What Startup Founders Need To Know About Sales
I had a heartbreaking conversation a few days ago with a VERY successful VP of Sales (think 4x growth year over year). He told me he was given the green light to scale his team (Sales and Customer Success), which was great, but that he was also handed an unrealistic revenue number along with it that was basically picked out of thin air.
But when he brought that up to the founder (a good friend of his who begged him to join the company almost 2 years ago), the founder basically washed his hands of it and said “figure it out or you and the leadership team are fired.”
All I could think was “Seriously???”
I see many startups get sales right these days (really). And that gets me excited. But I also see so many sales failures that are caused by founders who short-circuit their people’s potential with a lack of appreciation or knowledge for why sales is so important (or how to do it correctly).
Founders, I’m not here to point fingers. I’ve had my fair share of angst in my own career in this regard, and it’s why I founded ATP in the first place — I KNOW we can do this better and am here to help you fight the good fight.
But as the founder, you need to realize your role is pivotal for the success or failure of your sales hires. If you get it wrong, it can literally shut you down (yes, the stakes are that high).
To help you empower your people to bring home the revenue you’re hoping for, here are the things you need to know about the sales process that will set you and your reps up for success.
Just so you know, I did a quick survey of my LinkedIn sales colleagues to make sure I’m not off base with this stuff — there is a consensus.
Startup Sales Is Not A Turn-Key Operation
It’s tempting to think you can create beautiful technology, hire a salesperson with a ton of gumption and voila! Revenue comes rolling in!
The reality is, it doesn’t work that way.
Think about dating. Would you ever expect to walk up to a person in a social situation and have them agree to marry you on the spot? No way. It’s much more likely they’d want to take time to get to know you first, even before agreeing to coffee.
Sales (and especially startup sales) is exactly like that. In order to engage your customers (and more importantly to figure out if they’re even a good fit for your product/service in the first place), you need to get to know the way they think and the things they care about before they will ever say “I do”.
So whether it’s your first big push to sell your product or even your 8th, you need to internalize the fact that there’s no “one-size-fits-all” sales process you can just drop in and run with. It takes a lot of testing to figure out how to close a deal at first.
That’s because your sales process is defined by how your customer buys, NOT by how you want your people to sell. You have to work from your customer’s shoes, not your own.
This quote from one of my LinkedIn comrades nails it:
“While in startup mode you must be ready to pivot in major ways on almost a day-to-day basis to get your “process” discovered. Everything (and I mean everything) must be measured and scrutinized to a crazy level.”
Additionally, you need to keep this in mind for the people you hire too. It’s unlikely that even the perfect sales hire is going get it right from the first day for the same reasons.
Bottom line: if you’re starting something new, you absolutely must be willing to patiently work out your process against the market if you want to succeed.
Your Salespeople Can Only Sell A Product The Market Wants
At first glance, this is probably a “duh!” statement. But in my experience (and the experience of my fellow sales comrades), a lot of founders get caught up in solving problems that only exist in their head and never make it across the chasm.
A recent review of 101 startup post mortems by CB Insights more or less confirms this too. Among the startups in the analysis, they found:
- 42% cited a lack of interest from their market as the reason why they didn’t make it
- 17% cited a poor product as the reason they didn’t make it
- 14% cited ignoring customers as the reason they didn’t make it
You may think this isn’t you, but I want to challenge you to really take this to heart. Even Google got where they are today by adjusting their vision according to what the market was telling them. So you need to be very careful not to let your vision for what YOU think your product should be supersede what your customer thinks if you want the revenue you’re hoping for.
Practically speaking, a good habit to get into early on is spending quality time on the front lines with your people. Participate on sales calls and gather feedback from your rep(s) and customers regularly to stay in the loop re: what’s being said about your product and ways you can improve it.
Trust me — the insights you’ll gain could make the difference between being on that post-mortem review or truly being the next big thing.
Attrition Is Not “Something To Build In” No Matter What Anyone Tells You
Oh boy. I need to calm myself on this one (be still my heart, be still). This is the entire reason I started ATP in the first place.
Through my own sales process/client vetting (yes I vet my clients as much as I vet the talent I bring their way), I’ve had several conversations where startups have told me they built attrition right into their hiring plan. For some reason, they or their board (or both) figure it’s okay to hire a bunch of people upfront thinking they’ll just weed out the bad ones over time (and repeat).
Not only do I back (read: run) away from an engagement like that, I’ve never seen that approach actually work out when I follow up with any of them. In fact, it has usually wreaked total havoc on the entire organization, including making it more difficult to hire top performers in the future.
Don’t play with that fire. There is a better way.
Most people who push that philosophy think high churn is just part of having a sales team, since statistically that’s what industry data shows. But what they don’t understand is those numbers are self-inflicted.
Look, the most concise way I can make my point with this is retention is possible and it starts with you as leaders. People leave bosses not companies.
Think about it like this: if one of your employees doesn’t have the right skills or mindset, who is responsible for correcting that? If they don’t have the right tools, who needs to provide them? If they aren’t meeting expectations, who is responsible for making sure they can, or hiring a better employee if they won’t?
If you’re the founder or leader of a startup, the answer is you. Are they failing you or are you failing them?
So if you want to keep your people and avoid the nasty effects of a mishire, you need to make sure you’re setting them up to kill it. The best ways to do that are:
- Work on your leadership skills religiously
- Make sure you as a founder continuously invest in the sales people you’ve hired and work tirelessly to understand how their world affects your bottom line (this article is a good start).
- Set reasonable, well planned expectations on sales performance
- Realize there is no ideal sales candidate — you have to define that for your product and marketplacebefore hiring if you want to get the right people
- Be patient — no matter how terrific your product/service is sales aren’t going to start happening overnight
Enterprise Sales Is Much More Difficult Than You Realize
At some point, you’re probably going ot look towards the enterprise market. And you absolutely should. With big logos comes big dollars and who doesn’t want a piece of that action?!
But if you think you need to be flexible on your other sales processes as an early stage startup, you need to 10x this if you’re thinking about the enterprise market.
That’s because enterprise sales is less about selling a plug-and-play product and more about creating a custom solution to a single customer’s problems. This is NOT transactional, and the work involved in closing a sale like that is very complex and very expensive for starters.
I won’t go any further than to say I’ve written an entire post on what you need to think about before you get into enterprise sales. If that’s where you have your sights, read that first.
Sales Success Is Within Your Reach…But It Starts With Your Leadership
It may seem like a daunting task to add something else to your plate as a founder, but if you’re not already sales savvy, make a commitment to grow with your sales team right now. Believe me, your success hangs on it.
For starters, you can do this by making sure you’re soliciting feedback from your rep(s) and customers, reading up on sales on the regular, and collaborating with other founders on what they’re seeing in their business to learn more about what to do and what not to do.
On the daily reading front, here are a few of my favorite resources that I still visit myself to stay up to speed:
- Leadership — Simon Sinek
- SaaS industry trends — SaaStr
- Startup trends — any of the Inno lists
- New York centric fueled with helpful sales insights — AlleyWatch
- All things sales and startups — Sales Hacker
- The sales and marketing mothership — Hubspot
- Where sales people tend to congregate — Linkedin.com
As someone who values feedback herself, I want to know: what are you going to do differently when it comes to sales? What questions has this raised in your mind? Drop a comment below and let me know.
And as always, thanks for reading!
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