Why founders are the best salesmen their start-up needs?
This week’s post is about sales. Sales is critical to any business. If you don’t sell something, you don’t have a business. Unfortunately, this activity is massively misunderstood. For most people, sales people are impossibly charming, well connected, with perfect lines and incredible golf skills. Not really the archetype of a Silicon Valley geek, am i right?! Let’s move away from golf (elitist sport) and digress with a little soccer metaphor (the world’s most played sports).
Soccer 101
Life is like a box of chocolate… or a soccer game! During the course of a season, each team (company) will try to maximize the number of wins they get (profit). To win a game, you need to score more (sales) than your opponent (costs). Yes, making a sale is like scoring a goal.
Teams will organize themselves around their specific strengths. Some will build a very strong defense — to take the least number of goals: cost leaders, very thin margins (DollarShaveClub, Aldi). Others will favor the attack by being on the offensive (Groupon — sell as much as they can) or more creative (Apple). Though, in both configurations, forwards are the most celebrated players. As fancy as the soccer ball might be, it still needs a hand (i mean a foot) to score goals.
Forwards are the stars
Everybody wants to be Messi or Ronaldo. Forwards (salesmen) might just have to push the ball inside the empty cage — thanks to the teammates (marketing, design team etc.) who destabilized the opponent — they still get all the credit (and commissions). They get the media coverage, awards (the last 10 ballon d’or were given to offensive players) and the best salaries/contracts. They are said to be the most valuable players.
You don’t need to be a crack
So teams will battle over a few numbers of really talented players and offer them crazy contracts. “They are the one who makes the difference and i need them to be competitive!”. First, even Zlatan Ibrahimovic can’t score if nobody is there to put him in the best conditions (despite what he can say). More importantly, you don’t need to be a crack to be a great forward (salesman) — which is a great news because, as a starting venture, you don’t have the resources to hire those talents. A great forward needs to be good at two things: know where the ball is going (industry knowledge), and where to position her/himself so (s)he can take advantage of it (business strategy). Who better than the founder can do that?!
I’m not a soccer person!
Ok… I can’t believe i wrote all that for nothing! Basically, the idea behind the metaphor is that sales are critical. And as for all critical activities, founders should be involved for as long as possible. A lot of entrepreneurs think of sales as a secondary activity: build a great product and it will sell itself. If it doesn’t, i’ll just hire salespeople (read “professionals”). The reality is different. You need to listen to customers to build great products. And talking to customers is selling. Conclusion, you should lead the sales team. It is so important! Your passion, industry knowledge and vision is worth any sales experience.
Follow the (sales) funnel
To sell you need to 1/ identify who would even be interested in your product, 2/ talk to them and 3/close them.
- Prospecting. Yep, i dropped the p word. When innovating, your prospects are limited to the innovators (approximately 2.5% of the targeted population). It is definitely a number’s game: 100 contacts will yield 2.5 opportunities. Your time is worth more than that. Identifying cutting edge organizations (more willing to try new solutions), or where do your potential buyers meet (so you can meet hundreds of them at once) are good practice to speed up the process;
- Listening. Once you have their attention, make THEM talk (80% — 20%). The objective is to understand their problem better. Ask a lot of questions: why did they (finally) answer you, how do they currently address the problem you are solving etc;
- Closing. Whether it is a “go” or a “no go”, you need an answer as soon as possible. Time is your only resource as a startup. Maybes are going to kill you. If prospects are hesitant and ask for more features before buying your product, realize that it is a polite way to “pass”. Or make them sign a conditional agreement. Remember, your goal is to get paid users. Early on, you need commitment, validation and revenue. Avoid free trials (meaningless) and offer a 30 days cancellation period on annual contracts instead.
Five ways to build a $100,000,000 business
I don’t mean to call you names, but you are either an elephant (1,000 clients paying you $100k/year), a dear, a rabbit, a mice or a fly. You need to identify your category and make sure you scale your sales funnel accordingly (it will take a few in-person demos to sell a $100k solution, a quick video for a $100). Fly, mice and rabbits are mostly marketing based, while dear and elephant are more sales oriented.
Next visit to the zoo is scheduled for next week, so stay tuned…
