A startup CEO I work with – a brilliant technologist and a geek in the strongest sense of the word – recently lamented to me, “Why can’t sales have a formula?” The question highlighted the basic struggle that many tech entrepreneurs go through, especially in the very early – and vulnerable – stages of their startup ventures: how to reduce the art of sales to an exact science with predictable and repeatable results. Before you get too excited, I’m not about to reveal some magic formula in this column. But I am going to share some of the insights I’ve gained over the years to help you optimize the input/output ratio in your sales efforts.
Fear of Selling
There’s a fear of sales that most tech entrepreneurs will admit to. They will deal with it by avoiding thinking about it, by speaking disdainfully about it, and by taking the position that their product is insanely great and should sell itself.
The truth, sadly, is that no matter how good the product, it still has to be SOLD. The reason is simple: buyers out there are not looking for you or your insanely great product. The less time and effort you spend today on actively selling your product or offering, the longer it’s going to take you to achieve success.
An approach to allocating effort and resources to sales
There are two basic ways for a startup CEO to approach sales:
- Hire a sales team
- Do it yourself
The approach you take will depend on what stage your company is in. If you’re just starting off – perhaps raised some angel money – and started building out and validating your offering, the answer is clear: DIY. There is no substitute to gaining that sales experience yourself, and here is why:
- If you can’t sell your own product, don’t expect someone else to
- If you don’t understand why your product sells or doesn’t, you will never be able to understand your customer’s needs
- Investors will value the well-rounded insight of a Founder/CEO who has “carried a bag” and will be willing to put money into the company
- Employees will respect you more if you have really been in the “trenches” with them
Where do you begin, and how do you allocate your time and effort? There’s only one generic answer: start everywhere, try everything, and reach out to everyone.
In case that sounds like boiling the ocean, it really isn’t. Your world is a relatively finite set of touch points with people, places, and things. Start there, and through the network effect, you will eventually land a contact that will lead to a sale.
I’m not suggesting the process is going to be easy or fun. No one loves cold calling, and you will often be confronted with doubt about whether you are spending your time well (instead of, let’s say, building that cool new feature that you think your product needs). There’s no getting around it. It’s lonely, frightening, and unavoidable. But it will produce results. The only thing somewhat out of your control is the timing of the results.
Sometimes, you may be targeting a market you have no experience with or have no connections in. In this unlikely scenario, you may want to bring a sales person from that industry on board. However, you have to be very clear about what you expect this person to do and the specific role you’re going to offer to him or her. My experience is that early stage startup CEO’s often lack the maturity to manage a seasoned sales person, both professionally and personally. In extreme cases, they hire a sales person essentially to buy the sales person’s “rolodex”. These are wrong reasons to go out and hire a sales guy or gal. This will inevitably end up in mismatched expectations, poor outcomes, and possibly a bitter divorce.
Building on momentum: optimizing the sales effort
Hopefully, I have convinced you that in early stages, you are your own best sales person. Let’s say you have walked on fire and come out the other end with a few good deals in your pocket and some positive sales momentum. Now it’s time to go back to being CEO, because now the company needs you to spend your time building out the product, raising more capital, and keeping the sales engine running. This means you start thinking about building out a sales force. You will soon need to institute sales management processes, implement a CRM system, and hire a sales team.
I keenly follow the writings of my mentor from my Alma Mater, Prabha Sinha, a Chicago native who has built a hugely successful business around sales consulting. He has also written a series of very insightful articles and blogs on a wide range of topics related to sales: assessing sales potential, sales territory allocations, sales hiring, and so on. Based on his advice and my own experience as a technology sales executive, the following sales tips are important for a growth stage CEO:
- Understand the territory and the potential: the most common mistake sales leaders make is that they treat all territories and markets the same. In reality, every market and territory is completely different. If you’re selling software to the financial securities industry, the New York City sales region alone may need five sales people, whereas Chicago may need just one.
- Hire for personality, not skill: Sales people do well for a variety of reasons, including just getting lucky. But, the consistently successful ones have a certain personality that makes them successful over a long period of time. Make a checklist of the most important traits you are looking for, and apply that checklist consistently in your hiring process
- Enable for success: This one is my favorite. By far, the biggest reason sales people don’t succeed is that the company fails to provide them with the right enablers for success. For startup founders, this translates into a very simple and important thing: train and empower your sales team to confidently represent your company and your products (and avoid the tendency to be controlling in every aspect of the sales cycle).