Startup Sales
We’ve all been reading that the current tech period we’re in is more stable and less bubbly because the multiples are more concrete. Big companies like Facebook, LinkedIn, and Zynga have real, sustainable revenues to go along with their user growth and hype. Its a good sign for the longevity of the industry that along with disruptive products and innovative ideas, there is a focus on profitability as certain services and companies gain in popularity. I know this is a soft subject for many and I’m not coming at it from the angle of the ‘dark side’ business person hell-bent on the success of the bottom line. I’m approaching this as an entrepreneur whose concern is the continuity of the eco-system from which innovations are born and thrive. Along with platform traction, user adoption, and unique service value, the business factors of revenue discovery, established sales cycles, client retention, and pushes towards break-even and profitability are tangible signs of success that can help sustain companies, allowing entrepreneurs to wash, rinse, and repeat with even newer ideas.
Just as the products, designs, and infrastructure of a start-up company are built from scratch, with opportunities to brainstorm, pivot, leave one’s mark, and really drive towards something that matters, the sales process grows in parallel and more often than not overlaps with the growth of other aspects of the company. It's not simply making call after call about the same old offering; it's researching your market, identifying best opportunities, developing relationships, and finding out how and if your product or future version of your company can fit in and provide a value. Creativity abounds in pricing, vertical exploration, and, when APIs are involved, what your offering might actually look like.
Along the lines of the quote from Denis Crowley that Bryce Roberts re-blogged a few weeks ago about Foursquare’s first 100 users and their influence on early product direction at the company, the same applies to first revolutions of fee products, like an enterprise service. One customer is all you need - like first users - to help you establish price points, actually use your product and reflect on its worth. Think of these early adopters (whether immediately paying or on trial) as partners more than clients. Their feedback and their usage should inform direction as the product continues to develop, expand, improve. Their word of mouth will play a huge role in whether your paying product sinks or swims. Pay attention to them and be very cognizant of who you pursue as these initial 'clients’.
A clear advantage is that these initial users have your ear and you have theirs - where an individual user of free product might become dissatisfied and simply stop using it, a paying client will voice their concerns loud and clear until they feel their getting their money’s worth. More transparency into your clients wants and needs is a good thing, let their feedback influence prioritization for next development goals and even pricing. People are almost always happy to talk at length about what they don’t have and what they would like to have in terms of products; these conversations are gold mines for future development. Of course, no one wants to become a chop shop for different companies and different needs, that’s rarely scalable given the costs and unpredictable business model, but when you have one or two or three clients willing to pay for your service, you should take strides to ensure they're satisfied.
A few other topics that come to mind:
Biz Dev Vs. Sales: There’s a lot of discussion around the difference between business development and straight sales. Some defining characteristics are apparent: the lack of pricing in biz dev, the involvement of accounting teams for contract discussions in sales. But really, its just a difference in the deliverable, which in the tech space I see as either money or integration. Again, creativity emerges with how these two can overlap: a biz dev integration with a large partner can turn into a paying relationship after given milestones; paid partners might integrate much deeper across a platform without fees rising. There’s more of an outward symbiosis in biz dev and these relationships can become some of the more complex and powerful across an industry. The budding relationship between Foursquare and Groupon is an example of two hugely popular services combining their most inimitable aspects to potentially create a product more valuable than the sum of its very powerful parts. The possibilities with biz dev and sales are endless and the challenge, particularly for a popular company, is to seek out the relationships that create growth value.
Creating The Cycle: For a sales person, this can be as creative a process as brainstorming an idea for a new company. You’re one part anthropologist, one part detective, one part sales person, and one part reporter. You’re putting a face on your product, selling it as a game-changer, discovering the niche that it fits in, engaging with various employees around their needs and how your product can help, and more than anything explaining value. Over and over and over. The success of your cycle isn't necessarily a volume game, but more conversations inevitably lead to more conversions. As usual, hustle is key.
Sticky notes are a visual way to tracking your cycle, organize your leads, and show everyone that though you might not be coding, you are providing a value to the company. This is especially true of small companies, who aren’t yet ready for Salesforce to track the minutiae of each business email sent. Create a literal sales cycle on a wall in your office, with columns for different stages, groupings for paying clients and Biz Dev partners. Give each company an individual note. Move them as you make progress. As well as providing a clear organizational benefit, psychologically it reinforces accomplishment to move a sticky note into a paid or closed column.
Start-up sales are as much a blank canvas as the the start-up itself once was. Who knows what your ideal price point should be? What vertical will drool over your product? Or what if they buy it and never actually use it? So just dive into the canvas with sticky notes as your KPIs from 1 to break-even.