Today, the Internet is all a-fluster with the news that Yahoo had fired Henrique de Castro, COO and the executive in charge of ad sales. [Fortune] de Castro was a colleague of Marissa Mayer’s from their Google days and I won’t shed any tears for him as the rumor mill suggests that he’ll be collecting something north of $40 million in severance. You could make the argument that this is just another example of the faulty strategy of “getting the band back together”. The idea that a group of execs from one company can simply go across the street and recreate the same magic. Dave Kellogg has written a number of excellent posts related to this subject, and his work speaks much more elegantly than mine. [A fun taxonomy of Technology Executives, Veterans vs. Up-and-Comers in Startups] From all accounts, Mayer has done yeoman’s work in getting site traffic moving in the right direction at Yahoo. Alas, advertising dollars have continued to fall — and thus, heads must roll.
I don’t have a horse in this race, so I don’t really care about either Yahoo or de Castro. But here’s what I will say about this turn of events and how this relates to all of us in the middle market. Was de Castro the solution to declining ad revenues? No. Will another executive be able to turn the ship around? My answer is no. Why? Because I think that the market is saying that the product isn’t very good. Advertisers likely have little loyalty. If Yahoo is the right place to invest their ad dollars, then that’s where they are going to spend them. Customers clearly do not care that de Castro is a legendary ad-sales exec. He’s selling a product that they don’t want to buy. That’s the lesson in the lower middle market. It’s far too easy to just fire your VP of Sales and bring in a new exec to “turn sales around”. Sometimes that’s the right answer. I spent many years of my career as a Sales Engineer and I’ve had the good fortune to see dynamite sales professionals work their magic. So don’t label me a sales-hater, because I am not. A great sales rep can sell ice to eskimos, but they can’t sell really crappy ice to those same eskimos. If sales is suffering, then I would argue that the first step is to take a long, hard look at your product. You might have to scale back investing in sales while you shore up your product. That’s a tough decision to have to make, but it might be the right one. Sometimes you get blindsided by a new competitor, and sometimes you just underinvest in the product for such a long time that you fall behind. Heck, sometimes the market for your product just disappears (remember SkyTel?) I don’t believe for one minute that a new VP of Sales could have saved Microsoft’s Zune — do you?