S4S INTERVIEW: STARTUP SALES STRATEGY
Jorge: How did you get into sales?
Whitney: I’ve always loved the idea of building something from the ground up, and sales encompasses that in so many ways. However, I didn’t know sales was my passion until I spent two years working at a law firm focusing on patent law and learned a lot – that law was not for me.
I was close with one of the partners at the law firm, and when I shared with him that I was torn and knew law was not a good fit for me, he suggested I explore sales as a route. He recognized that I am great with people, a fast thinker, a hard worker and someone who enjoys helping others and sales was something I could really leverage my skill set for. That set me on my path to where I am today.
In 2005, I moved to the Bay Area and landed my first sales position at LoopNet. When I started selling, I fell in love with it, and I’ve never looked back. LoopNet was around 70 people when I started, and I left post IPO in 2008 when the company was around 320 people. As a part of the early team, we built a great company together. I helped launch two new products starting from zero, which was my first taste at intrapreneurship.
This made me realize how much I love working with startups. Startups have the opportunity to change and shape society as we know it. This is incredibly powerful, and we’re lucky to be at the heart of startup creation in the Bay Area.
Jorge: What are a few characteristic of startup selling?
Whitney: To me startup selling means three things:
Test, test and test again: This is key to selling but also for startups in general. You’re doing something new. You take what you know about what works, while being open to doing something completely different. In product development, you have to be agile and test different tactics to see what is going to work for your market, and startup sales is very similar. You may think you know the right person to speak with, the right way to pitch your product, or the right sales model and price for your business, but you really don’t until you have the conversations with your customers and run the numbers. You have to keep testing and then iterating.
Thinking big when you’re still small: Just because you’re a few people right now, it does not mean you can’t disrupt a market. You may only have a few customers, but that is not where you’re going to stay. I’ve seen a number of early stage startup salespeople, even founders, undervalue their product, get pushed around by larger companies, or sell to the wrong customers. These can cause big issues down the line. As a startup salesperson or leader, it is important to understand the costs each of these decisions for long term growth.
Your initial customers and partners are going to be your brand ambassadors. It is important to choose wisely. Look for companies with the right reputation in the market, who can move quickly and will enthusiastically stand behind you and your brand.
People buy a startup’s vision, not their “finished” product: As a startup, you maybe a little guy, but you started your company because you believe in something bigger. The people who joined your company believe in what you’re trying to do and in you. As a person selling for a startup, you are selling your customers on this vision too. You are selling them on the concept of being innovators, early adopters and thought leaders in their market. You are enabling them to be those things. This is a very powerful message for your early adopters. This is the reason they will buy, and this is the reason they will stick with you -as long as you deliver. That said, only sell what your product is currently but also with the vision of the problem you are solving. I highly recommend only selling features that exist or are in the current sprint.
Jorge: What does “sales” mean to you?
Whitney: I’ve thought about this a lot. It’s something I get asked by people a lot since I talk so much about loving sales. And apparently loving sales is not a common thing. To me, sales is helping people make the best decision to grow their business. This is my favorite part of selling for startups! With most startups, you are bringing a new idea or approach to market, and for the right customers, you can make a huge impact on their business. And the key to this is identifying who the ‘right’ customers are for your business.
Jorge: What is The Sales Method and how can startups leverage your expertise?
Whitney: The Sales Method is the process of finding the right blend of sales, marketing and product to optimize growth for your business. A friend and I recently coined the term “sales-market fit.” Sales market fit is when the cost to develop and sell to a market is not substantially greater than the lifetime value of the customer. In my opinion, the Lean Startup method does a fantastic job at helping to identify if you have a product that fits the market’s needs and testing to make sure that is the case. It also helps you to identify what your target customers might look like. However, one area the Lean Startup Method falls short is giving founders a framework for selling and marketing that product. If you build it and they come, that’s fantastic, but this is not the case for most startups. The Sales Method is a process a company can use to find their sales-market fit.
Jorge: What are a few of the most common sales-related struggles that you see early stage startups often experience?
Wrong Model for your Market - There is no one size fits all sales and marketing model. However, time and time again, I see founders hire a sales leader or marketing leader with the wrong experience for their model of business. That leader then wastes precious time and resources doing what “they know how to do” vs. what is best for the business. There is a framework for sales and marketing, like in development, that startups can use to figure out the correct model for their business. It does require a bit of testing, and it won’t be perfect from the beginning. But the flexibility to optimize your sales and marketing activities is key to your growth.
Whale Driven Product Development - If you’ve worked in product, you’ve seen this before… a large prospect says they won’t buy a product unless you build X for them. X feature is not part of your product roadmap, not is it the feature needed for the majority of your customer base. But it won’t be that much work. The next thing you know, the same customer won’t buy and will pull out unless you build another feature, and then it goes on… and on. A company gets derailed by these customers called “whales” and loses product alignment with it’s core customer base. To avoid this, prioritize data based decisions tied to existing and potential customer’s monetary value correlated with the long term product roadmap.
Founders Think They are Bad at/Hate Selling - Selling is not for everyone, and there are definitely types of people who are better at selling than others. That said, as a founder, selling is going to be a large part of what you do day-to-day. This can include: fund raising, recruiting, setting your company culture, dealing with the press. All of these involve selling. Whether you think about it as selling or not, it’s what you’re doing. However, many founders freeze once selling entails exchanging money for their product. As a founder, whether you’re technical or not, selling is something you need to get comfortable with. Chances are you’re better at it than you think.
Jorge: If you’re a B2B startup founder who is trying to generate traction to raise money, what KPIs should you be tracking and trying to improve?
Whitney: KPIs really depend on your individual business model; however, general stats that are universally important to pay attention to are:
- customer acquisition costs
- lifetime value of a customer
- average deal size
- time from lead to close
- cancellation rates and retention rates
When you have a bit more data, I recommend looking at your customer acquisition funnel and measuring conversion rates at each step from monthly unique visitors all the way to a close opportunity. Percent of conversion and time it takes to move from step to step will tell you a lot about what is working and where there is opportunity for improvement.
Jorge: What are the first few sales tools a founder should purchase?
Whitney: I generally like to keep things lean early on to keep costs down, but services to save your team’s time so they can focus on sales are worth every penny.
CRM – As a startup you have wiggle room early on to use other systems, but it’s likely you’ll end up on SFDC when you grow up because of the ecosystem and reporting. A few simple CRMs to look at are RelateIQ, Close.io, Pipedrive, Insightly, Base and Streak.
Identify Companies/Contacts - LinkedIn (Premium), Datanyze, Builtwith, Insideview
Contact Information – Rapportive, Radius, Data.com, public databases, hiring an outsourced researcher
Jorge: What sales tips would you give a B2B founder or early sales employee around what to focus on during the early days?
Whitney: Understand the appropriate marketing and sales blend for your business. For lower end products you need more indirect marketing to drive demand. As you move up market, you need more direct marketing. This will also inform you of the skill set you’ll need from your sales leader. If you’re more transactional, you want to look for someone who can manage younger teams. If you’re more consultative or focused on insight selling, you want to look for a more senior team with industry contacts or knowledge.
Identify your cherries and focus, meaning identify the easiest customers and titles to sell to and focus until you’ve developed traction. When you’re ready to expand outside your core, grow your customer base from the fringe cases of your core customers. This will help you to expand without requiring extensive product development.
Ensure a steady flow of communication between product, marketing and sales. This is the holy grail for startups. If you can keep these teams communicating efficiently and effectively and valuing the impact each group has on the organization, you win! I’ve seen very few companies do this well, but those that do grow exponentially faster because each team knows what the other needs and how they can help each other be more effective.
Jorge: What is the profile of the type of startup that can leverage The Sales Method’s services?
Whitney: Most of my clients are teams beginning to ramp up their sales efforts. They’re trying to figure out what scaling sales looks like for them. In some cases, these are small companies that are just beginning to sell their products.
In other cases, the companies are a few years old and realize they ready to push their product to a broader market. Either way, the companies are ready to figure out what a replicable and scalable sales process to monetize their business.
Jorge: I have to ask, do people tease you about your last name being Sales?!
Whitney: Yes, all the time. One of the funny things about it though, is that it’s actually one of the first buying signals I get from people. If someone asks me if Sales is my last name I know they are a buying mindset. It’s really fascinating.
Jorge: Anything else you’d like to share about yourself or The Sales Method?
Whitney: The role of sales in a company is evolving with the invention of marketing automation and transparency the internet enables. The Glengarry Glen Ross and Boiler Room days are over. I see sales leaders apply old tactics over and over because they have not learned the modern way of doing business. As an industry, we need to catch up. I started The Sales Method to help facilitate this process.