Startup School 4: Sales. You mean I actually have to call people?
Kiteline Health has closed its doors. This is a series exploring what I’ve learnt over the past three years as CEO. Kiteline provided B2B2C health coaching to people with long-term health conditions, helping them improve their lifestyle habits and increase longevity.
Before starting Kiteline, I had never sold a thing in my life. Ok, that’s not entirely true — I used to work as a rickshaw runner in Ottawa’s Byward market for a summer during uni and had to pester people on the street to get them to take a ride or I wouldn’t make a penny. I wasn’t great at it, I didn’t have the “gift of the gab” like some of the other runners, and I think that experience left a mark on my psyche that made me believe I wasn’t good at sales.
I have since realised that throughout my career, I’ve actually done lots of non-sales sales… called influencing. As an Investment Director at Big Society Capital, I prepared and pitched deals all the time to our Investment Committee. I created Fair by Design, a campaign and venture fund to end the poverty premium in the UK, by influencing CEOs of foundations and other important people to get behind what we were doing. To the nervous founder, “sales” experience can come in many shapes and sizes.
Getting to grip with your role within sales is one of the hardest yet most important jobs of a founder. It is literally the definition of business — selling a product or service in exchange for payment. So if you’re starting a business, you better get comfortable with it real quick.
Founder-led sales
When we started, I knew how important sales was I just hadn’t quite realised it was 100% my job to execute and that as a CEO founder, I was expected to bring in all the early sales. I naively thought that a) the product would sell itself because it’s so needed, and b) we’d hire a sales person to do all the work for us.
To the first point, the product should sort of sell itself once you’ve found that elusive Product-Market fit (“it’s flying off the shelves!”), but even then I’ve learnt that succeeding at sales requires a lot of systematic and consistent effort. Once you know how to sell your product, it becomes a numbers game — reaching as many people as possible, as quickly as possible.
To the second point, hiring a salesperson is only worth doing once you know “what works”. What does that mean? It means you know exactly who your target market is, what your Ideal Customer Profile (ICP) is (who is buying from you, and their defining characteristics — beyond simply demographics), what their biggest pain points are, how your product solves those points uniquely, and how best to talk about your product. That is not a short list of things to figure out!
We hired a business development associate to help us with sales about a year in, but had to let her go after five months as she didn’t book a single meeting. This was our fault because we hadn’t yet worked out who to target and how to sell to them, and also for not hiring the right profile of person.
(Incidentally, as a first-time founder I also thought marketing and sales were one and the same (I know, don’t come for me!), a flaw in my thinking that my CMO quickly rectified. Marketing is demand generation — one (essential) part of an overall Go-To-Market strategy that will also include elements like target market definition, pricing, sales process, customer buying journey, sales activities, forecasting, sales hiring, etc.)
Improving your sales function
One resource I found super helpful was Sales Impact Academy, which runs online sales courses for tech businesses. I got gifted an intro course and somehow my account converted to giving me access to all their courses so I went through about 6 or 7 of them (shh!). They were really useful, and opened my eyes to how structured, organised and persistent a sales function needs to be to deliver results.
A useful framework introduced on the first course I did is BICEP. It helps founders diagnose problems in their go-to-market functions:
- B: What steps does your buyer go on before you get involved?
- I: ICP — if you could only touch 100 prospects, who are they?
- C: Why are you mission critical? (a painkiller, not a vitamin)
- E: How will the unit economics trend over the next 12 months (e.g. Customer Acquisition Cost (CAC) & CAC Recovery, Lifetime Value, Sales Velocity, etc.)?
- P: What is the paradigm shift that gives your product its context? (i.e. why should your customer buy you now?)
As for practical advice: notice what you say on sales calls that resonates and gets people to say “oh that’s interesting, I hadn’t thought about it that way before”. Record and review your calls if you can. Tightly define your ICP and test your assumptions by reaching out to people who fit that description for coffees and no-sales chats to understand their real pain points. Craft your script around the words they use.
Winning cold business (i.e. learning to ignore being ghosted)
Our first few contracts came from personal contacts — booking meetings with my old employers and talking them through what we were working on. Most were willing to try us out, and had staff who could really use our service. We got a few early deals quickly because of these calls and we were feeling good about what we were offering.
But winning over totally cold business is a different kettle of fish. Getting someone who doesn’t know you, what you stand for, or what you do to give you some of their time is HARD. This is where process and CRM (Customer Relationship Management) shine.
Outbound sales is consistently the best signal for validating your idea (versus friends using your product, incubator batch-mates, or investor leads) — Lenny Rachitsky (Aug 2023)
Strategy A — cold LinkedIn outreach. We got some early wins from cold LinkedIn outreach — but that turned out to be hard to replicate as two founders with no sales experience doing half a job each on outreach alongside the million other jobs to be done (i.e. like building a product!). We just weren’t reaching anywhere near the number of people we needed to.
Strategy B — conferences. We tried a different tack and attended a number of conferences which initially delivered lots of contacts but converting leads proved quite difficult. To follow-up with people whose badges we scanned, I did a fair few cold calls which was nerve-wracking but also not as horrendous as I’d imagined. The most frustrating thing for me was the very enthusiastic prospects who gladly gave you their contact details (or even worse — reached out to you in the first place!), never to be heard from again. I don’t think I’ve ever gotten ghosted so much in my life. I’m still not over it.
Strategy C — recommendations. Multiple advisors told us the best thing to try would be to ask for recommendations from existing clients. We did this, but only managed to sell cheap one-off webinars to our clients’ contacts. I think that was more a factor of the sector they were in (Housing Associations) who typically don’t have much budget to spare.
Strategy D — warm introductions. This was one strategy we were unable to fully implement. We needed an advisor with networks to make introductions for us into our ICP targets (i.e. HR or Wellbeing Heads of corporates) and we never managed to close an agreement with anyone good enough.
Process, process, process, CRM. Boring but essential
It took us a long time to learn how to run a sales process properly. At first it was all run out of our heads, and Google Sheets. We didn’t know the difference between qualified leads and basically anyone we were talking to.
We initially went with Bigin by Zoho as a starter CRM about a year in. Even though we were paying monthly (do not do this!), it was not intuitive and nor easy to use.
It was only when we later got a great tactical sales advisor introduced by our investors at SFC Capital did we make the switch to the free tier of HubSpot and actually managed to understand exactly where we stood on all our prospects. It took a LOT of my time to make the switch, with a lot of manual data entry, but it was worth it. All of a sudden our pipeline was visible and gave us all the information we needed at a glance. (N.B. for other founders considering CRMs, a criticism of HubSpot is that the costs escalate at a later stage, but we never got there so can’t comment on that)
We also instituted weekly sales pipeline review meetings, as well as current client review meetings, ensuring that one of myself or Christine had all next steps covered.
Reality bites
The story goes that we failed to convert our pipeline. We had a truly amazing pipeline with companies like BCG, Charlotte Tilbury, and His Majesty’s Land Registry on there. And not only that, our key contacts were the right people and they LOVED what we did and what we stood for. The war and cost of living crisis hit, and our targets had their budgets slashed. If we had been able to build a deeper pipeline with more companies earlier on, we may have been able to weather the storm organically.
This is my cautionary tale to founders to go hard on sales as early as possible or risk the sinking of the ship.
Read Startup School 1: Product here.
Read Startup School 2: People here.
Read Startup School 3: Luck here.
Read Startup School 5: USP here.
Read Startup School 6: Funding here.
