In my discussions with B2B founders and investors around hiring, one of the things that doesn’t come up very often is how challenging it is to hire a good sales leader early on. However, the problem is even more serious when we’re talking about B2B tech companies focusing on the Indian market.
Jason Lemkin, Founder of SaaStr and one of the foremost thought leaders in the enterprise software (primarily SaaS) space, has a treasure trove of material on hiring sales folks (and sales leaders). One of the frameworks he speaks about is the different kinds of senior sales folks/leaders or potential VP sales folks that a company needs at different stages of their SaaS journey.
In his post, he says that once you get up to $1 million annual recurring revenue (ARR), you need an evangelist who can get the buzz going and get early customers (either through their rolodex or via references). Post that, you need a person who can hire great folks, put in repeatable processes, and create a machine that will be able to drive contract values up and make the most of the little initial traction that you’ve seen (with the limited PR that you might have). After that, the VP of sales will come and scale things up.
Image source: SaaStr
The right VP of Sales, according to Lemkin, is one of the most critical hire in the journey of an early-stage SaaS company (or any other enterprise company for that matter). The hardest among these is the “Mr. Make it Repeatable.” (you can read his post to find out why). And Lemkin talks about it being super hard to find a good person. And he’s only talking about the US.
In India, the challenges in finding such a “Mr. Make it Repeatable” person include:
- Only a handful of homegrown SaaS companies have crossed the $2‑3 million ARR (contribution from Indian customers) mark. Among the ones that have crossed this mark, it’s primarily source of revenue is from international markets. They typically have an inside sales/pre-sales team doing prospecting/closing smaller ticket sizes out of India and maybe a couple of guys outside India doing the closing of larger ticket sizes.
- Most of the companies (unless they are selling below <10K USD ACV) are STILL reliant on founder sales or at least the founder plays a critical role in closing deals.
In 99 out of 100 cases, if you’re an Indian SaaS B2B business that has seen early traction or product market fit (say $200K‑$500K ARR) and you are looking to hire a VP Sales to take you through scalable product market fit (say $5M+ ARR), you might end up with a VP Sales who either:
- Has never done this before (scale something from $0.5 million to more than $1 million to over $10million in ARR selling to the Indian businesses). (Think of most existing SaaS VP/Director sales candidates in the market currently.)
- Or if they have seen that scale, most would have never faced the challenges of a product which is yet to see a scalable product market fit. Thus, they are unable to cope up with product development, price discovery, concept selling or managing the team dynamics all at the same time in a hyper-fast paced environment. Therefore, they end up missing their targets. And in less than a year, either they quit or are let go, given how often they might be the most expensive cost to the company (think of Sales leaders from MNCs like Microsoft or Oracle).
For example, if you take a look at the B2B SaaS companies in India selling to Indian customers, their average tenure of the early-stage Director/VP Sales is maximum six to 12 months.
What does this mean?
For starters, it means that the next five years are going to be very exciting because a new breed of sales leaders, who are adept at scaling a SaaS company within India, are going to emerge from India (there aren’t many yet, but they will come in the next five years).
It also means that if you are currently trying to find a senior sales leader, you are going to have a tough time finding the right one. Some of the things worth trying are:
- Finding entrepreneurial folks who have seen scale. So think of former/current entrepreneurs who have sold B2B software and then went on to join an MNC like Microsoft/Oracle/Salesforce for a few years.
- Finding folks from MNCs who have seen failure/modest success at an early-stage company. So think of that guy from Oracle/Dell/Microsoft who decided to join a startup and messed it up, but is still looking to give it another shot. The “messing up” part will ensure that the person is willing to unlearn and the “giving it another shot” will ensure that he/she is still hungry to build something in such an environment.
- Find folks from big companies who are leading/growing divisions that are not yet the major revenue source but are growing fast. This brings in some sort of intrapreneurial aggression because they are trying to get the management’s mindshare and in general, would face some challenges similar to that of a startup (around product development, budget constraints, making their division aspirational in front of the rest of the company, etc.).
I spend a lot of time trying to find new interest/skill-specific communities. In the last few years while there have been enough communities around tech/IT, design, analytics, finance and now even marketing/growth hacking, I have yet to come across serious communities around sales. The early adopter here is iSpirt. I think there’s a great need and opportunity to create a community around sales (and primarily tech enterprise sales).
Would love to hear about what has worked for you in the comments section below.