I was chatting with another entrepreneur about their business and how they are having difficulty raising capital. The entrepreneur is a brilliant technologist and has done a wonderful job bootstrapping their company. The team couldn’t seem to be able to get meetings so I took a look the deck and immediately saw what was wrong — no sales.
When asked about the lack of sales and revenue in the 3 year business, I heard a variety of reasons — “We have no money to market the product.” “ The product features need to be improved.” “ We need to release the next gen of the product.” “We don’t have a sales team” “We don’t have contacts”
I firmly believe that a significant part of the solution to every problem in a startup involves sales.
Got a buggy product? Sell some product, which generates profit, which enables you to hire great engineers.
Can’t raise money? Sell some product, show traction on the business, do a roadshow, and close the round.
No sales team? Go try to sell the product, get feedback, continue practice selling until you sold some product, then you know how to sell and you now have money to hire a sales team.
Culture problem? Increase your sales, create some space so that you aren’t struggling to make payroll each month, roll out new culture values and make some team investments.
Eating my own dogfood
This advice of “just focus on selling what you made” sounds obvious because it is obvious from the outside. But when you are in a startup business, the fog of war sets in and it is difficult to get a 30,000 foot view. I first had this experience at my first company, TrackR.
My cofounder and I were struggling and we were doing the always open convertible note financing which sucked. We would take in 25k or 10k or 5k at a time to fund our R&D for just a lil bit more until we made the better product which would cause retailers to love us and the business to take off like a rocket ship. (This sounded naive because we were. We really did think this) My cofounder met up with a startup veteran in town, Tooey from Procore, to pitch him and try to get $5k, $10k, or whatever we could get so that we could continue operations. We got no money from him but the advice of to stop development and start selling.
We had our long list of excuses and reasons that seemed plausible to us at the time but they were all bullshit looking back. We were scared to get rejected. We were scared to do something we had no idea how to do. We were scared to learn something new and try it out. But this push, got us to take a baby step in the sales direction and we launched our own selfstarter with a product concept we made called “Wallet Tracker”.
While the selfstarter didn’t go huge, it brought in $10k in a month and was equity free. That opened our eyes and we started to plan an Indiegogo campaign. I attended an event in LA where a speaker taught us how successful Indiegogo folks are marketing on the platform and it felt like my eyes opened to the world of marketing. I poured over marketing books and devoured “Predictably Irrational”. We launched Wallet Tracker on Indiegogo and that pushed the company into a new era. 1 year later we raised our first million dollar venture round.
While I know there is no silver bullet in business, focusing in on selling in startups is a great way to have the team hone in on meeting the customer requirements and really listening to the customer. So if you are struggling with your business, focus on sales & the customer exclusively for just 1 month. You’d be surprised by the results.