Scaling and Sales

When scaling your company, the biggest thing that’s going to change is your distribution engine. You’re moving away from your entrepreneurial sales model, and what you’re trying to build is a replicable, scalable distribution machine that will allow you to efficiently grow your business.

Transcript

I’m Dale Chang.  I lead portfolio operations at Scale Venture Partners.  I have a background in selling enterprise software at companies like Proof Point before advising high growth startups like Box, DocuSign, and LinkedIn. 

Eventually, you’ll exit out of the startup phase, and enter into the scaling phase of your business.  The biggest thing that’s going to change is your distribution engine.  You’re moving away from the entrepreneurial sales model and what you’re trying to build is a replicable, scalable distribution engine that will allow you to efficiently grow your business.  Learning how to effectively scale a distribution engine is the biggest key to success at this stage of your company. 

There are a lot of things to think about as your company crosses the threshold from a startup into a scaling organization.  I’m going to boil it down into three of the things that I think are most important.  The first thing is hiring your first Vice President of Sales.  This is a person that’s going to help you build that repeatable, scalable distribution engine.  Second, architecting what that distribution engine looks like.  They need to build something that works now, but also optimize that for growth in the future.  Lastly, you need to think about how sales and marketing are aligned to maximize your growth in the market. 

Hiring your first VP of Sales is a really big step.  This person is responsible for building and architecting your scalable go-to-market model.  The hard part is actually finding and recruiting the right executive to help do that.  Not only is this person responsible for delivery a quarterly number, but this person also is responsible for building and architecting a scalable go-to-market model and hiring, managing, and motivating a sales force. 

Here are some of the shared attributes that I see across very successful VPs of Sales at a scaling organization.  You need to look for someone with a track record of success, both personally and professionally.  You need someone who’s assigned a goal and has the ability to achieve and over-achieve that goal consistently.  Look for someone who can deal with ambiguity.  In a scaling organization, things are changing all the time.  You have new buyers new products, new competitors entering the market, and your VP of Sales needs to be flexible to be able to react to changing environments.  Look for people with a natural intellectual curiosity.  There’s nothing better in a scaling organization than someone that questions and asks why—why do things operate the way that they do?  Are there different ways that we can structure our organization or go to market to get better results?  Team orientation is also a very important trait.  Someone who has the ability to work with others, share knowledge, because that’s one of the most important things in a scaling organization is to take what you’ve learned by talking with customers and share that not only with the rest of the sales team, but also with products, with marketing, and with the executive team.  Look for someone who’s a great coach, but can also be coached.  In a scaling organization, it’s very important for someone to be able to provide great feedback to their team so that that organization can grow, but it’s also important for that person to be open to feedback so that they can help the organization grow.  I recommend that you talk to people that they’ve worked for before.  Ask them their opinion on whether or not that candidate was able to actually scale with the organization and design a go-to-market plan.  Talk to people that have worked for them.  Would they work for them again?  And even talk to their customers.  Did the VP of Sales candidate actually understand what the process was that that buyer had to go through, or did they feel as though it was purely a transaction? 

Everything that you love about your high velocity inside sales organization is about to change once you go out into the field.  Oftentimes, it’s dictated by the customer.  The customer has a new way that they need to buy, or competition has entered the market and is changing the way that you need to sell to that customer.  Other times, what you’re looking for is incremental growth, bigger customers, moving from an SNB model to an enterprise model, or expanding geographies, moving from your own local hometown into a regional model, national, and eventually globally.  Sales cycles will lengthen, product requirements will get bigger, and contracts will definitely change.  The only thing is, is that we don’t know how these will change.  We advise our companies to continue to operate their run rate business over here, and earmark resources that help with the new go-to-market model over here.  Customers, products, and competition will always be changing, and we advise our companies to make sure that their distribution engines evolve with that. 

The last thing that I’ll leave you with is to ensure that you have alignment between the functional areas of your organization.  All too often we see organizations fail to reach their full potential because one functional area is misaligned with another functional area.  Sales and marketing misalignment is the primary driver of failure to scale.  Marketing may be delivering a lot of leads to the sales organization, but sales may not be following up on those leads, or may not be communicating back to the marketing organization that they’re of any quality to the sales organization.  Solving this goes back to the team orientation of the players on your team, and also using data to actually understand what’s happening.  You need to get your team on the same page and get the data all on the same page.  

Suggested Readings

Founders School || Scaling Your Company || Scaling and Sales || Impact Guide (PDF).

Kate Mitchell. “Listen, Learn and Be Scrappy.” The Accelerators. Blog post. August 2, 2013.

Kate Mitchell. “One Price Doesn’t Fit All.” The Accelerators. Blog post. April 10, 2013.

Frank V. Cespedes and Jacco van der Kooij. “Hiring Star Salespeople Isn’t the Best Way to Grow.” Harvard Business Review. Article. February 1, 2016.

Jeff Bussgang. “The Secret Weapon to Scaling: Sales Operations.” Seeing Both Sides. Blog post. November 18, 2015.

Entrepreneurial Selling – “Sales in Context” with Craig Wortmann

Entrepreneurial Selling – “Entrepreneurial Sales Model” with Craig Wortmann

Questions for You

Are we ready to hire a VP of Sales?

If so, what channels will I use to find a great VP of Sales?

What traits are vital for this person to be a cultural and physical fit in my business?

What team members will this person interact with? And what type of leader will the sales team need to follow in order to efficiently work?

What is the mindset of a buyer or purchaser in order to buy our product or service?

What kind of resources (and how many) will I keep aside in order to build up the new sales engine?

How will I maintain our current sales process while we start to scale up the sales engine?

What processes do I have in place in order to keep sales and marketing aligned currently? Will these have to change as we scale?

Questions for Your Team

What is the mindset of a buyer or purchaser in order to buy our product or service?

What traits are vital for a VP of Sales to be a cultural and physical fit in our business?

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