Let me tell you a story about Albert. Albert’s a salesman. Has been for 20 years. He got his start in the early nineties as an entry level salesman for Oracle. They taught him how to be relentless; how to treat every no as being one step closer to a yes, how to eat nails for breakfast and most importantly, they taught him how to close business – in other words, they taught him to be what those in the industry refer to as a “meat-eater.”
Albert worked at Oracle for 5 years. He made a great living but then he saw some of his colleagues at Oracle start leaving and joining hot new internet startups where they got big chunks of equity and a few of them became instant millionaires when the company they joined went public after 18 months. Albert decided to do the same and joined Coffee Cups Dotcom in 1997. Coffee Cups went public in 1999 and Albert cashed in his stock for $1.2 million. He got married, bought an expensive house and car, and joined another hot startup which promptly crashed and burned in mid 2000 when the whole house went up in flames.
Albert worked at three different software companies during the next decade. He earned the reputation as fantastic salesman and made a very good living for his family. From 2009 until the present, Albert worked at Tube Connect until they were acquired by PeopleForce.com earlier this year. Albert called his favorite head hunter and told him to find a senior sales position for him. As CEO of your startup company, you were completely impressed with Albert during the interview process and knew that if you could somehow land Albert, all your sales problems would be answered. You knew you couldn’t pay Albert a competitive wage so you offered him an attractive piece of equity and a shiny new VP Sales title which he demanded if he was going to join. (Stop me if this is starting to sound familiar).
The challenge you now face is that Albert has never managed people and while this is of course a broad generalization, great meat-eaters are seldom great managers, they require completely different skill sets. You will see this problem grow as your company scales. It will work fine for a while. Because Albert is such a great salesperson, he will be able to meet or exceed his quota for the first year while hiring the first couple of salespeople for the company.
This is where the ball begins to unravel. Albert starts spending more time managing people and being stuck in paperwork and reporting hell than selling. His numbers begin to drop and both you and he become frustrated. Now what? You’ve developed a great relationship with Albert and really like him. He’s made great contributions to the company and you don’t know how to handle this. Do you replace him? Do you hire on top of him?
This of course was all avoidable. The challenge has and always will be that because of their success, great meat eaters start believing they’re worthy of VP titles so they push for and wind up in VP Sales positions that they’re not qualified for and because of their successful track records as salespeople and great references, startup CEOs continue to fall in love with them, as they should, but not as a VP Sales. Great Sales VP’s have been taught how to manage people.
Part of being a successful VC is pattern recognition and this is a pattern that I and many of my colleagues have seen play out way too many times. I hope that when it comes time for you to hire great salespeople and a great VP Sales, you’ll remember this and avoid some difficult decisions down the road.