The Importance Of Founder-led Sales For B2B SaaS Startups

Joe Jordan
Supernode Global.

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When founders take charge of building and communicating the sales narrative, reaching out to leads, helping potential customers trial the product and closing the sale, they are executing founder-led sales. In this article, we delve into the importance of founder-led sales to early stage B2B SaaS startups for reaching product-market fit and kickstarting growth.

Founder-led Sales and Product-Market Fit

The unique thing about founder-led sales is that you are building the sales process from scratch. As the founder, wearing many hats and doing things that don’t scale will help to guide you in defining the features you need to build, alongside identifying an audience that is likely to care and developing a business model which can monetise your innovation.

For early stage founder-led sales, you are still working it all out — a product you are still developing, a narrative you are building and a pitch that ties it together. Exploratory calls with potential customers will help you to figure this out by identifying what features your potential customers require, and whether your product can accommodate these features. By engaging in these information-gathering exercises, you will begin to really understand your customers’ pain points and where your product fits in to solve these problems.

During your exploratory calls, try to find answers to these questions:

  1. Does our product solve the issue for our customers?
  2. What features do we need to add to our product?
  3. What features do we prioritize adding to our product?
  4. Is this person the right person to be speaking with? If not, do I need to re-think who my target customers are?
  5. Is my narrative effective in explaining our value proposition?

Thinking about these questions on each call will help you to identify patterns. For example, if multiple prospects ask you to build the same feature, this will suggest not only what to build next, but also how you should prioritize. These exploratory calls will help you to build a product you are iterating through constant customer feedback. The gift you get from doing these exploratory calls yourself is finding out whether potential customers actually want your product.

You could even take this further, and have these calls ahead of building any features. At the really early stages, it’s about hearing what would-be customers are saying, and taking this back to your team building the product — even if this is just your co-founder.

“When we were struggling to get ahead in our early days, Paul Graham of Y Combinator gave us some brilliant advice. He said, ‘Don’t spend 18 months building any features first. Instead, spend just a week calling users. Tell them you’re already offering all these features, and see what happens.’ This week became the most depressing week in our lives. Out of the 500 people we called, maybe five were interested in using our service.” — Matt Robinson, Cofounder & Board Member, GoCardless.

Check out this customer interview script template provided by GitHub to help frame these pre-product questions.

Wear Many Hats To Help Build Your Sales Narrative

As the founder, you will know your product better than anyone else, and are best placed to build a narrative and communicate it effectively to potential customers. At its earliest stages, founder-led sales are as much about sales as they are about product, and therefore the same person — the founder — needs to be delivering the value proposition to potential customers and developing the product. For now, the founder needs to take a developing product, build a narrative around it, communicate it effectively and then iterate. This ensures that the feedback loop between potential customers, the value proposition and product is tight, which in turn accelerates your startup to PMF.

Delegating this to a salesperson is unlikely to work. Most salespeople are good at selling proven products but will struggle selling a product before it has reached PMF. It is the founder’s responsibility to craft the narrative and build the materials to impart on the salespeople you will eventually hire.

As you execute founder-led sales, it’s likely that your sales narrative will change as you learn more about your customers’ problems. This is fine, it’s an iterative process. But it’s important to have a rough idea of your sales narrative to start as you will use it to create sales artifacts such as email templates, sales-demo scripting and video content.

But how do I build and communicate a narrative around a product in its earliest stages?

As outlined by Peter Kazanjy, the “problem-solution-specifics” framework will help you to construct your narrative.

Steps:

  1. Uncover and articulate the problem you are solving.
  2. Identify the main person or group of people who spend most of their time working on the problem you are trying to solve.
  3. Understand the costs of the problem so you can calculate the ROI of your solution or the opportunity cost of not having your solution.
  4. Know how your customers solve the problem so you can convince them your solution is superior.
  5. Bake the underpinnings of change into your narrative — why has this opportunity opened up for your customer?
  6. Succinctly explain how your solution works.

To compliment your narrative, provide some proof your solution is better. This might be through a metric-based comparison or third-party validation such as testimonials, case studies and press.

There are a plethora of different sales materials to communicate your narrative. For early sales, focus on the basics: a deck for your sales presentations, email templates (cold and warm), phone scripts for prospecting, sales-demo scripting and video content.

💡 Speed is crucial at the early stages and it’s how you will win. The shorter the time period between you communicating the narrative and being rejected the better as it enables you to build something into your narrative that combats this rejection. This might be a new feature that supports the value proposition in some way. The less time it takes to build this new feature and communicate it in your narrative, the more success you will have in setting appointments. Production value is of course important, but not to the extent that it takes an age to incorporate a new exciting feature into your narrative.

Do Things That Don’t Scale

Paul Graham has popularised this concept with consumer products, but it applies in a B2B context too. When executing founder-led sales, don’t be overly concerned about scale and premature professionalisation; doing things that don’t scale will support early learnings.

Why?

In the earliest stages, founder-led sales is mostly an exercise in gathering information rather than generating revenue. Information you gain from unscalable activities should be used to inform product decisions and develop scalable sales processes. It will be a waste of time and resources to develop automated sales sequences before you find out why your customers are paying for your product. In the early stages you will continually iterate your sales process, so why automate it?

Even business models might not be scalable in the early days, but can help founders to execute sales early on. As Steve Blank talks about in his four steps to epiphany, startups search for business models whilst existing companies execute them. For example, when Carta launched eShares they were not a SaaS business, initially charging per certificate issue but after closing their first 2000 customers, they shifted to a subscription based model. They lost some customers in the process, but for the ones that stayed, they had developed a business model which monetised their innovation and accelerated the company along the path to PMF.

Such unscalable activities might include endless copying and pasting from tab to tab to fill your homemade sales CRM, onsite sales visits or manual implementations. Customer Success is about giving the customer the best possible experience. To retain customers, you may find yourself undertaking the unscalable activities below.

From Y Combinator: doing things that don’t scale

Kickstarting Growth With A Founder-led Approach

But if I have a self-serve product, why should I focus on founder-led sales early on? Whilst different growth strategies exist, founder-led sales will often kickstart growth for many B2B SaaS startups.

As outlined by Lenny Rachitsky, there are three main strategies for selling to your customer in the early stages:

  1. Founder-led sales: The founder is responsible for reaching out to leads they have identified and helps them to trial the product. Founders convert these leads and sign them up for a paid plan.
  2. Bottom-up + self-service: Users find out about your product and sign up for a free plan. These users love your product and pay for premium features.
  3. Bottom-up + inside sales: Users find out about your product and sign up for a free plan. These users love your product too BUT they are encouraged by a sales rep to upgrade and pay for premium features.

If your product is simple enough for self-serve, truly differentiated or can exist with an inferior competitor, then leveraging your product to drive growth through strategies 2 and 3 is a path the likes of Figma, Slack and Airtable will execute effectively.

However, consider that initially, most founders will kickstart growth through founder-led sales. Self-serve products require users to first find out about your product and so to drive growth in the early stages, founders will engage in 2 kickstarting mechanisms:

  1. Prospecting Activities: uncovering where their customers congregate online.
  2. Outreach Activities: tapping their personal network for potential customers.

Dylan Field, CEO of Figma, used both these mechanisms to kickstart growth.

“In the early days of Figma, we talked with practically every designer we knew. In search of more feedback, we turned to Twitter which I realized we could use to determine the most influential designers. After getting the data, I further filtered the list to people that were personally inspirational to me. Then I cold emailed / found introductions to many of these people and showed them Figma.” — Dylan Field, CEO.

When we look at how PLG driven companies like Slack and Airtable found their first customers, we see these mechanisms in action.

Slack

  • Product simple enough for self-serve.
  • Co-existed with an inferior incumbent as most early customers had Gmail and therefore Gchat.
  • Relied on a positive user experience to provide value to its early adopters which drove customer acquisition, retention and expansion.

The paragon for PLG is Slack. But how did Slack acquire their first users? The founders initially kicked off sales by tapping their personal network. They “begged and cajoled” friends at other companies to try the product out and give feedback. Stewart Butterfield (CEO) highlights that Slack found their first ten customers this way. The point here is that even the founders of one of the most successful companies to execute a PLG strategy will get the ball rolling by taking charge of sales.

Airtable

  • Incorporated templates and recipes into their product that their users could build upon without needing support.
  • Co-existed with an inferior incumbent as most customers still used excel.
  • Features enabled a product good and easy enough to use, but also powerful enough to drive adoption from the bottom-up.

Caveat the above with how initially the founder — Liu Howie — kickstarted growth with a founder-led approach.

It was friends and family first, then Howie posted the beta on Hacker News (which is how I found the product myself). After that, the biggest mechanism was word of mouth by *far*. Anonymous early employee

The key takeaway is that even founders of companies who have successfully executed product-led growth strategies will take charge of early sales through tapping their network and seeking out their customers online. When tapping your network, founders will look to friends, family, accelerator-mates and former colleagues for early customers.

💡 be careful not to target purely based on relationships. Tapping your network is most effective IF people in your network need your solution.

Shopify’s first few hundred customers were acquired from a waitlist list the founder had built from colleagues in the Ruby on Rails developer community. These were individuals who had expressed an interest in licensing the code from his online snowboard store🏂.

For Salesforce’s first client, Marc Benioff (CEO) called the founder of Blue Martini Software, a company he had invested in previously, because he “knew he was offering something that he really needed.” — Source.

Some final thoughts

Founders taking charge of sales learn not just about how to sell, but the link between potential customers, their value proposition and product. Through the founder-led sales process, you are fine-tuning the selling material (i.e., communication of the narrative) and even the product itself. Not only will executing founder-led sales enable your startup to win customers, it also allows for a process which can be packaged and re-used for a scalable sales process.

if you’d like to chat about anything you read here, you can contact me on joe@supernodeglobal.com.

Sources: Lenny’s Newsletter, Kracov, Founding Sales, Founder Led Selling Maturity Stages, Y Combinator, Techstars

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