The Brutal Truth About Hiring, Firing, and Building World-Class Sales Orgs | Chad Peets

Quick Overview

Chad Peets, Managing Partner at Riverpoint Capital, strongly advocates for hiring salespeople who have experienced failure and possess high levels of grit, arguing that relying on candidates who have only succeeded in established environments leads to hiring B-players who lack the tenacity needed for startup growth.

Key Points: Peets prefers hiring sales leaders who have been fired or failed, citing that those who only succeeded in large companies do not possess the necessary grit for startup environments (0:02, 2:21). He emphasizes that sales is life and death in startups, contrasting this with larger companies where failure might be less immediately consequential (3:19). Peets looks for demonstrable evidence of grit, such as candidates who overcame significant adversity, like going through college without a safety net (2:16, 2:47). He specifically avoids candidates who only know how to sell to large companies or those who have only worked for large companies, as they lack experience in building from scratch (2:47, 2:50, 3:27). A key metric he uses to evaluate sales leaders is the attrition rate, noting that if a company has a high attrition rate (e.g., 25% turnover), it indicates a problem with either the hiring process or the culture (10:54, 11:28). Peets states his ideal scenario involves hiring a CRO who is prepared to fire half the sales reps if they are underperforming against aggressive targets, even if it means short-term disruption (8:07, 9:07). He shares a personal story of succeeding at a company where he was expected to achieve 104% of his quota, which was later revealed to be an unrealistic target, leading to the firing of 2% of the sales organization (4:23, 11:04).

Context: This segment of the 20VC podcast features an interview with Chad Peets, Managing Partner at Riverpoint Capital, focusing on his stringent and sometimes controversial philosophy regarding hiring and retaining world-class sales talent, particularly within the high-stakes, high-growth environment of startups.