Research and Lead Generation

In a previous life, my team was responsible for Lead Management at Groupon as we oversaw 6M+ leads. This meant ranking, tagging, allocating and swapping leads amongst 800 sales reps covering 173 markets in North America, every day.

I made many mistakes along the way. In those errors, we learned a tremendous amount about how to build a process for generating targeted and quality leads that gave our salespeople the best chance to close deals.

We’ve since successfully applied these principles in dozens of companies. In this chapter of Bootstrapping Sales, it is our hope to pass along these processes to you.


Based on almost every interaction Danny and I have had with early stage founders, we have gotten the impression that most feel uncertain about how to proceed with their lead generation efforts.

To remove this tension and feeling of unease, we recommend you unpack lead generation into two distinct steps: 1/ Research and then 2/ Lead Generation.

Lead generation can sound like (and be) a big bad scary wolf if you haven’t done your homework, i.e. research. Lack of research leads to poor quality leads which in turn affect your close rate and frustrate the bejesus out of you and your team.

Before starting to generate leads you must have a robust understanding of:

1. Why you’re doing what you’re doing;

2. Who you’re doing this for;

3. What you’re doing for this individual and organization.

Whether you’re bootstrapping or scaling sales, put emphasis on quality versus quantity of leads. The upfront time you invest into research (What and Who) will yield dividends down the road.


Some folks think there is no real formula for closing deals. They’re wrong, and it’s a pretty simple formula:

Closed deals = number of leads X your conversion rate.

This simple formula, though, is difficult to perfect, and the hardest part: when bootstrapping, you must close to stay alive.

We previously recommended that you start by assuming a conversion rate no better than 1.5%, and that’s true until you collect enough data points on your sales efforts that you exceed your baseline assumption. If you don’t then you’ll need to revisit your pitch, channel/persona and/or product.

But what about leads? Where do the damn leads come from?

Your scalable lead channels come from your marketing team and/or your sales team.

In an ideal world, you’d have a kick ass marketing engine (read: expensive) and an army of Sales Development Representatives, aka SDR’s (read: headcount).

Your marketing team invests time and resources in writing relevant content for SEO, has the budget to go to conferences, and $10k+/month for paid ads on Google, Bing, FB, Pinterest, IG and the right side of Mike Tyson’s face for a promotional tattoo of your company’s logo.

At the same time, your SDR’s contact an average of 75 businesses/day to hunt and dis/qualify prospects to pass on to your Account Executives (AE’s) who will demo and close deals.

When bootstrapping, there just isn’t time for 39 blog posts per week, no budget for ads, and certainly no resources for conferences. So what do you do?

You. Must. Dig. Deep. Hustle. Grind. For. Your. Own. Leads.

Below are the key components to how you will bootstrap your Lead Generation campaign.

Research

You may have started your business because you experienced a pain point yourself or saw the pain on someone else’s face in the market that gave you the inspiration for starting your company. Or maybe you started it because you were sick and tired of working for other people and wanted to be your own boss.

Your reason for starting your business is your Why but to successfully sell you must have a thorough understanding of your What and your Who:

1. What pain point/s, specifically, are you solving?

2. Who, exactly, are you helping?

The more precise you are about your What and Who during your research phase, the more targeted your lead generation efforts will be in the end.

For example:

1. Does your software help CEOs and COOs (Who) of enterprise businesses with over $100M in annual revenue optimize their pricing strategy (What)?

2. Does your platform (What) help designers (Who) sell their designs on custom-made apparel?

3. Does your software help CTOs and VPs of Engineering (Who) at ecommerce companies optimize the cost of parcel shipping on a per shipment basis (What)?

4. Does your software enable University Professors and Ph.D. candidates (Who) to conduct qualitative and quantitative surveys (What)?

We believe there are three key tenets in customer research:

1) Customer Development

Best case scenario, you’re providing water to the thirsty not soda to the person who isn’t thirsty and doesn’t like sugary drinks.

So when thinking about your first few customers, think about whose pain you will immediately alleviate. Mainly:

1. Do you, in fact, solve your customers’ problems?

Are you “oxygen”, i.e. vital, to what they do or are you “vitamins”, i.e. nice-to-haves, or are you “other”?
If “other”, you should have an honest conversation with yourself about whether this business is actually a worthwhile endeavor or not.

2. Will your customers pay you a sum greater than what it costs you to make and sell your solution to solve their problem?

Keep in mind that at this discovery/customer development stage, you’re not selling to anyone. The goal of your outreach to potential future customers is to seek a dialog, ask questions and learn.

2) Customer Persona

This is the Who we talked about earlier.

Don’t forget, ever, that you’re reaching out and selling to a fellow human being. The person you’re trying to reach has her own ambitions and fears, opportunities and risks.

Learn what role your customer plays within their organization. Map out how she goes about her day now. Where are the bottlenecks in her current process that you help unblock?

This information is critical in understanding your customer so your messaging resonates with them.

In a Fortune 500 company, this persona looks like the jargon you’d expect. We’re not suggesting you build that persona, but it does need to be well thought out.

3) Market Selection

Segment your market into three categories:

1. Is your product or service being sold to an existing market?

E.g. is your product a better/faster CRM?

2. Are you carving out and focusing in on a niche segment of a larger existing market?

E.g. does your software unbundle a service within an existing market dominant player like FedEx?

3. Are you creating a new market?

E.g. (hyper)local group coupons

Self-identifying which of these segments you fit in will play an important role in the messaging you’ll craft to identify yourself to the market.

Additionally, these questions should help you zoom in on where the budget comes from in the organization you hope to sell to. That is, are you asking your prospect to re-allocate money already budgeted for advertising from a vendor to you or are you asking the organization to spend money on a product or service category they are not currently spending money on?

Lead Generation

That was tough, but now comes the fun and easy part: generating leads!

The following five tips will get you going:

1) What information to get

This basic template for a CRM can serve as a guide for collecting the necessary information.

2) How to get the information

Groupon’s early sales reps were calling businesses straight out of the phone book. The Lead Generation team, Merchant Research team, and a robust CRM with SFDC admins came along much, much, later.

Don’t overwhelm yourself with the thought of needing to amass 6M+ leads right out of the gates. Set an achievable initial target and start working on generating those leads.

For example:

  • Sell software to Hair Salons and want to start with Atlanta because that’s where you live? Search on Yelp. Boom. You’ve got a list of 40 leads right in front of you.
  • Have a mobile dev agency and looking for companies to offer your services to? Head to AngelList and look for Mobile Commerce companies hiring right now. 576 leads. Go!
  • Sell software to Registered Investment Advisors (RIAs)? Go to LinkedIn and you’ll see 5,123 results for RIAs. You can even sort by proximity to connections, geography, etc.

Depending on your type of business, BuiltWith, Datanyze and G2 Crowd may also serve as good sources for conducting research.

3) How many is enough

The actual number of leads you need to contact will depend on your average deal size, your sales cycle, and your burn rate. Put another way, how many deals do you have to close per month to reach at least break even?

Take that number and divide it by 1.5%, your baseline conversation rate. Voila. That’s the number of leads you need to contact every month.

We like to aim for a 20% reply rate so that we give ourselves a realistic shot at closing the necessary number of deals. #ymmv

4) How to scale (cheaply)

We’ll cover tools of the trade in another chapter but if you have a few extra monies lying around in the old shoe box, it may be worth your time to look into Upwork, Mechanical Turk or Clearbit to help you with basic research and data entry.

If you happen to have a few more shoe boxes of money, then LeadGenius can also be a good resource.

5) Pitfalls of buying lists

Don’t do it! They’re mostly crap. At best, a quarter of the leads will have half correct information. Folks switch jobs; lists do not update. Imperfect information make Bootstrapping Sales go crazy.

When in doubt, do your own research and make your own list. It will be much more targeted. Trust us on this one.


The processes, frameworks, and tools above will give you a leg up on launching your customer research and lead generation initiative. The top of the sales funnel is not always fun, it’s not always glamorous, and it’s certainly not always cheap. Go forth and nail it! It’s critical to your sales process. Full stop.


We appreciate any and all feedback so please don’t hesitate to give us a shout.

And as always, contact Danny for help bootstrapping or scaling sales and Nima if you’ve been bootstrapping and now considering raising capital.