When to Hire (and Fire) Your First VP of SalesWhen to Hire (and Fire) Your First VP of SalesOr Why Up to 70% of First VP Sales Don’t Make it 12 Months

Jason M. Lemkin, Managing Director, Storm Ventures;

Past Founder/CEO – EchoSign / VP Web Business Services – Adobe

@jasonlk

Safe harborSafe harbor statement under the Private Securities Litigation Reform Act of 1995: This presentation may contain forward-looking statements that involve risks, uncertainties, and assumptions. If any such uncertainties materialize or if any of the assumptions proves incorrect, the results of salesforce.com, inc. could differ materially from the results expressed or implied by the forward-looking statements we make. All statements other than statements of historical fact could be deemed forward-looking, including any projections of product or service availability, subscriber growth, earnings, revenues, or other financial items and any statements regarding strategies or plans of management for future operations, statements of belief, any statements concerning new, planned, or upgraded services or technology developments and customer contracts or use of our services. The risks and uncertainties referred to above include – but are not limited to – risks associated with developing and delivering new functionality for our service, new products and services, our new business model, our past operating losses, possible fluctuations in our operating results and rate of growth, interruptions or delays in our Web hosting, breach of our security measures, the outcome of any litigation, risks associated with completed and any possible mergers and acquisitions, the immature market in which we operate, our relatively limited operating history, our ability to expand, retain, and motivate our employees and manage our growth, new releases of our service and successful customer deployment, our limited history reselling non-salesforce.com products, and utilization and selling to larger enterprise customers. Further information on potential factors that could affect the financial results of salesforce.com, inc. is included in our annual report on Form 10-K for the most recent fiscal year and in our quarterly report on Form 10-Q for the most recent fiscal quarter. These documents and others containing important disclosures are available on the SEC Filings section of the Investor Information section of our Web site. Any unreleased services or features referenced in this or other presentations, press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase our services should make the purchase decisions based upon features that are currently available. Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements.

Jason M. LemkinJason M. LemkinJason M. Lemkin,

Managing Director, Storm Ventures; Founder/CEO – EchoSign/Adobe;

SaaStr

@jasonlk

Jason M. Lemkin,

Managing Director, Storm Ventures; Founder/CEO – EchoSign/Adobe;

SaaStr

@jasonlk

Jason M. LemkinJason M. LemkinJason M. Lemkin,

Managing Director, Storm Ventures; Founder/CEO – EchoSign/Adobe;

SaaStr

@jasonlk

Jason M. Lemkin,

Managing Director, Storm Ventures; Founder/CEO – EchoSign/Adobe;

SaaStr

@jasonlk

The First “VP Sales” Probably Has to Be You

You Have to Sell It Yourself First. And Then Hire 2+ Reps.

You You + 2 Reps Hire VP Sales

Top 5 Things a SaaS VP of Sales Really Does

Note Which One Comes Last #1 Recruiting the Team

• You’re going to need a team, and a good one. Quickly.

• Player-Coach sounds great -- but at best, will be quickly obsolete as a role.

#2 Backfilling and Helping His/Her Sales Team

#3 Sales Tactics

#4 Sales Strategy

#5 Creating and Selling Deals Him/Herself

When to Make The Hire

Immediately - Once you Have a Repeatable Process

Before a repeatable process = exercise in frustration

But just as importantly – if you wait even one month

after you have Initial Traction – you are wasting time

Wasted time = wasted leads & lost 2nd order revenue,

delay in getting to Scale

Change Your Thinking: A Great VPS is Accretive

A mediocre VPS is a cost

center. Feels very expensive.

But a Great VPS is Accretive

Key: Great VPS Raises

Revenue Per Lead

Source: Boston Search Group 2011http://bit.ly/v2Sbgi

Ways Your VPS Will Increase Revenue Per Lead Ask. For the Most $$$ Per Lead.

Close. Closing is an Art – and a Science.

Hire. Better Than You.

Scale. More Reps Than You, More Quickly.

Position. Give Prospects Right Context.

Go Upmarket. Drive to Highest Practical Deal Size

Better. Great VPS Makes Your Product Better.

Fun. Great VPS Makes It Fun.

The Toughest Hire of All in SaaS When

• Too Early: Manager, Not a Magician

• Too Late: Can Take 20 Months!

Who• Been There, Done That – Almost Impossible

• Too “Heavy” a Hire? Or One Without the

Full Experience?

Why• To Take Things To the Next Level; To Scale

• But Usually NOT to Get Sales Going

The Toughest Hire of All in SaaSHire Wrong, and You’re Set Back a Year

A Bad Hire Can Be Far Worse Than No Hire at All – It’s True

A Bad Hire Isn’t Just Hard Costs – It Involves Huge Soft Costs As Well• A B-level VP Sales Hires a B-/C+ Team Under Him/Her

• Revenue Per Lead can actually go down dramatically under a mediocre VPS

• Wastes Precious Leads, Wastes Time, Loss of Second-Order Revenue

• You’ll Lose a Year – At the Worst Possible Time

A Bad Hire is Often Made Just as Things Are Taking Off• So Most Costly Time at All to Make a Mistake

The Toughest Hire of All in SaaSMy Year of Hell. But Then – Right VP Sales -> Reignition.

The Costs of a Bad Hire

Leads Doubled in Year of Hell

Yes, We Grew. But, Revenue

Per Lead Declined.

Whose Fault?

Your VPS is Also Feeding Second-Order RevenueWrong Hire = No Second Order Revenue, Not Just Suboptimal Sales That Year

How My (Real) VP Sales Doubled Sales in 90 Days

Hint: It Wasn’t New Prospects or Customers. Immediately Upgraded the Team to Proven Closers. The First

Week.

Got the Most Out of the Team He Inherited – And Got Rid of

the Ones That Weren’t Working.• 1 + 2 alone Doubled Our Revenue Per Lead.

He Didn’t Even Attempt to Do It Alone.

He Ended Pipeline as a Metric – And Any Real Credit for It.

He Embraced Competition.

Different Stages of VPS. Often, a Different Hire.

Hard to Get Stage Perfectly

Right in Early Days

Few Truly Scale Across > 1.5

Stages. Hence, Most SaaS

Cos. End Up with Multiple VPS

Key Screening for VPS

Sold at Next Year’s Target ACV – Controls

for a Lot of Variables

Sold at Next Revenue Stage (ARR)

Similar Competitive Selling Background

Outbound vs. Inbound Ratio

First 3 People You’d Bring With You

Less Important: Domain Expertise

How to Know If You’ve Made a Mistake

You Should Know Subjectively In Just a Few

Months – Just 50% of The Way Through Your

Average Sales Cycle

Numbers Should Increase in 1 Sales Cycle – with

Keen Focus on Revenue Per Lead

First Few Hires Should be Clear Upgrades – and

made quickly + seemingly effortlessly

So As Hard As It Is – You Can’t Settle

It May Be Tempting to Hire a Placeholder

VPS – especially if You Haven’t Done It

Before

But You’ll End Up With a Crummy Team, and

Lost Opportunities.

Start Early. Start Now.

When It’s Good – It’s Really Good

Great Sales Teams Have Low Turnover –

They Want to Stay Together

Great Sales Teams Feed on Themselves

Great Sales Teams Energize the Rest of the

Company

You Just Need a Great VPS

All about Jason M. Lemkin

2x Founder/CEO Selling to the Enterprise.

Managing Director, Storm Ventures.

Co-Founder/CEO EchoSign, acquired by Adobe, 2000+ 5-star reviews

on AppExchange

Grew business from $0-$100m+ ARR in ‘13 at EchoSign + Adobe

Managing Director at Storm Ventures: First/Early Investor in Enterprise

start-ups, including Marketo, MobileIron, EchoSign, Appcelerator, etc.

SaaStr social community – 400k+ views a month on web + Quora