What startup founders don’t know about sales
Updated: Feb 6, 2019
“Sales” is often an enigma to founders. Many founders, especially the technical types, think that sales is not part of their skillset and it is something that “others” are good at. Working with seed stage startup founders I often hear “I’ll focus on building the product and then I will hire someone to sell.” When forced to think about sales, founders often look for investors or advisors to introduce them to customers or help them hire a star salesman. Founders place great hopes on these magic intros or on that mysterious well-connected salespeople who will come, perform their persuasive art, and solve that sales thing.
If this is how you think about B2B sales, I have some bad news for you. Introductions to customers or star salesmen are nice but they are unlikely to help you grow your business sustainably. In fact, relying too much on these introductions can kill you. Let me explain why.
First, let’s demystify customer introductions. Sure, a warm intro to a large corporate is helpful and may help you get your foot in the door. However, if you haven’t done your sales homework, you may get a false sense of product-market fit and underestimate what it takes to win customers. One common situation I see with companies relying on intros is building a customized product for a high-potential customer and then being unable to sell this product to others. When, at some point, the introduction pipeline dries up, the founders realize that they never had the chance to build their own sales muscle. The very same investors who gave them these brilliant intros are now knocking at their doors demanding growth.
Now let’s look at the first sales hires. An intro to a superstar salesman is useful but not if you don’t know what kind of profile you are looking for and what this person should actually do. If you haven’t done much sales yourself, chances are that you don’t actually know that. There is no ideal “salesman” or “well-connected enterprise guy” without the context of your sales process. If you hire a sales rep, he or she will be selling to people she finds easiest to sell, effectively defining your customer base without any input from your side On top of that, sales people vary a lot in their skillsets – some are better at hunting, some at farming, some are better with certain types of customers or products. Being a top salesman in one company does not often transfer well to another company context. When you are relying on intros, you are making a double bet: on the introducer and on the sales person.
What do you do then?
Get your hands dirty and start doing sales yourself
You should start by actually selling yourself. You experiment, you learn, you iterate, and this will generate some best practices that you can then “institutionalize” and pass on to your new hires. A well-known a16z article on the topic says “sales starts with the founders”. They put it even more bluntly by saying that if you cannot sell your product, no one else will. Based on my experience working with early startup founders, these are the reasons why founders are actually better at sales than early sales hires:
Determination, passion, and knowledge: as a founder you know your product best, you are most invested into making it a success, and it shows. Many founders think that successful salespeople need to be Duracell bunny-like super-extraverted, super-charismatic, super-influential people with big smiles and nice suits. It is simply not true these days. Knowledge, determination, listening and ability to generate trust are more important, and this is where the founders have a natural advantage.
Credibility: people tend to trust the founders more than salespeople, it also gives them a sense of exclusivity. In fact, most customers would prefer buying from the founders or C-suite executives. As an early startup, you have this unique chance to offer the level of personal expert service that would simply be unfeasible to any company with a larger scale. That’s why doing things that don’t scale is actually a good strategy.
Faster feedback loop: this is perhaps the most important thing. In the beginning you need to be very-very close to your potential customers. Even if they are not your customers yet. Even if you don’t have the product or the product market fit yet. You should think about any interaction with a potential user as “sales”. Not in the way as to “convince them to buy” but in a way to understand what they are looking for, what problems they have, and what you can do to solve their problems. You are unlikely to get the same depth of insight if you “outsource” these interactions to any star salesman you could possibly hire.
Selling these days is not about sales pitches thrown at a customer, but about listening, doing deep customer need “discoveries”, and offering highly relevant solutions. When Airbnb co-founders flew to New York during their time at YC and knocked on people’s doors, they were selling. When Doordash talked to Chloe the macaroon store manager, they were selling. When you are talking to your users about the problems they face, it is part of your sales process. If you are asking yourself, “When do I start selling?”, the answer is, “Today”. To get some very concrete examples of how to get started, I highly recommend watching the video of Clever’s CEO Tyler Bosmeny where he gives examples of outreach e-mails and activities.
Start building a repeatable sales process
The only way to grow sustainably is to build a reliable sales process that will repeatedly generate and convert opportunities. It is like with everything in life — there is no magic pill, but there is the magic of hard and consistent work. Having worked with dozens of sales organizations of all sizes, I’ve seen that these are weakest ones that depend on a number of sales superstars or a number of super customers. When the company doesn’t have a great sales process, it has no choice but to rely on individual heroism to sell. A successful sales organization runs a well-oiled sales engine where everyone can perform at a high level. Sales reps get in, get onboarded and trained on the sales process and tools, get clear KPIs, and regular management coaching. When all sales elements are in place, individual heroism becomes unnecessary.
You will not have all of the elements of the sales engine in the beginning, but you should start building them now. Here are the core elements of the repeatable sales process that you should start from:
Define your target customers. You should be very clear about what customers you would like to attract and prioritize all your sales efforts towards them. Your target customers can and will change, but at any point in time you should know who you would like to attract the most.
Define the key stages of your sales process. Think about the decision making process that your target customers go through when thinking about the problem that you are trying to solve. Then define your sales stages that reflect that customer journey. For most companies, the stages will be something like this:
Prepare the basic sales and marketing materials. Do you have a clearly articulated value proposition that responds directly to customers’ pain points? Is it on your web-site, in your reach-out e-mails, in your pitches? What is the evidence you can use to give your target customers solid “reasons-to-believe” in your solution? Do you have big and loud calls-to-action on your web-site and in your e-mails?
Keep track of your activities. Yes, CRM. The typical advice is to start thinking about CRM when you are scaling the business and hiring the VP of sales who knows how to set it up. It may have been true in the past because CRM systems were expensive and needed months to be set up. It is still the case for larger organizations that require a lot of customization. But as a startup you have an easier option. You can use a simple tool like HubSpot CRM, which is free and gives enough standard functionality to get you started immediately.
Set KPIs and activity metrics. Once you get some data in your CRM, you will be able to understand your activity metrics much better. You’ll see where the strengths and weaknesses in your sales pipeline are, how many leads you need to convert at each stage, and what activities help you achieve that. This will allow you to set clear KPIs for yourself/the team and commit to executing them every day. Nobody said it was easy, but it does work.
Now, going back to the introductions. Once you have done your job selling and setting up the basics of the sales process, you are ready to ask your investors, advisors, and mentors for targeted introductions to specific customer types. You’ll see that 1) you get more and higher quality introductions, and 2) it becomes much easier to convert them. Make sure you use these introductions wisely, work hard on them, and use them as references or case studies for other potential customers. Make sure that you have multiple sources of leads and can generate introductions from the existing relationships.
You are also in a very good place now to ask for referrals to great salespeople as you now know what profiles to look for. You also have much better chances to attract that star sales person because you can show that you’ve “been there/done that” and have an informed opinion on the sales matter.
So, time to get up and start selling!
If you need help with anything described in this article, reach out to us! System2Labs is working with startups at all stages to help them set up repeatable scalable and profitable sales engines.
Note: the original article was was Publsihed at Hackernoon by System2Labs CEO, Marina Gurevich