Start-up Selling


This article is intended for folks who touch the sales process for young companies, like start-ups, that sell to the enterprise. It's for salespeople and those who manage and hire them. It’s written with the understanding that the price point of what you’re selling is closer to six figures than four. My personal experience is doing, and managing those doing, technology sales. That's across all models and offerings – software, pure services, or hardware, perpetual licenses or Saas, small ticket or giant deal, direct or channel. You name, I've done it. I believe this advice applies regardless.


"The reports of my death are greatly exaggerated" - Mark Twain

Yes, direct (large) enterprise selling has changed. But it’s not dead. Buyers are more savvy, and wary. Trends in things like open source make creating products easier. Lower costs usually mean lower prices. Saas models have demonstrated that organizations don’t need to make giant up front commitments. Some start-ups in fact have eschewed classic enterprise selling all together by focusing their products and sales on smaller ticket inside sales driven opportunities. Volume. Channel. "High Velocity." But don’t let this fool you. First, being world class at selling your own product is still essential. Understanding what’s driving the customer is required. And for many young companies, classic, bigger ticket, longer sales cycle deals are eventually necessary to achieve growth and revenue goals.
I started this intending to make three or four less than obvious, even non-intuitive, key points on one page about selling start-up solutions to enterprises. In that sense I failed. Because it grew. A lot. It leads one to greatly admire what a guy like Stephen Covey did by compressing overall effectiveness into seven eloquent steps. Frankly I’m an unapologetic rambler. Most of this is anecdotal or simply my opinion. But I believe most folks who sell will benefit from reviewing this advice. Enjoy, laugh at, or ignore at your discretion.

1. Product Matters
Like most of the points here this seems obvious on the surface, but let me explain. NOTHING else matters if you’re trying to sell a product that doesn’t address a pain point, drive revenue, or solve a problem (known or unknown). Of course, if the product simply doesn’t work (all too common with enterprise software in the past), that’s clearly bad as well. The point here is if you’re trying to sell something that just isn’t very sellable, then leave. The rest of what I say here simply won’t matter. And, you shouldn’t be figuring this out in your second week on the job. Talk to customers before you go to work somewhere. Early due diligence should prevent any major early surprises. Don’t be a doofus. When a company is still at the very earliest stages of learning where their product fits with first, or “beta,” customers, it's OK to disregard this point. Hard to sell is OK. Impossible to sell isn’t. Especially at a start-up, a little faith is healthy and necessary. Total blind faith isn’t.


2. Talent Matters

In the same way a salesperson isn’t going to change the product themselves, nobody is going to change the underlying ability of the salesperson. Improve Skills? Yes. Raise Talent? No. Of course things like experience and hard work count for a lot, but people can and will learn these. On the other hand, you don’t learn to be Robin Williams or Shaquille O'Neal. Some people are just born with certain talents. For sales, some key tell tale signs are: ability to build credibility quickly, ability to control or drive a conversation, natural curiosity, and persistence. You don’t see presentation skills listed there. It doesn’t hurt to be a great presenter, but it’s simply not essential. Very few sales people are asked to present to Congress. Most of the fun happens mano a mano.
A majority of the people who have “sales” somewhere on their business cards really don’t do much selling. By selling I mean driving action against a value focused conversation. Real Salespeople know how to do this. “Account Managers” don’t.
Selling for a young, unknown, company requires the ability to connect with someone quickly. Rapid rapport. With no Cisco or Oracle on your business card to do it for you, you have to build credibility quickly yourself. You need the guy across the table (or phone) to say something like, “this guy’s no bozo. He wouldn’t be working for this company unless there was something there. I’m going to pay attention (so he’s got me for at least the next 5 minutes).”
At the end of the day, I believe the number one attribute – by far – that great sales leaders have is the ability to attract and retain top talent.
If you’re hiring a salesperson, and you want the best (why wouldn’t you?), talent should be your number one criteria. Period.


3. Learning objectives

Great product pitches do not make great sales people, nor great sales results. Sure, it doesn’t hurt to have your elevator pitch down, but a far better indicator of sales progress is measuring key learning objectives. And a very nice byproduct is that people focused on learning ask and listen a lot more than talk.
In the right context I even like questions such as “why did you take this meeting?” In fact, “Why?” is a great question all by itself. Others include what happens if . . .? What do you do when . . .? What are key current internal initiatives (preferably related to what you’re selling)? What is your process?
Maybe the most important part of focusing on learning objectives is it allows you to understand what matters to your customer. It allows you to align your pitch to his needs. It allows you to sell value. Otherwise you’re really just hoping your key fits their lock. Unlikely.
Some have compared this step to a good doctor diagnosing a patient.


4. Earn the right

If you operate under the assumption that everything you ask or say, every minute you take, and eventually every dollar you request has to be EARNED first, you will be far less surprised as you progress through a sales cycle.
Questions can be a great way to build credibility while AT THE SAME TIME learning important information.
Asking questions like “what is your revenue” or “how many employees do you have” earn you the right to be called a time waster and are not the route to building credibility and rapport.


5. Be provocative early in the process. Differentiate yourself
Saying “I’m sure I can help you” in your first minute in front of someone is not provocative. It’s stupid.
Saying “We’ve helped three other customers that have a very similar profile to yours drive $X in benefit within the first six months of using our solution. I’d love to understand if you would benefit too,” should get some attention. But it takes some work to be able to say that with evidence and conviction.


6. Ideal Customer profile
Nope. “Everyone” is not an acceptable answer. Even Google has to qualify what an ideal customer is, a little. If you can’t get connected to the internet, running a Google search won’t be much help.
Marketing will usually push back on building this. Don’t let them. It’s more important than any white paper or press release. Frankly it doesn’t come natural to marketing because it requires asking lots of questions of customers and prospects. But a company MUST know its ideal customer. By this I mean not just what market the prospect is in or what systems they use. I mean things like how progressive is the individual? What other similar purchases have they made? What is the process for them to sign a deal? And lots more. Doesn’t mean you can’t sell to folks who don’t fall right in the middle of the sweet spot. But just know the farther out you get the lower your return on invested time. To know how far off target you are, you have to see the bull’s-eye.
Yes, you can take a stab at this even in the very earliest stages of the company. Yes, you can. You should. Nothing stops you from refining the profile.
Selling is not the right way to do key market research. Yes, let your sales folks help iterate; don’t use people you expect to drive revenue to figure out your market. That should already be done.

7. Qualify: If they’re going to say no, the sooner you find out the better.
Seems weird, but go for no. Sincerely hunt for the profile and pain you’ve learned to focus on. If it isn’t there, move on. Trust me; you will save yourself a lot of time and heartache.
There is admittedly a fine line here. A salesperson can’t be so picky that they qualify every opportunity out, but by the same token rarely does trying to be the hero with a long shot work out.
And, to qualify properly, you really need to have both clear learning objectives and an ideal customer profile.


8. Value: not features, not benefits. Maybe a little SPIN
Hackneyed as the phrase “selling value” has become, that doesn’t mean it’s properly practiced very often.
Value to the individual you’re selling to, not just the company, counts. Personal wins matter, too.
The value that matters is not what you say it is. It is quite simply what the customer tells you it is. Ask him. Pull it from him. At the end, this will help immensely, “remember, Mr Prospect, this isn’t a piece of technology you’re buying. This is key value you’ve proven through your validation effort with my company.”
The requirement to sell value increases directly, if not exponentially, as the price increases. If you’re happy selling at the $5K per deal route, you can disregard a good chunk of this advice.


9. Just because you can measure it, doesn’t mean you should

This one may not resonate on Sand Hill. VCs, I find, are about getting to that famous, “it’s all about execution now” point. Unfortunately, too many companies who are not even close to that point delude themselves, or are browbeat, into thinking they are. The consequences usually aren’t pretty.
More cold calls mean more business, right? More white papers mean more leads. More features mean more deals. More meetings mean more sales. More pipeline (I love this one) of course means healthier business. Not so much.
It’s not black and white, but in almost every case quality trumps quantity.
Measure quality. It’s more difficult, but measure that. Yes, even in sales.
Learning objectives can tell you about the quality of your pipeline
At the end of the day, revenue doesn’t lie. But be careful how easily you make correlations.


10. Get hard evidence success stories.
Get at least three great reference success stories now.
“Buy” them if you have to. I don’t mean bribe anyone; I mean invest in their success even if you lose money on that customer. Go MAKE the customer successful. However you need to.
Make sure the customer is happy.
Make sure the ROI is validated
You don’t even need to say the name of the company. It can be difficult to get that permission. It’s better if you can say who the customer is, of course, but hard evidence is more important than name dropping.
After the customer profile, this should be the number two goal of marketing. Notice press releases, white papers, and conferences keep falling down the list.


11. ROI process early.

How does your solution drive value? How would it be measured?
Yes, ROIs many times are based on flimsy data, but that doesn’t mean they aren’t useful. If you think about the kind of data you need to create a compelling ROI, even if you never end up building or using an ROI, and start a sales process with that mind set, you position yourself to learn the right information, qualify effectively, and negotiate from a position of strength.
ROIs many times are not necessary at the primary level you may be selling to, but usually are a potent weapon for selling internally to senior management.


12. Train the Champion.

Most selling happens when you’re not there. Read that again. It may take a couple of tries for it to sink in.
A favorite, if na├»ve, refrain of sales management is “get higher” or “get me a meeting with the SVP.” Fact is this is extremely hard to do, even if an admirable goal. It is also dependent on what you’re selling. Most likely, a large portion of the conversation with senior management about your product, solution, and price, will happen when you’re not in the room. Coach, and in fact test, your champion to make sure they really understand how to sell the value proposition. Help build the business case they will use.
Many times your champion won’t know the buying process and obstacles any better than you. The sooner you get her to find out the better.

 
13. There is no such thing as a sales cycle.
There are only buying cycles and buying processes. Sure you should have a keen understanding of the process you go through to start, manage and close a deal. But you better damn well understand how the customer buys. Frankly, case by case, that’s more important.
If you don’t understand how they buy, guess what? They’re probably not going to.
This is another case where the person you’re working with may not know. So you’ll need to learn with her. Help her figure it out.


14. Trial Balloon
Get your champion or key contact to, EARLY ON, float the notion to his management that he may be engaging with your company more intimately, and eventually MAY make a purchase decision with your company. Yes, lots of hurdles still need be crossed, but again, your key person may be surprised by what he hears. Great way to help qualify, understand key internal drivers, and otherwise jointly build a plan for getting the deal done.
This is not an easy one. Most lower level folks are hesitant to go to their bosses with this sort of request. But press. It helps your contact as much as you.


15. The power of no, and negotiation

Not actually just saying “no.” That is rarely diplomatic enough. But saying “yes, I can lower the price, what product/features/quantities should we remove?” is basically the same thing as no. Or, if you’ve established a value based selling process, then saying “why are we discussing a 20% discount when we’ve already proven - though the ROI we jointly built and POC that validated the technology and value - that we will be driving a 4 month payback?”
It’s OK to push back, if you’ve earned the right.


16. Contention in a sales process is good

I can only imagine that some folks reading this, at this point, are rolling their eyes while saying “d i n o s a u r.” But the fact is in bigger ticket sales, customers getting a little uncomfortable is actually a GOOD sign. A sign of progress.
Remember, selling a start-up solution, for more than a few thousand dollars, to a big company is by its very nature breaking the rules. Things simply are not designed for that to happen. The model is built for big companies to buy from big companies. Also remember, you’ve earned the right to ask to “go around” the normal process. You’ve earned the right force things a little.

Some other miscellaneous thoughts . . .
• Please stop kidding yourself. SFA like Salesforce.com is for management, and pipeline tracking, more than to help automate anything that salespeople actually have to do.
Helping salespeople manage selling is a byproduct of managing pipelines.
Companies would be well served to build SFA around helping salespeople first, management second. The ROI on the investment would be higher, and you would probably have enthusiastic users instead of reluctant ones.
• Cold calling is a necessary evil, even in today’s world of email and LinkedIn (and their cousins).
Learn how to do it well, but if most of your opportunities are coming from cold calling you simply can’t be successful
So, get warm introductions from current customers and even prospects, or anywhere you can.
This makes having an ideal customer profile all the more important and the building of a strong customer reference base key.
• Comp Plans are far more effective at attracting and retaining key talent than driving behavior.
Yes comp plans clearly impact behavior but they have a much greater impact on attracting and retaining talent. Ask yourself this: if you have a salesperson who is working on a large deal and you tell them their commission is going from say 8% to 10% - a quite substantial 25% jump - is that sales person all of a sudden going to start working a lot harder? “Oh, NOW I’m going to shift things into high gear!” I don’t think so. That’s just not how driven successful people think.
• Luck does matter
Getting a tad philosophical, luck matters. No, you can’t control it. No, that doesn’t mean being smart, working hard, listening, persisting and all those other virtues don’t matter, but sometimes the market is just ripe. Sometimes it isn’t. Sometimes you build something based purely on what your grandma told you and you hit a homerun. Sometimes you do everything right, but it still flops. I just think it’s worth emphasizing this. No one can control and manage all the variables. Just can’t. So focus on the places where you can both have the most impact, and that matter the most. Building the right product and selling to the right customer come to mind first.
• If your product is 100% “pull” well then you probably don’t need quality sales people or even processes. Just order takers. I defy you to show me a company doing this selling $50K + deals into medium and large enterprises.
Companies like Salesforce.com or SugarCRM or Atlassian, and countless more, have absolutely made pull a significant part of their process, and have been wildly successful because of it. But it’s simply not enough when selling to the enterprise. Real selling is required as you go up market. Importantly, what’s relevant for one to measure changes as the where and how you sell changes too.
• Yes, there are all kinds of other things that impact effective selling for a start-up. If your customer support sucks, eventually so will sales. If marketing can’t drive leads, you won’t be able to qualify like you need to. If the product group can’t figure out how to build reliable products, and products built to the needs expressed by customers, then you can’t sell value. But you can’t control this stuff. At least not directly.
Make sure you’re confident those other pieces are well managed (not perfect; they never are) before you even take the job.

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