Secrets of Enterprise Sales for Startups
Entrepreneurs’ secrets of getting sale #1, building sales teams, and growing revenue
For this event we brought together a panel of experienced entrepreneurs and sales executives to bring us their stories and share their secrets of selling into the enterprise.
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First a quick definition. Enterprise selling focuses on businesses selling to business customers (B2B). Such sales typically represent higher-volume and/or higher-dollar sales potentials than selling to consumers (B2C). These sales involve building relationships and are often hard fought as you have to beat out the incumbent provider or demonstrate added value of a new product or service while wedging yourself into whatever budget the buyer has left.
We were also lucky to have Jeff Reid (aka @Hoyapreneur) as moderator.
Jeff and I go way back to when he was starting to get the entrepreneurship movement going at Georgetown and I was lucky enough to join him in those early stages. We put a couple awesome summits, pitch competitions, idea bounces, and a great speaker series. You can learn more about the Georgetown Entrepreneurship Initiative and Startup Hoyas here. Memories…
Back to the present…
Jeff — Who is the decision maker (DM) at your target customers?
Anjali — For us, there are no good leads and no bad leads. We pursue them all, gather the data, and ten look back. Our sales team is 8 right now.
Nik — Whoever has the money. Social is still new for many organizations. Upfront lead qualification is very important for us due to our team size. We utilize BANT (Budget, Authority, Needs, and Timeline) as a framework.
Sometimes telling someone “no, you aren’t ready for our product” flips a switch and they push to use us. So we say “ok, we’ll take your money.”
For outbound we have Sales Development Reps (SDRs) which have standard metrics and tools for how many emails and qualified leads you can generate. We have also seen more revenue through our channel partners recently. Our sales team is 5.
Andrew — Our sales team is between 48 and 60 depending on what you call sales. 60 is with Account Management included. Even our CEO is a sales guy.
We focus on the Ross model *— if you can reasonably predict revenue, you can back into what you have to do to get to that revenue.
The Decision Maker varies more for us. HR is a different animal. Often the department has a use-it-or-lose-it budget annually so you see a binge at the end of the year. We can offer enterprise-wide training system which is more IT or we can offer more bespoke content.
Jeff — Let’s talk about how you build your team and incentives.
Anjali — We do a trial system. A commission only boot camp.
We experiment and don’t want to judge off of experience only. One of our best salespeople is a guy who worked investment banking for 2 months and hated it. He killed it for us…
and then he left. But we’re all still friends and he advises us now. Great sales guy. I agree with Jason Lemkin* and Aaron Ross*. We use that and determine a guaranteed base, the salesperson must cover the base and burdern and then simple commission to accelerate sales.
Nik — we focus on each individual since we are a startup. Base, commission/bonus, and equity are the three levers.
Base and equity go hand in hand depending on the risk the employee wants to tak. Then build commision plan based on mutually agreed upon objectives.
We check in at 6 months and have a conversation on progress. Since we work with them to set goals, that conversation is easier. Always questions — Do you cap bonus or not? How aggressive do you want to be?
Jeff — Why cap the commissions/bonus?
Nik — we can’t go to a VC and say 50% of the cost of goes to this salesperson. There are other levers you can play with.
Andrew — Key is alignment. We have a robust SDR squad. Lead velocity is what we care about. Marketin automation contributions but focus on 2:1 SDR:AE. Our sales cycle is longer. We give the SDR a cut of the deal. Idea is not to generate lead velocity that doesn’t close. We also find you can’t have silos and need to align on end goals.
Eugene (ZocDoc) — How do you avoid sandbagging? With new products and unknown economics, how do you determine sustainable comp?
Andrew — Wages are sticky. Salespeople never want to get less comp. For new products, you need a variable that fluctuates on the performance that is high. They should make money if successful.
Nik — Little game theory. They claim I can do X and we mentally haircut it. New products — sales guy can be good but need confidence in new products. CEO is the first sales guy. You need to build a machine with repeatable sales processes. We have a low base but quickly commission up to cover base expectation.
Anjali — We lose sleep over bringing right value to investors. That’s why we look at the Lemkin* model. Think about the “why” for when sales are off. Were there bugs in that period?
Kevin (SplashThat) — we grew to five AEs and then worked back towards none. Now working to build our sales out again. Can you go through your model with SDRs and AEs?
Andrew — all about deal coverage. Thought around a lot of SDRs is a lot of conversations. We have a lot of outbound calling, which many think is antiquated but works well for our audience. They care about learning and development and tech and automation. Our SDRs may have 4–5 calls and emails that go on 2–3 months before it moves to selling. When it moves past “farming” they bring us in. We trust their judgement. If it happens to be a decision maker and it’s red hot, it could be faster. If the person you are talking to is transparent about their level of buying ability we can determine entry easily.
*The Aaron Ross and Jason Lemkin book referred to by the panelists: From Impossible to Inevitable — How Hyper-Growth Companies Create Predictable Revenue
If you have thoughts on this or otherwise want to start picking each other’s brains, please feel free to start a convo via @sthoward.
If you have questions about how I help growth companies via Current Consulting or if you’d like to get in touch with me about my work with Rubicon Venture Capital (open to both LP inquiries as well as startup introductions), please send me an email — I’m scott at hellocurrent dot com.
Interested in lessons from other events we’ve hosted? Try:
- Starting Up Media Relations for Startups — nuggest of wisdom to “avoid looking like an ass when pitching reporters” with Jason Del Rey (Senior Editor at Re/Code), Mike Isaac (Reporter at The New York Times), Alicianne Rand (VP of Marketing at NewsCred), Caitlyn Carpanzano (Head of PR at MicNews), and Elliot Tomaeno (Founder & CEO of ASTRSK PR).
- Put Your Money Where Your Mouth Is — the Business of Food with Benjamin McKean — Co-Founder & CEO of Hungryroot; former Co-Founder & CEO of Savored (acquired by Groupon), Philip David Crouse — CEO and Founder of Tiny Kitchen Brands and the brand Cup & Compass, Luke Holden — Founder and President of Luke’s Lobster, Co-Founder & Managing Partner at Cape Seafood LLC, and Brian Ballan — co-Founder of A&B American Style.
- Fashion Meets Startup: Panel + Trunk Show with Soraya Darabi (co-Founder of Zady and co-Founder Foodspotting — sold to OpenTable), Andrew Parietti (President and COO of Outdoor Voices, J. Crew Activewear partner), Zack Schwab (co-Founder of Givons Apparel), and Christina Lila Wilson (Founder of Modefy and Program Coordinator at New York Fashion Tech Lab)
Thanks to all who came and thank you for reading this!
If you are interested in attending similar future events — sign up here.