Create a Culture of Prospecting in Your Startup

Hint: It’s really hard. And it ain’t cheap.

The Great Startup Whisperer Jason Lemkin has examined in depth the inbound vs. outbound sales model in a startup. I think this was a fantastic take from Jason, and it got me to thinking…what does it really take to build a sustainable, outbound sales organization?

When I think inbound vs. outbound, I really consolidate it down to this: Can you create enough demand through marketing to scale up a sales organization from $1-20 million in ARR? Or does your lead velocity rate simply not scale? If that is the case, then you need to go outbound. And that is probably going to be sales driven. (FYI: If your Head of Marketing can’t drive ANY lead velocity for your startup, then that is a problem in and of itself, and you need to break out a pinkslip and call a recruiter—I know some great ones btw).

Here is your challenge: Most sales people can’t coldcall. Or won’t. And the ones who are willing to do it usually ain’t no good. Sales people who can create ALL of their own pipeline from scratch AND close enough business to crush their number…those are Sales Unicorns. I know a few Sales Unicorns. Maybe 1 in 10,000 sales people fit the bill. And that is probably really generous. Bottom line: You really want your sales people selling as much as possible. If you could scale a team on people who can do both — then great. You can’t. So lets move on.

This is where someone starts telling you to build out an SDR (Sales Development Rep) organization. It sounds great. But most often your SDRs actually spend most of their time qualifying the few inbound leads that you do get. That is, in my estimation, a waste of money. I’d rather inbound leads go direct to the reps (i.e. lets get the precious few leads marketing does create and put them in our best peoples hands) and SDRs focus 100% on outbound sales development.

Once again you have a problem. Because remember that whole Unicorn theory above? Same thing applies. You really need to INVEST in an SDR program, with a competent leader who is training and ramping these younger SDRs on how to target an organization, define org charts, establish who the buyers and influencers are, and how to create what I call “cold deck demand”. It’s hard man. Trust me. The greatest builder of sales development teams I have ever seen is a guy by the name of Charles Lawson. Charles builds teams of unicorns. I refer to him as the “Bill Walsh of Silicon Valley Sales”. The people he hired and trained have gone onto great, great things in this industry. That said, Charles now is the Head of Sales for Egnyte and you probably can’t hire him. So sorry about that. ☺But if you want SDR done right, you should pay him to advise you on it

So where are we? If you want to aggressively go outbound, you need to invest in an outbound SDR model. And don’t shortshrimp it either. It is going to be expensive, and you are going to need someone to run it. Ideally, those SDRs will eventually groom into some of your best sales people in time. Oh, by the way, I forgot to mention: If you are hanging your hat on an outbound sales model, your average deal size better be high enough. I’d say about 25K in ACV, minimum. Minimum. If you are doing 4K deals on an outbound model…you are never going to get there.

Lastly, create internal visibility of your prospecting goals. At EchoSign we mapped out a list of 50 companies across multiple verticals that we felt moved the needle for our business. We won almost all of them. And it made all the difference in the world competitively. We executed so well because we mapped out and tapped into our relationship capital. Who do you know? Who do we know that knows them? It is ALWAYS the best and most direct path to your customer. If you are a 30 person startup, that ecosystem isn’t huge. But in it are not just your employees, but your investors, your partners, and others. When I was early at LinkedIn we did a webinar/podcast with a gentlemen named Shally Steckerl. Shally was essentially a corporate recruiting guru…so enterprise corporate recruiting teams looked to his guidance on what the new, disruptive technologies were. Shally was really our first major introduction into the corporate recruiting market, and it made a HUGE difference. So think about those industry or vertical thought leaders that you can partner with to help you.

So to sum it up: A) There aren’t enough Unicorns, meaning B) You need to invest in an outbound SDR program at the rep AND the leadership level, and C) Make your prospecting goals visible to the team and even the company. Make it fun. And D) Make sure you utilize your relationships. There is value in them. Trust me.