The Rise of the Cleantech Chief Commercial Officer

The global smart grid market is expected to cumulatively surpass $400 billion worldwide by 2020, according to Greentech Media Research. That’s an average compound annual growth rate of over 8 percent. But, this growth is not happening five years from now, it’s happening today. Companies have been feeling it over the past two years. Along with this growth, this industry like other technology driven sectors, is starting to see the lines between marketing and sales blur as firms try to stay one step ahead of market shifts and fierce competitors.

Today, new opportunities require an integrated commercial approach and leadership roles that combine these activities are increasingly prevalent. More and more, CEO’s need a single point of contact on the commercial side. Someone who can manage innovation, product development, marketing, and sales. On a large scale, across all platforms, both digital and bricks-and-mortar. Thus, the typical Vice President of Sales position is starting to take a backseat to the rise of the Chief Commercial Officer and Chief Revenue Officer.

Smart grid companies like Vigilent and Varentec have utilized the CCO role to great effect in recent years. Most recently Enbala attracted Trent Bowers, away from Landis+Gyr. It’s a trend building in solar and energy storage markets as well, with CCO roles found at Yingli, Stem, Soligent, Next Tracker and Advanced Microgrid Solutions, to name a few.

CCO’s Fill in the Gaps

In a traditional sense, the VP of Sales role is about execution. A strong VP of Sales is deft at driving their team towards reaching preset targets, with predetermined customer audiences. These high-quality men and women know how to manage effective sales teams, support them with execution tactics, and step in at key points in the sales process to ensure deals close. Yet, in an early stage company, even the top talent in this field must often still depend on the CEO to design and define the go-to market strategy to begin with.

However, beyond commercialization, CEOs have many other responsibilities during this critical growth time, not the least of which is fundraising. CEOs can and do perform both responsibilities equally well; but dividing their attention between overseeing commercialization strategies and closing funding rounds can slow a company’s ability to grab market share before they hit the end of the runway. Thus, for many companies, a Chief Commercial or Revenue Officer can be the best kept secret of successful during early commercialization.

The CCO/CRO can take the weight of developing and implementing commercialization strategies, quarterbacking critical deals, and make strategic sales pivots to capture last minute opportunities. In a way, they are a bridge between the CEO’s commercialization vision and its execution in real-world situations, particularly in the absence of a Chief Operations Officer. Later, other positions, such as the VP of Sales, can be filled to assist the CCO/CRO in building out the strategy and implementing it as the company scales.

“Transforming into a high-functioning commercial organization requires a strategic vision for how sales, marketing, policy and product management come together in complete alignment with the voice of the customer,” said Stem CCO Karen Butterfield. “A successful CCO drives this alignment which facilitates the CEO’s focus on fundraising and market evangelizing during these high growth years of a company.”

Redefining the VP of Sales into the CCO/CRO

More and more emerging smart grid companies are realizing what Stem and other innovative companies have deduced, that taking full advantage of a late-stage startup’s growth years requires sales leadership that can orchestrate a variety of revenue generating operations that resonate with the customer.

It’s understandable that late-stage startups want commercial leadership who can quarterback a deal, call an audible on the field, and drive the opportunity all the way to the end zone. All while still keeping their eye on the big picture strategy that will get them into the playoffs. That’s why today they are looking for candidates who can re-calibrate sales teams to tackle new customer targets and challenges in real time. Additionally, companies want people who’ve worked on the client side at large corporations or utilities, or have stellar records selling to these customers.

Unfortunately, at the same time the majority of these companies are still labeling this role as a VP of Sales. This has them being passed over by candidates perfect for the job, but who are looking for something larger than just another VP of Sales role, and attracting those who just don’t measure up to the expanded requirements. Redefining the VP of Sales function into a Chief Commercial Officer can make the position more attractive to the ‘A players’ with the combination of product, sales, commercial, and regulatory experience, and those who’ve also already held VP of Sales roles.

The new CCO at Varentec is a perfect example. At the beginning of this year, they asked us to find them a stellar VP of Sales. Among the first round of candidates presented was Mehrdod Mohseni, then CEO at UISOL, an Alstom Grid Company. He had been on our radar as an impressively qualified candidate, and we knew he would move given the right opportunity.

Varentec agreed that he was perfect for ensuring they could meet their sales goals today, as well as four years from now. However, the VP of Sales position as it was defined, was too small to take advantage of all the operation and leadership expertise Mohseni could bring to the company. So, Varentec kept looking. After several more rounds of VP of Sales candidates, it became clear that the professional experience Mohseni could provide Varentec beyond execution was highly desirable and worth more consideration.

By hiring Mohseni in a C-Suite role that encompassed both operations, sales and marketing, Varentec was able to secure a stellar executive who could fill in the gaps they had, while also driving continued revenue growth. Additionally, in our view Mohseni’s background as a divisional CEO himself provided the company with a leader who could fill in the operational gaps that would normally fall under a COO as needed in the short term.

Practicalities in Timing and Compensation

Traditionally, companies wait until their commercial operation is more mature, (post Series C) to secure a CCO/CRO. However, the trend is growing to hire this strategic leader earlier, often during the Series B round. Establishing the CCO/CRO position early (in lieu of filling a VP of Sales) can set Series B companies up for greater success in the long run. CCOs/CROs can be more hands-on earlier in the company’s development and shape the short and long term commercial strategies, versus to only reacting to the immediate opportunities in front of them.

In the market today, we are seeing smart grid CCO and CRO salaries range from $230,000 to the high $285,000, with signing bonuses from $50,000 to over $150,000. Additionally, companies can sweeten the deal and secure in-demand candidates quickly by offering fully diluted equity, and additional bonuses. Which protects candidates from pending commissions they may lose by switching companies.

Recent Cleantech CCO/CRO Deals

Enertech CCO Table

For any technology, the market is constantly shifting to match the source of demand and gain a competitive edge, and hiring strategies are no different. In cleantech commercialization, from solar to grid edge, companies need to expand their lens to encompass a Chief Commercial or Chief Revenue Officer early. In doing so, they have the opportunity to optimize their team to take full advantage of their growth potential. At the same time, they can attract the ‘A Players’ who are hungry to take new companies to extraordinary heights. Placing a CCO/CRO at the Series B stage can be a bold move, and it’s one that pays dividends for the forward-thinking companies willing to be leaders in the market.