It’s a mistake I see made over and over again. A first-time entrepreneur assumes that selling at a startup is like selling at an established company. Many angel investors and mentors from established companies make this mistake too.
If you have never been in a startup before or been the founder of one and run the startup sales gauntlet, you will likely make this mistake. And it is not a trivial one to make. Many first-time founders have sunk their companies because they did not approach startup sales correctly. Others that made this mistake just cost themselves and their investors a ton of money and wasted more time then they had to spend running a sales process that was ill-equipped from the outset.
You approach customers and close deals in a startup very differently than you do at a going concern. Selling at an established firm usually means executing on a well-tested plan to sell a product with a track record of meeting the needs of customers willing to pay. Essentially, you follow a map down a well-traveled road. Whereas at a startup, you are on the opposite end of that spectrum. At the beginning, usually, it is just the founder, some ideas, and grit.
But there is a process and a rhythm and a methodology to startup sales. Done right, it allows a startup to move forward in a productive and results-oriented manner.
To succeed in sales, a startup needs to engage customers, test market hypotheses, and evolved the product in a structured and rapid manner while closing customers on a real exchange of value, even if that exchange does not include cash. Moreover, founders of startups need to start this the day their doors open for business and do it every day thereafter.
This startup sales process requires you to engage the market actively and learn and iterate rapidly as you connect with prospects, testing what sells and what does not, and then double down on what does. You systematically and iteratively work to find a message, a market, and a price point that allows you to sell your product in a repeatable fashion. Then you craft this information into a system that others will use to sell for you in a predictable, profitable manner.
Think about the difference between an established company and a startup. At an established firm, once hired, new sales reps often go through extensive training on the product, market, target customers, and customer engagement. At a startup, the information to run such a class does not exist. So even if you could run a training class, you can’t.
At the Exponential Group, we’ve developed the Boot Camp for Startup Sales, an organized sales training program that coaches new startup founders on the best ways to engage and sell a market on a new product idea. We take into account the uncertain nature of a startup and the limited experience of a founder and provide them with the tools, resources, and knowledge to sell into an unstructured environment. And we then help them take this experience, the learning, and the successes of selling a new offering and show them how to build it into a sales machine that can drive the company forward.
Without structure, startup founders have a hard time figuring out who to target and what level of activity they should maintain to bring about sales, much less how to iterate on a sales message or approach to selling a prospect.
We help founders understand the different sales stages they will pass through and the types of talent they need to hire at these various junctures of their startup sales journey, and the efforts they will need to apply.
If you do not have a clear understanding of the unique nature of startup sales and adhere to fundamental startup sales processes, you will waste money and lots of time, make the wrong sales hires, and cause a lot of damage to your startup.
Investors: the blind leading the blind
Almost as bad as a founder that is ignorant of the startup sales process is an early-stage investor that is blind to the true rhythms of this practice. First, they will make bad investments because of this lack of knowledge, and that is on them. But more detrimental, is that they will provide misguided counsel to young entrepreneurs. And when you have a founder and investor that both do not understand this process, now you have the blind leading the blind. And this quandary means that a startup is going to need a hell of a lot of luck to survive.
Founders and investors understand that there are a methodology and a process for startup sales. Learn it and don’t go into battle without this knowledge and insight.
Click here, to learn more about the Exponential Boot Camp for Startup Sales,
Written by Tim Bates