the field. The title for this person should reflect importance and accountability – TO THE PROSPECT – and should therefore be Senior VP, or President of (fill in industry initiative). This again helps in recruiting A players.
This would not be disingenuous. Other than the CEO, there is no more important exec than the one in charge of getting new customers signed up and serving as future references for your product.
As always great post. Amazing insight. I love the in-depth wisdom from live experience.
I wonder how many entrepreneurs and – more importantly – how many VC’s read the “Innovator’s solution” and “Seeing What’s Next” by Christensen? I just (finally) got to reading those and I find a lot of parallels to your (Steve’s) insights.
However, sometimes it’s not just about getting what one wants it’s also making your own mistakes. Since I have kids I have learned that most times we just have to bang our heads against the wall even though we’ve been told better. In many ways in my last startup I’ve made the same mistake. Mind you, I had been told so, read about it, etc…but still, I just had to make them.
This is a much needed article in hiring within a start-up. Will be read and re-read and filed under “people and business development” for ongoing use.
[…] Steve Blank: Job Titles That Can Sink Your Startup “In a startup you need executives whose skills are 180 degrees different from what defines success in an existing company… That means the function called Sales used in a large company (and the title that goes with it, “VP of Sales”) don’t make sense in a startup searching for a business model.” […]
[…] Оригинал статьи http://steveblank.com/2010/09/13/job-titles-that-can-sink-your-startup/ […]
Steve,
Great post. So many of your points are spot on and and are just some of the significant reasons I left search and launched my current business, which is a very different paradigm from how companies have hired in the past and continue to hire.
I can’t tell you how many times I saw VPs of Sales hired by a founder (who doesn’t have the first clue how to do this) with a recommendation by a VC (also who mostly don’t have a clue how to hire). It’s like the blind leading the blind. Better yet, it’s really like the definition of “insanity”. Doing the same thing over and over and expecting a different result. Ugh. It’s just so sad to see.
I do have to disagree with you on one item however. You say that the job title should reflect execution of a known business model. While I don’t disagree with this in theory, it’s just not that black and white. For example, one of my new hires has an Operations title rather than sales. This title is getting him great phone response. His title doesn’t completely reflect his position. I also know some extraordinary Sales VPs who could have gone into Rajiv’s company with the VP Sales title and successfully executed the position based on your high level explanation of the job. These are guys who have executed beautifully in startups prior to there being a repeatable sales model. They know how to do Business Development (or what you’re calling VP Customer Development).
What’s missing here and in so many situations is that there was never any talk of cultural fit, team culture, skills and abilities needed to be successful in the company, or even determining how to build a talent acquisition process based on the above.
Although you’ve brought up a perpetual problem, it’s only a piece of a total solution for any company. I’d be interested in hearing your thoughts on why you think this is the case.
[…] no one beside Steve has applied the same logic to other positions at a scalable startup. (Check out this blog post for […]
[…] rapid growth. Titles can often get in the way as noted on other questions here and by Steve Blank ( http://steveblank.com/2010/09/13… )We have an environment where shared leadership is practiced, people are empowered, and we are […]
[…] for that exact reason. Steve Blank, a leading thinker in the software startup field, wrote an article last year pertaining to this issue. Traditional titles were defined in a corporate environment […]
[…] job spec’s for the same title differ wildly depending on whether the job requires search versus ex…. Founders search, operating executives […]
[…] job specs for the same title differ wildly depending on whether the job requires search versus execu…. Founders search, operating executives […]
The problem here was letting your VC dictate your strategy. Then hiring a Blue Chip sales person… never, ever, ever hire a Big Corp sales person for a start-up. they will fail, and fail expensively. Start-ups require a very different type of sales person. I laugh when I hear the job req for most start-up sales jobs… they are laughable and are are a solid way for me to gauge the wisdom and experience of the founders.
Dear Steve,
man oh man…I just finished a stint toiling under an (can I say idiot) a VP of sales and vowed I would never work again under this scenario and launched my sales and business development consulting practice under my own label for this scenario you painted so aptly in Fast Company was my day to day horror!!
And we had 10 million series A round and the sales ship is being sailed by just what you descibed here.
Thanks you for validating what I’m about to do in charting my company (www.oneillprod.com) to help alleviate such lack of flexabilty and customer centric non-adustment…I believe my leaner sales and business development model can be used by any start-up regardelss of market vertical.
Thank you for this informative and useful description which will serve as my raison d’etre as a sales and business develoment resource to start-ups and for start-ups!
Sincerely,
Sean
Sean O’Neill
soneill3@verizon.net
[…] for a business model requires a different organization than the one used to execute a plan. Searching requires the company to be organized around […]
[…] is what we’re looking for) over a traditional sales job (which this job isn’t) then read this great Steve Blank blog post. Especially the second […]
Everything in this piece resonates with my experience. I am wondering if you also have specific tips for making roles and responsibilities clear on a very early-stage team with a lot of overlap in functions (we’re all sales, because we’re all using our networks) while we are still very much developing our product, company, and understanding of customers.
From my experience as a manager, it’s all about good check-in/dialogue/communication processes to share learnings, sync, and keep learning from each other (without holding each other back with too much coordination), but I would be curious to get specific examples from what you’ve seen.
Thanks very much for this –
Lisa
The really amazing thing is that I still see this happen after all these years. The 2 most disruptive hires in a startup are the VP Sales and a CTO with an MBA.
Start ups don’t want to hear this when you advise against it because logic and traditional wisdom tell you otherwise. I wouldn’t name companies but assure you it’s still a major issue.
One last thought to ponder on this great question. Try balancing a startup organization with a market development person on even footing (a true peer) with “sales”. It’s a hybrid role that involves deep rooted knowledge in developing new markets (not sales 101 or even 301) and it’s also a role that involves business development. That’s how you do it.
This is an appropriate article even three years after it was written. It’s a perpetual problem that has been going on for many years. However, this is recruiting 101 and nothing will change unless/until leaders realize their processes aren’t working.
First off, I’ve seen Founders follow the lead of their VCs like a nation of sheep for over 20 years. VCs, by and large, don’t have the first clue how to recruit successfully. All they care about is not spending money on the most important hires. They think they can do it themselves. Last time I checked I sent work out to the professionals who are experts, e.g., Do you represent yourself in court or hire an attorney? I’m not sure why VCs and company leaders so often think they are professional recruiters. And I’m referring to the 2-5% of us that are really quality, not the recruiters for the masses types.
Secondly, it’s not about the title Steve. It’s about the Position Description. If the PD isn’t built in tandem by the stakeholders and recruiter, then the company gets what it gets. I spend considerable time with my clients determining what they need. We don’t care about the titles.
Third, to address @Mike Antonucci’s comment, “Start ups don’t want to hear this when you advise against it because logic and traditional wisdom tell you otherwise. I wouldn’t name companies but assure you it’s still a major issue.”, he’s correct. I won’t consider taking on a search unless the company understands that we are in a committed partnership and I’m the expert advisor on this. After all, I’ve been “hiring” people many more years than they have. Part of the problem here is that most companies have a “penny wise, pound foolish” attitude toward hiring and want to use as many contingent recruiters as possible for their hiring needs. There is no committed partnership here, so what do companies expect when they get the wrong people or the recruiters try to squeeze a square peg into a round hole??
I’m late to this party, but would love some feedback from the other side of this conversation….the employee who left. As one of the founding members of a startup back in 2007, I was named “Vice President” and was in charge of building the infrastructure of the business while the other three guys went out to raise capital. I set up our HR systems, investor relations processes, built a brand and marketing platform, contracted for and built out new office space, etc etc. It was the job of many hats (common, obviously). But the title is now getting in my way now that I’m back applying for roles that are not VP levels within the construct of the more traditional business model. How do I adjust? Do I rename the role? Leave the title off? It’s tripping me up and I can’t find a solution I’m comfortable with. Thanks for any advice you’re willing to share.