Kellblog covers topics related to starting, leading, and scaling enterprise software startups including strategy, marketing, positioning, management, go-to-market, SaaS metrics, and venture capital.
It was early in my career, maybe 8 years in, and I was director of product marketing at a startup. One day, my peer, the directof of marketing programs hit me with this in an ops review meeting:
You want to be judged on intentions, not results.
I recall being dumbfounded at the time. Holy cow, I thought. Is he right? Am I standing up arguing about mitigating factors and how things might have been when all the other people in the room were thinking only about black-and-white results?
It was one of those rare phrases that really stuck with me because, among other reasons, he was so right. I wasn’t debating whether things happened or not. I wasn’t making excuses or being defensive. But I was very much judging our performance in the theoretical, hermetically sealed context of what might have been.
Kind of like sales saying a deal slipped instead of did not close. Or marketing saying we got all the MQLs but didn’t get the requisite pipeline. Or alliances saying that we signed up the 4 new partners, but didn’t get the new opportunities that were supposed to come with them.
Which phrase of the following sentence matters more — the first part or the second?
We did what we were supposed to, but it didn’t have the desired effect.
We would have gotten the 30 MQLS from the event if it hadn’t snowed in Boston. But who decided to tempt fate by doing a live event in Boston in February? People who want to be judged on intentions think about the snowstorm; people who want to be judged on results think about the MQLs.
People who want to judged on intentions build in what they see as “reasons” (which others typically see as “excuses”) for results not being achieved.
I’m six months late hiring the PR manager, but that’s because it’s hard to find great PR people right now. (And you don’t want me to hire a bad one, do you?)
No, I don’t want you to hire a bad one. I want you to hire a great one and I wanted you to hire them 6 months ago. Do you think every other PR manager search in the valley took 6 months more than plan? I don’t.
Fine lines exist here, no doubt. Sometimes reasons are reasons and sometimes they are actually excuses. The question isn’t about any one case. It’s about, deep down, are you judging yourself by intentions or results?
You’d be surprised how many otherwise very solid people get this one thing wrong — and end up career-limited as a result.
One of the hardest hires — and one of the hardest jobs — is to be the first VP of sales at a startup. Why?
There is no history / experience
Nobody knows what works and what doesn’t work
The company may not have a well defined strategy so it’s hard to make a go-to-market strategy that maps to it
Any strategy you choose is somewhat complex because it needs to leave room for experimentation
If things don’t work the strong default tendency is to blame the VP of sales and sales execution, and not strategy or product. (Your second VP of sales gets to blame product or strategy — but never your first.)
It’s a tough job, no doubt. But it’s also tough for a founder or new CEO to manage the first sales VP.
The people who sign up for this high-risk duty are often cocksure and difficult to manage
They tend to dismiss questions with experienced-based answers (i.e., well we did thing X at company Y and it worked) that make everything sound easy.
They tend to smokescreen issues with such dismissals in order to give themselves maximum flexibility.
Most founders know little about sales; they’ve typically never worked in sales and it’s not taught in (business) school.
I think the best thing a founder can do to manage this is to conceptually separate two things:
How well the sales VP implements the sales model agreed to with the CEO and the board.
Whether that model works.
For example, if your team agrees that it wants to focus on Defense as its beachhead market, but still opportunistically experiment horizontally, then you might agree with the sales VP to build a model that creates a focused team on Department of Defense (DoD) and covers the rest of the country horizontally with a enterprise/corporate split. More specifically, you might decide to:
Create a team of 3 quota carrying reps (QCRs) selling to the DoD who each have 10+ years experience selling to the DoD, ideally holding top secret clearances, supported by 2 sales consultants (SCs) and 2 business development reps (BDRs) with the entire team located in a Regus office in McLean, VA and everyone living with a one-hour commute of that office.
Hire 2 enterprise QCRs, one for the East and one for the West, the former in McLean and the latter in SF, each calling only on $1B+ revenue companies, each supported by 1 local SC, and 2 BDRs, where the BDRs are located at corporate (in SF). Each enterprise QCR must have 10+ years experience selling software in the company’s category.
Hire 2 corporate reps in SF, each sharing 1 SC, and supported by 2 BDRs calling on sub $1B revenue companies. Each corporate rep must have 5+ years experience selling software in the category.
In addition, you would create specific hiring profiles for each role ideally expressed with perhaps 5-10 must-have and 3-5 nice-to-have criteria.
Two key questions:
Do we know if this is going to work? No, of course not. It’s a startup. We have no customers, data, or history. We’ve taken our best guess based on understanding the market and the customers. But we can’t possibly know if this is going to work.
Can we tell if the sales VP is executing it? Yes. And you can hold him/her accountable for so doing. That’s the point.
At far too many startups, the problem is not decomposed in this manner, the specifics are not spelled out, and here’s what happens instead. The sales VP says:
The plan? Yes, let me tell you the plan. I’m going to put boots down in several NFL cities, real sales athletes mind you, the best. People I’ve worked with who made $500K, $750K, or even $1M in commissions back at Siebel or Salesforce or Oracle. The best. We’re going to support those athletes with the best SCs we can find, and we’re going to create an inside sales and SDR team that is bar none, world-class. We’re going to set standard quotas and ramps and knock this sonofabitch out of the park. I’ve done this before, I’m matching the patterns, trust me, this is going to be great.
Translation: we’re going to hire somewhere between 4 and 8 salespeople who I have worked with in the past and who were successful in other companies regardless of whether they have expertise in our space, the skills required in our space, are located where out strategy indicates they should be. Oh, and since I know a great pharma rep, we’re going to make pharma a territory and even though he moved to Denver after living in New Jersey, we’ll just fly him out when we need to. Oh, and the SDRs, I know a great one in Boise and one in Austin. Yes, and the inside reps, Joe, Joey, Joey-The-Hacksaw was a killer back in the day and even though he’s always on his bass boat and living in Michigan now, we’re going to hire him even though technically speaking our inside reps are supposed to be in SF.
This, as they say in England, is a “dog’s breakfast” of a sales model. And when it doesn’t work — and the question is when, not if — what has the company learned? Precisely and absolutely zero.
If you’re a true optimist, you might say we’ve learned that a bunch of random decisions to hire old cronies scattered across the country with no regard for strategy, models, or hiring profiles, doesn’t work. But wait a minute — you knew that already; you didn’t need to spend $10M in VC to find out. (See my post, If We Can’t Have Repeatable Success Can We At Least Have Repeatable Failure?)
By making the model clear — and quite specific as in my example above — you can not only flush out any disagreements in advance, but you can also hold the sales VP accountable for building the model they say they are going to build. With a squishy model, as my other example shows, you can never actually know because it’s so vague you can’t tell.
This approach actually benefits both sides
The CEO benefits because he/she doesn’t get pushed around into agreeing to a vague model that he/she doesn’t understand. By focusing on specifics the CEO gets to think through the proposed model and decide whether he/she likes it.
The Sales VP benefits as well. While he/she loses some flexibility because hiring can’t be totally opportunistic, on the flip side, if the Sales VP implements the agreed-to model and it doesn’t work, he/she is not totally alone and to blame. It’s “we failed,” not “you failed.” Which might lead to a second chance for the sales VP to implement a new model.
“Well, he’s never been a sales development rep (SDR) manager before, but he has been an SDR for 3 years at another company. The chance to be a manager is why he’d come here.” — Famous Last Words
I can’t tell you the number of times I’ve heard something akin to the above in hiring processes.
Of course he’d come here to get the chance to be a manager. The question is why his current employer won’t make him one? They’re the ones who know him. They’re the ones who’ve worked with him for three years. What do they know that we don’t?
As a general rule, startups are not the place to learn how to do your job. At startups, you should hire people who already know how to do the job. Running the startup, in a high-growth, frenetic environment, is hard enough; you don’t need to be learning how to do your job at the same time. A key reason startups offer stock options is precisely this: to incent people who already know how to do the job to do it again by participating in the upside.
This is not to say, reductio ad absurdum, that startups should have no entry-level jobs, never take a bet on inexperienced people, and never promote anyone into management. That’s a recipe for losing your best people when they decide the company has no interest in their personal development or career path. The best startup teams are a mix of veterans and up-and-comers, but since — particular for management hires — you need to have a mix, you need to be very careful to whom you give that first-time in-the-job slot.
This is why I made the Star/Stranger Promotion Quadrant.
The two axes are simple: is the person a known star (at this company, i.e., do we all known her and do we all think she’s a star, here) and has the person done the job before (i.e., the actual job, SDR manager in this case, not SDR).
One of the easiest things you can do is to appoint known stars. This means the person works today at your company in a different role, but wants to do a new job that’s opened up, and has already done that exact job before. It doesn’t happen that often, but sometimes your director of product management has been director of product marketing before and wants to get back to it. Awesome. I call this “appointing” known stars because while the move may involve a titular promotion, in reality it’s more of an appointment than a promotion. It’s great to let people move around the organization and there should be no shame in ever wanting to move back to something that someone particularly likes doing (or that the company really needs). I shade this green because it’s low risk.
One of the nicest things you can do is to promote known stars. For example, take a top-performing SDR who has management potential (an elusive concept, I know, but a whole post unto itself) and give them the chance to run a piece of the SDR team. I prefer to do this — especially for first-time promotions into management — on a reversible basis. Since neither side is certain it’s going to work, I believe it’s best to make someone a “team lead” for six months and then assess how it’s going. If it’s going great, promote them to SDR manager and give them a raise. If it’s not going well, you haven’t burned the ships on making the person a regular SDR again, working on some skills, and trying again in the future. I shade this purple because there is some risk involved, but it’s a good risk to take. People in the organization want see others given the chance to succeed as well as to safely fail in taking on new challenges.
If you lack existing team members with management potential or if your current team has too many first-time (and too few experienced) managers, then your best move is to hire qualified strangers. While the stranger might want a career step-up, the reality is that most companies hire new people to do jobs they already know how to do. Cross-company promotions are rare and candidates offered them should be somewhat wary. Why again are these people willing to make me a CMO for the first time? Sometimes the reasons are good — e.g., you’ve been a divisional marketing VP at a larger company and move into a startup. Sometimes the reasons are bad. Think: why won’t any qualified CMO (who knows this space) take this job? But, moving back to the employer perspective, I shade this square purple because external hiring is always risky, but you can minimize that risk by hiring people who have done the job before.
This takes us back to the start of this post. While depending on the kindness of strangers may have worked for Blanche Dubois, as a hiring manager you should not be extending such kindness. Hiring qualified people is risky enough. New hires fail all the time — even when they are well qualified for job with lots of relevant prior experience. Don’t compound the risks of cultural fit, managerial relations, attitude/urgency, and a hundred other soft factors with the risk of not knowing how to do the job in question. What’s more, do you have time to teach one of your managers to do their job? Especially when what’s needed is teaching in basic management? As I often say, VCs are risk isolators more than risk takers, and hiring managers should think the same way. That’s why you should almost never promote strangers. (And, as a corollary why strangers should be wary of those willing to promote them.)
That’s why I’ve colored this square red. Companies should hire outsiders to do jobs that candidates already know how to do. Promotions are reserved for promising insiders.
Put differently, and from a career planning viewpoint: “rise up, jump across.”
I remember years and years ago attending a training class for job candidates on how to improve their interviewing skills. The crux of the course was this:
Most people are bad interviewers.
Since they don’t know what to ask, you need to tell them what they need to know regardless of what you’re asked.
What they need to know is the skills you possess, the duties you’ve performed, and the results you have accomplished.
I was reminded of this the other day when interviewing a very qualified candidate.
Me: “Think about the best manager you’ve ever worked for, and get a picture of him/her in your head. Do you have one?”
Candidate: “Yes.”
Me: “Now describe him or her.”
Candidate: “I like managers who are supportive to me and tough but fair.”
Me: “I’m sorry, perhaps you didn’t get the exercise. Do you have a favorite boss?”
Candidate: “Yes.”
Me: “I don’t need to know his/her name, but do you have a specific person in mind?”
Candidate: “Yes.”
Me: “Now, describe them, perhaps by using a list of adjectives.”
Candidate: “I like bosses who mentor me and teach me to do things better.”
Me (thinking): Penalty, Evasion, 15 yards. 1st and 25.
I almost cut off the interview right there. But I didn’t. Despite a repeated pattern of not answering my questions, I voted no-hire but didn’t veto the candidate because he did seem qualified. I discussed what happened with the hiring manager.
Me: “I would not hire that person. He is evasive and doesn’t answer questions.”
Hiring manager: “Maybe he didn’t answer because he didn’t know the right answer.”
Me: “There is no right answer, per se. I’m not trying to make the candidate describe you; I’m trying to get them to describe their best boss ever so I can do a comparison of that style with my perception of yours.”
Hiring manager: “I get it, but he obviously knows it’s a risky question so maybe he deliberately didn’t answer it.”
Me: “OK, go to talk to him and find out what happened.”
In the end, the hiring manager was right. The candidate didn’t want to give a clear answer to the question because he was worried it would backfire. And the core of that old training class sprung immediately back to mind “don’t answer the question they asked, tell them what they need to know regardless of what they ask.” Which, I believe, is the worst interview advice ever.
I ask questions. I ask them on purpose. I ask them for a reason. If you stonewall my efforts to interview you I will vote no — and I will often throw an outright veto on top.
It’s amazing how often I have to say it: answer the question. Job interviews are no exception. In fact, quite the opposite.
Don’t assume you’re smarter than the person interviewing you. Don’t play games. The purpose of my line of questioning was simple: “I wanted to figure out if I thought you could work with your hiring manager.” That’s a very important question — and one both sides should want to answer sooner not later. Don’t assume I’m an idiot and want you to describe the hiring manager. Assume I’m asking for a reason and even if you can’t figure out the reason or the “right” answer, answer the question.
I’m Dave Kellogg, advisor, director, consultant, angel investor, and blogger focused on enterprise software startups. I am an executive-in-residence (EIR) at Balderton Capital and principal of my own eponymous consulting business.
I bring an uncommon perspective to startup challenges having 10 years’ experience at each of the CEO, CMO, and independent director levels across 10+ companies ranging in size from zero to over $1B in revenues.
From 2012 to 2018, I was CEO of cloud EPM vendor Host Analytics, where we quintupled ARR while halving customer acquisition costs in a competitive market, ultimately selling the company in a private equity transaction.
Previously, I was SVP/GM of the $500M Service Cloud business at Salesforce; CEO of NoSQL database provider MarkLogic, which we grew from zero to $80M over 6 years; and CMO at Business Objects for nearly a decade as we grew from $30M to over $1B in revenues. I started my career in technical and product marketing positions at Ingres and Versant.
I love disruption, startups, and Silicon Valley and have had the pleasure of working in varied capacities with companies including Bluecore, FloQast, GainSight, Hex, MongoDB, Pigment, Recorded Future, and Tableau.
I currently serve on the boards of Cyber Guru (cybersecurity training), Jiminny (conversation intelligence), and Scoro (work management).
I previously served on the boards of Alation (data intelligence), Aster Data (big data), Granular (agtech), Nuxeo (content services), Profisee (MDM), and SMA Technologies (workload automation).
I periodically speak to strategy and entrepreneurship classes at the Haas School of Business (UC Berkeley) and Hautes Études Commerciales de Paris (HEC).
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