Early founders I've worked with all had one thing in common, a deep understanding of the product they were building. Yet, some of these founders never went on to earn a dollar from their product. Others were fortunate to land a few initial customers, but unsuccessful in achieving anything resembling product-market-fit. And many fewer still are those founders that found a path to consistent growth, adding logos and revenue with apparent ease and predictability.
It comes down to two relatively simple concepts: knowledge and process (purposefully excluding persistence and luck from this conversation)
In this context, knowledge is defined as having a deep understanding of all of the following:
- market trends
- competition
- target users
- your product
- the material impact of the problem (emotional and quantifitative)
I'm starting with knowledge because without mastery of the above, it's unlikely that you'll ever make a real (non-friendly) sale, regardless of the maturity of your process. If you are a founder and you (or your cofounders) do not currently possess a deep understanding of all 5 of the above, then you are going to struggle.
In my experience, it's much more difficult to pattern match (a skill required for scaling) without first having a firm grasp on the dimensions across each of the above items. As a salesperson, this is one of the most challenging skills to acquire for new Account Executives (AEs), but absolutely necessary to excel. Without having a strong contextual foundation consisting of these items, it's common to see early founders and less experienced AEs miss the cues and fail to ask the questions required to generate a much deeper understanding of motives, triggering events, and cause and effect.
If employed early, lightweight processes actually simplify decision-making and accelerate learning.
I'm defining process as a collection of mental models used to build and/or reinforce the following:
- credibility in your ability to fulfill stated vision
- momentum throughout the engagement
- institutionalization of learnings
- accountability - internally and externally
- a customer-centric culture
- sales pipeline
- bigger deals
- predictability
Since I haven't really found a great resource that touches on this topic, especially in targeting early stage sales, it's worth going into detail on each.
Credibility
One of the biggest challenges for early-stage companies is to build credibility with their audience. Remember, the person you are pitching has to feel confident that if they are to invest their time, or better yet, their colleagues' time, then there will be either a personal or professional return on that investment. This is why you see long-winded bios of founders and seed stage funding announcements used as carrots to get meetings. In an ideal world, you'd have some social proof to open doors to new prospects. Unfortunately, social proof is rarely available to early startups outside of the COSS space, or without dynamic, opinionated, and recognized founders.
So what other options are there?
What most founders don't realize is that the process in which you introduce a prospect to your company innately informs them of the maturity of you and your company. This is the first indicator as to whether you will provide value or waste their time. Do they see you as a peer that will stretch their knowledge and understanding of the space? Does it appear you've done this before? Will subsequent conversations introduce novel ideas? What do others that work with you get from this process?
Reduce prospect anxiety and give them confidence through a well-defined engagement process, one that sets expectations and timelines with clear milestones.
Momentum
A well-defined engagement process naturally holds parties accountable, but it's what happens at each of these "check-ins" that either builds or reduces momentum within the engagement. One of the challenges (and opportunities) of early engagements is the constant exchange that occurs: founder/engineer show, tell, ask questions; prospect or customer provides answers and feedback.
Early on, you may feel resource-constrained to deliver on this feedback. Little do you know, this is probably the time in your nascent startup's life where you have the most agility and flexibility. Use this to your advantage against the incumbent solution. One thing that most folks don't realize is that any time you ask for feedback, you are making a commitment to do something with it (not necessarily to implement). Momentum only builds if this cycle continues to a point where the prospect is achieving some end-to-end value for at least one use-case.
When I structure early engagements, I identify and communicate milestone markers at the onset to align everyone on what each team is responsible for, and also to validate that the customer expects to receive value at each of the milestones. Then within each individual session it is critical to demonstrate movement -- either via iterations in the product or the processing of insights and feedback that the prospect provided in previous sessions. I also highly recommend proactive notifications of any enhancements the team has made, as long as you can develop a repeatable cadence. Imagine yourself as the prospect - you'd appreciate getting to know the destination in advance, feel heard and valued, and gain unbridled access to engineers that you couldn't get with your current vendor or in-house.
Institutionalize Learnings
At my first startup, I came to the realization that the customer-facing founder is the most likely the best salesperson the company will ever have. If the founder can't sell the product, it's unrealistic to expect a salesperson with less knowledge (and usually direct customer empathy) to come in and get a prospect to make a big bet on them. This caused me to ask, what can I do to close that gap and make it so any new sales hire can get to 80% of founder sales effectiveness in short order?
The answer is in documentation.
Document every interview, every customer question, every win (big or small), every positive feedback, every criticism of a competitor, how customers describe their problems and the impact. At my last startup, I collaborated with our design partners to write internal case studies. The impact was astounding. These docs reinforced and communicated our value directly to customer stakeholders, were circulated with decision makers, became the basis for business justifications attached to proposals, and were later converted to public case studies. The value wasn't just external though. A goal of mine was to get every engineer to be able to describe the value of our product. Through reading these case studies and being included on customer calls, engineers developed greater customer empathy and problem awareness, allowing them to design better features and solutions. Our demo script was 100% informed by customer stories and personal experiences, leading to a narrative that resonated in every meeting. This led to higher meeting to proof-of-concept conversion rates and a shared context that allowed for greater autonomy.
Accountability
An engagement process that includes a timeline, actions, and expected outcomes makes ownership transparent for all parties. By making this expectation visible upfront, it serves as a forcing function for action. Additionally, when internal teams understand these commitments and timelines, they serve as a prioritizatioon function. This approach also makes it much more natural to have a conversation with your prospect about timelines, and for your team to learn the typical evaluation and buying process for similar technologies within an organization.
Customer-Centric Culture
I want every one of my teammembers to be thinking with the customer in mind with everything they build and/or communicate. One process I put in place is to invite (not just allow) anyone and everyone into customer meetings. This is a lot easier to accommodate now that we're mostly virtual.
There is a caveat. Prior to opening meetings up, it's important to set context as to why each attendee is invited and what their expected role and takeaways should be. For instance, I may open up the opportunity for specific engineers to validate their designs or gain feedback on their releases within the session. I also find that having an audience forces me to be more critical in my meeting preparation, since I may need to find time to weave others' objectives in.
Historically, customers have been put off by the 12-legged meeting. This is because the prospects are not given context as to why these additional attendees are present, or the attendees add little value while there. This type of interest and attendance can be turned into a positive very easily.
One recommendation: if you expect to have a large number of people in the meeting, it's a better use of everyone's time if introductions are either eliminated or delivered by one person from each team (as long as your prospect is aware of this task). This reduces intros from 10 minutes to 2, allowing you to cover more valuable topics within the allotted time.
Sales Pipeline
An engagement process naturally helps you prioritize where your time should be spent. Depending on where prospects are dropping off in achievement of milestones, you can start to generate something that looks like a funnel aka a sales pipeline that represents likelihood to purchase. Each milestone should be thought of as a gate, where you gather more information and access and they derive more value from the interactions. The more gates you pass through, the better idea you should have on deal size and the hurdles that remain.
You'll see that you naturally start to take different actions based on where prospects are stuck. You'll start to think of ways to move prospects through certain stages faster. And you'll begin to see how and where dollars are going to come from. There are books written on pipeline stages, but the idea is that if you have a loosely defined process from the get-go, you'll learn (and then know) what to do for each prospect you're working with based on where they are in that process. This is one of those items that will definitely evolve as you complete more sales cycles (and losses). At even small scale, these prospects begin to represent a pipeline of potential revenue with corresponding likelihood to close. This is your sales pipeline.
Bigger Deals
Bigger deals are almost always correlated with the ability to quantify the value of the solution relative to the customer opportunity created, problem eliminated, or risk averted. Equally as important is your ability to gain access to buying power within the organization. If, during your sales engagement, you are working to build a quantified business justification and gain access to the economic decision maker, then you will get bigger deals. Unfortunately, it's not always easy to do this early in, when you have no customer validation and limited capabilities. However, a solid, quantified business justification that answers the standard questions, Why change, Why now, Why us, will undoubtedly come in handy during negotiations, allowing you to justify a price with evidence.
Predictability
If you want to achieve larger funding rounds, you need to demonstrate predictable growth. If you do not have a process that tracks why customers buy, what an ideal customer looks like, your evaluation win rates, what your average deal size and sales cycle are, and what your current pipeline looks like, then it's hard to justify a valuation. Just like with getting bigger deals, you'll need data to justify the value. These are great items to think about and track early on, and there are professionals in Sales Operations that can help you set up rudimentary tracking within your existing systems of record.