Lispian Random meanderings on whatever catches my fancy

Sales, Salespeople, and Salesmanship

In my prior entrepreneurship entry I talked about the key hires that a company had to make early on in its life. I purposely left out one of the most important: the sales team. This could be a VP of Sales, a Director of Sales, whatever, but for a company to succeed it needs to have qualified, dynamic, hungry salesmen (and women). That’s a given. The question though is not whether to have them but when!

A company lives on cash. For VC funded companies the initial infusion of cash comes from VC Funds that invest a part of a given fund into a company. Obviously, if this is the only cash the company ever receives it won’t be long for this world. A revenue flow is required. To attain that flow sales must occur.

But how? That’s the trickiest question of all. How do we get sales? Fortunately it’s simple: provide customers with a product or service that scratches a particular itch and one that results in a demonstrable return on investment (ROI). Unfortunately, it isn’t that easy to quantify nor to find those first customers — those “early adopters” who effectively will wish to live their startup aspirations vicariously through your firm.

First, let’s discuss the most important aspect: ROI.

Some ROIs are easy to determine. A construction worker requires a heavy duty, reliable vehicle to get him to and from various construction sites. The construction worker will have tools and other things he will need to transport, and a truck or similar conveyance suffices to efficiently bring him to his various jobs. Similarly, when selling a software product or a service one must be able to convey to the customer the potential ROI. This is calculated as either a savings or additional revenue based on the use of the service or a savings in time or a new capability that opens new opportunities.

When a new product is being created it is vital that you get out there and talk to your potential customers to determine what their itches are and what your potential product might do to help scratch that itch. This information is typically called “marketing material” and will be utilized by the sales team, and must be easily digestible. The sales team will be talking to customers who are extremely busy. They won’t have time to listen to long, drawn out explanations of what the product does and how it will change the world. Instead the entire product must be reduced down to three packages: Elevator Pitch; Presentation; and Demo.

Elevator Pitch

This is the hardest one to do, but the most crucial. When approaching a potential customer often times the salesperson has a few minutes, perhaps less, to pique the customer’s curiosity. In that minute or two the salesperson must convey to the customer why she should be interested in the product or service. The customer is typically very busy, and is bombarded by sales pitches on a regular basis. She has probably become fairly numb to them by now, but the salesperson must still pitch if your company is going to go anywhere.

So the salesperson is in front of a prospective customer and she decides, for whatever reason, to listen for a minute or so. Now comes the crucial part, the salesperson must be armed with sufficient information concerning the product to be able to answer questions while still interesting the customer in the product. But what is the pitch? Picture a twenty to thirty second blurb that describes the benefits of your product to the customer’s current needs or future direction. That implies knowing something about the customer, which is crucial. Wasting a customer’s time is one of the worst things that anyone can do. Never waste a potential customers time. And, if you find out during the course of a conversation that the product doesn’t fit the bill, quickly explain that it doesn’t and, if possible, point the customer in the right direction. That will hold you in good stead the next time you call. If you waste the customer’s time and she believes until the very end that you have something that can solve one of her problems, and don’t, you won’t be welcomed back by that customer nor perhaps by the entire organization. Time is a precious commodity, ensure that you don’t waste it.

Obviously, the other reason the elevator pitch is so short is that it can be quickly determined whether or not there is a potential sale or not. If not, the salesperson can move on. And sometimes the location for the pitch is right after an impromptu meeting where someone you know introduces you to someone who they feel has a need for your solution. Thus, the elevator pitch has to be something you can quickly rattle off. One can further picture the elevator pitch as the “hook” of a good story. It helps reel the listener in, makes them want to know more.

The Presentation

Now, if things go well you’ll be invited to see the customer, usually at their place of work. She’ll usually want a twenty-minute presentation on the product, what it does, and how it will solve at least one of her pressing problems. Furthermore, it will explicitly indicate what type of return she will realize from this technology.

Since you’ve been invited to present there’s also a high likelihood that the potential customer is actually an early adopter. Early adopters are the rarest of breeds, but one of the most desirable. They are individuals that work in large corporations that understand that advanced and emerging technologies can make huge differences in how an organization is run and present a huge potential return on investment. As I’ve mentioned, often times these early adopters seek to live the startup life vicariously. They thrive on helping a startup succeed, knowing that the success can be mutually beneficial. They are risk takers and when they are found they should be nurtured. A good salesperson will have dealt with a number of early adopters and know exactly what their current pain points are and whether or not your technology can address their concerns.

So a short presentation is created that highlights the main points:

  • Who the company is.
  • What the product does.
  • How much the product costs.
  • What type of return the product will deliver.

Hopefully the return on investment will be self-evident by the time the presentation reaches its final stages and the customer will want to know about next steps.

Next steps usually mean demonstrating the product, but sometimes that step is skipped in favour of a pilot deployment, especially if the product does not impact any mission critical systems within the organization.


At a good presentation the customer may well ask for a demonstration of the product, if it’s available. Or, the customer may request that you return with a demo version of the product that can be demonstrated to strategic individuals within the organization.

Any presentation you choose to do should highlight the customer’s problem as best you can. Showing the customer something that aligns with their needs and issues means they’ll more quickly grasp the advantages your product offers. In other words, the demo should illustrate to the customer how her problem will be solved or how she will gain an advantage she currently does not have. She should not have to take try to figure out how your demonstration can be applied to her particular predicament. In fact, the best outcome would be if the customer not only sees the product’s applicability to a particular problem but also to others and then leads the discussions on how those additional problems can be addressed. Usually what happens then is the customer presents similar problems that the product may solve.

And what are the signs of a good demo? When the customer spends more time talking excitedly to one another than to you. Listen politely and take notes. What they’re saying is exactly what they need and you’re now in a perfect location to benefit from information you didn’t have 20 minutes prior. A good customer will want to work closely with you, so ensure that if anything isn’t quite clear you bring it up in a pleasant manner whereby you ask the customer for clarification, especially if you feel that the customer may have misunderstood what the product does. Furthermore, if the customer wishes to use the product for something entirely different than what you initially thought, go with the customer’s instinct (for now). They might have hit upon your niche better than you ever could have. I recall during meetings with large banks where the banks were more excited about the possibility of doing dynamic, real-time analytics of financial information than the security aspects of the software we were presenting. Ultimately, they became customers of an audit capacity to determine fraudulent use of bank cards. The more complex security stuff was immaterial. And, interestingly enough, they were willing to pay a premium for fraud detection as it was a much larger problem than the security issue. Something none of us were aware of figuring security subsumed fraud and audit and not that fraud and audit (effectively accountability) was what they really needed and wanted and could show immediate returns.

Who To Hire

If you’re VC funded you’re probably going to have to hire a salesperson, maybe even a VP of Sales and some staff. If you’re on your own you will have to be the salesperson. Personally, I think being the salesperson for your firm is the way to go. If you can’t sell the idea to someone else how will anyone else? If you’re truly not that good at selling, maybe the solution is to get a partner in early who is good at sales. Take a page from Microsoft or Apple: one nerdy guy and one guy who’s truly a businessman and salesman.

Ultimately, assuming your firm survives, you’ll need a salesperson. A good salesperson. One who has prior customers that have received a good ROI on prior products pitched and will be more willing to listen. Furthermore, a good salesperson will have worked in a similarly sized company and be familiar with the support — or more accurately, lack of support — he or she will get.

Hence, to staff the sales team you must examine where the various individuals worked, what type of company was it, their references, etc. If a potential salesperson worked for a large software company that sold most of its wares through retail outlets and you’re interested in direct sales, then there just isn’t a fit. Furthermore, often those salespersons from large organizations are accustomed to an infrastructure to back them up. In a startup no such infrastructure exists. In fact, in the beginning the entire sales process may be run by a single, driven individual.

That said, if the salesperson was there on the ground level and helped grow his or her previous employer then they might be a perfect candidate. They might be interested in reliving the startup experience. Find out. And if they truly just want to return to the “luxury” of a small firm, they might be perfect.

One of my VCs used to say that the best salespersons were those that would eat rocks if they were hungry. They were the ones that thrived on the chase, they hunted down orders and business and loved dealing with early adopters. In fact, many VCs group salespeople into two groups: hunters and gatherers. The former require little infrastructure, are always on the move, are well connected in a given industry sector, and thrive on the hunt for new business. The gatherers, on the other hand, are those that work best nurturing existing customers. The former are usually found in startups. The latter in large multi-nationals. Both have a place and a purpose, but it is the salespeople of the former variety that a startup needs.

A good salesperson will actually create their own material, and will constantly be discussing the product and feedback from customers and potential customers with both the product manager and the engineering team. Salespeople are also the ones that will take everything an engineer or product manager says as gospel, even promising release dates to a customer based on nothing more than the musings of an engineer over a cup of coffee. To that end the job of a CEO is to ensure the dates the customers are receiving, as well as the potential ROIs, are backed up by the rest of the company. A startup survives on its reputation. If that reputation gets sullied it is very difficult to repair the damage. It always seems that bad news travels at twice the speed of good news, for whatever reason.

A good salesperson is a crucial part of any organization. The sales team must be kept small and dynamic. They have to hunt for business and bring in revenue. They have to coddle customers and ensure that the service the customers receive is the best possible. They have to extract vital information from customers and feed that information back to the marketing team, engineers, and product manager. They must be constantly networking trying to determine where the product can fit and looking for opportunities. Word of mouth sales are more powerful than any other type of sale. A good salesperson will not only be able to locate early adopters, they will be able to recruit those same early adopters into salespeople for your company. Good salespeople will get the early adopters to discuss your product with their colleagues by ensuring that the early adopter is properly handled so that the realize that your success is their success. And if you’ve read this far you’ll realize that the best initial salesperson is the founder. Start there and grow.

Follow your gut, listen to your customers, and be willing to change directions to whatever is most lucrative that matches what your firm does. Thus if the most lucrative thing is only part of what you’re planning on delivering, bonus! You can build that smaller piece, charge plenty for it, and then add in what you realize the market will demand going forward. Remember, being too far ahead of the market is bad. But knowing where the market should be is good. Being able to deliver that piecemeal is what allows a firm to grow going forward, providing what the customer wants as they come to realize what they want. And with a good sales team you should have little difficulty achieving success.

Comments are closed.

May 2011
« Apr   Aug »