Five steps to building your sales engine to sell to educational institutions

“If it was easy, everyone would do it.” — anonymous

I’ve spent much of my career as an entrepreneur and investor building companies that sell to educational institutions and advising entrepreneurs who sell to them. Selling to educational institutions is, if not the biggest, one of the biggest challenges to scaling an education startup. Educational institutions are often (not always) slower to adopt new technologies, especially as-of-yet unproven innovations from an emerging startup.

In the early stages of a startup, you need to find your very first customers. These first customers often come through prior relationships, through leaders at educational institutions who are willing to talk to you, or via initial meetings at trade shows or other events. At this stage, you’re looking less for the quantity of customers and more at the quality of the initial cohort that you’re signing up. You want to find customers who have the right set of expectations (not too high!), have a burning problem they’re motivated to address, and who can quickly get to a successful point with your product or service. Signing, onboarding, and successfully implementing these early customers sets the stage for a real business (with real revenues!) and future growth.

While these early activities — tapping into relationships in your network, asking for referrals, engaging local institutions, and meeting with school and district leaders at events — help you get off the ground with your very first customers for your product or service, there’s a finite number of them. It’s a rare business that can get to profitability and scale with these activities alone. For most startups, it’s necessary to reach beyond this relatively small group of contacts to reach scale.

So, what’s an entrepreneur to do with this challenge of reaching new, yet uncontacted customers at scale? Build a sales engine to sell to educational institutions. Here are five observations about how to go about building a sales engine for educational institutions.

  1. Begin by creating an initial cohort of early, successful customers on your own. 
     
     You might be tempted to hire some professional sales talent right off the bat, but let me make the case that those initial sales really need to come from you as a founder. 
     
     There’s no exact number of early, successful customers to start. In general, you need a core group of customers that are not only signed, but are onboarded and successfully using the product or service. Depending on your context, it could be 5–10 or perhaps a few dozen. What’s important is that you establish a successful, initial cohort in the same, closely referenced market. It’s one thing to have five customers onboard from five different markets (e.g., one customer each from independent schools, charter schools, traditional schools, community colleges, and four-year colleges, etc.) and another to have five customers onboard and successfully using the product from the same market (e.g., all five from traditional schools). 
     
     In the latter scenario, I’d argue that you’re in a stronger position to de-risk that first sales/marketing hire. Why? Because education markets are highly referenceable and, in general, the more referenceable customers you have in a market the easier it is to get the next one. I believe these customers need to be sold, onboarded, and implemented by you and your founding team because you’re selling vision (not track record) at the earliest stages. The founders (not hired talent) are best equipped to sell vision. Hired sales and marketing talent is very good at selling a successful track record, but not as good at selling the early vision in my experience. If the founder can’t sell the vision, how can we expect hired help to sell it? 
     
     You’ve also got to do the hard work of making the very first customers successful, which is best accomplished by the founding team. Once you establish a successful initial cohort of customers, these customers can serve as assets to the hired sales and marketing talent, so that they can sell track record and begin your scaling efforts. It’s certainly not a guarantee of success, but as an entrepreneur you’re in a much stronger position to get early traction, be more efficient with capital, and de-risk hiring talent if you follow these principles.
  2. Define the key milestones in your sales process and roles in the engine. 
     
     
    While you’re signing, onboarding, and implementing your very early customers you can begin figuring out the formula for your sales engine. This step is critical to help you de-risk those initial sales and marketing hires. Why? If you leave it up to a sales professional or two to figure out the recipe, you could get lucky and they will get it done, but chances are, they will struggle to figure out something that you, as founder, should have figured out. Not only are they likely to struggle, but you’ll burn through capital at a higher rate with your experienced-but-non-founding-team sales talent. 
     
     I learned this through firsthand experience. In one of my startup experiences, I made the mistake of hiring before we had a working sales formula (in our case, a core group of early, successful customers and a defined, repeatable sales process) and we failed. Wouldn’t it be better to figure this out yourself and then invest your hard-earned capital in talent that can help you refine and improve the process?
  3. Process is important, but hiring and developing the right talent is more important. 
     
     It’s been my observation over the last few years that there are some outstanding people in sales and marketing in education, but that overall there’s a shortage of talent. Finding the right sales and marketing talent is often the #1 issue that keeps entrepreneurs up at night as they work to grow their venture. Good people are out there, but it’s a very competitive market for top talent. A good process can leverage the talent you have on board, but an over-engineered process can stifle your talent and de-motivate them (I know, I’ve done it before). Talented sales people are creative problem solvers, so it’s important to leave room in the process to apply their creativity. Now, I’m not suggesting you take a “free range” approach to your sales talent. Instead, I suggest you establish a process and system that plays to the strengths of your team and respects the individuality of each member of the sales team. Again, I learned firsthand that establishing a process that doesn’t create enough room for salespeople to be creative will churn them out of your business.
  4. Consider using a free offering to fill the top of the funnel, but don’t make that your only offering. 
     
     The rise of freemium product offerings in education can’t be overlooked. As technology has made it easier to build and distribute free tools over the Internet, entrepreneurs are finding ways to create simple offerings that customers use for free and receive value. The product needs to be simple, intuitive, and backed by automated (not hands-on) support. This strategy can be an effective way to build a pool of users with whom you’re delivering value and building credibility and trust, but it’s very hard to do well. It’s even harder to do it well and figure out how to monetize customers at scale. That being said, I believe freemium has great potential when applied in the correct context in education to elevate venture growth. I prefer entrepreneurs who begin with an approach to monetization, figure that out, and then layer on a freemium offering as an accelerant to their growth.
  5. In selling to institutions, don’t forget digital marketing, but don’t fall in love with it too quickly either. 
     
     It’s rare that a day goes by that I don’t speak with an entrepreneur who explains to me how many prospects they’re going to reach via some combination of email marketing, online advertising, and social media. Many have tried and few have succeeded in scaling their B2B venture in education leading with digital marketing. I find that most B2B entrepreneurs who are successfully scaling in education do it with a combination of outbound calling (via SDRs and AEs), conferences, and other customer-focused events, referrals from successful customers, and partnerships with trade associations, education companies, and others. I’m seeing more freemium strategies working as well. Digital marketing is a valuable supplement to a growth plan, but don’t hang your hat on it.

What’s working for you in building a sales engine that scales your venture? I’d love your thoughts and comments.