I don’t watch movies or series. My friends have grown accustomed to this and they know I prefer wasting my time on something else - like live concerts or business talks.
I know I’m part of a really rare minority who’d rather spend one hour a half a day watching live versions of the same rock songs to see how the guitar player evolved the solo over time, or one-hour long fireside chats with leading entrepreneurs - like the ones we do at Startup Grind, rather than indulging in keeping up with all the wonderful series that are being released every week.
Some time ago, I set out to learn more about sales, so I decided to learn from the best. I have been watching talks on Youtube about this topic so I could hone my sales skills.
One of my favorites is the Sales 101 Recap that Tyler Bosmeny (CEO @ Clever) gave at Y-Combinator. Let’s get the party started!
Sales are best done by founders
Before ever considering hiring sales people for your startup, take a look at your founding team. Why wasting your precious resources on hiring sales reps that might get you nowhere, need to be trained, won’t be very flexible adapting to product pivoting and other startup nuisances?
It could be worse: you might not even have those resources. Therefore, time is the only resource you have.
Get one of the founders to be focused on sales. Founders are great sales people because you know the pitch like no one else, you’ve got the passion for your product/company and you’ve got the industry knowledge.
After all, it's the founders who have the roadmap in our head, allowing us to get out of every uncomfortable question.
The Sales Funnel: Prospecting
When Tyler describes the first phase of the almighty sales funnel (Prospect) as the figure on the left. Allegedly, there are many people interested in your product, but you need to focus on that small 2.5% that will jump on your wagon no matter what.
Trying to drag the so-called early adopters in won’t result in conversions. Early adopters will join once there’s traction or enough content/users on the platform to make it interesting, even at an early stage. The innovators will join regardless of all of that.
How to get to these people?
Digging through your personal network and reaching out personally to all of them that might potentially be an innovator.
Attending conferences. But not big ones like WebSummit, Mobile World Congress and such, where you’re just another fish in the ocean. Attend focused and specialized conferences where 100% of the people there might turn into customers: seminars for CFOs, sales workshops, or developer bootcamps. Also, emailing all the attendees before the event to schedule meetings is usually a great idea.
Cold emailing is useful, as practice makes the master. The more you write, the better you will become and the sharper your message will become. Try to be concise and aim for short emails that are straight to the point to maximize your success rate.
The Sales Funnel: Conversation
Tyler analyzed the amount of time he spent talking on the phone versus the one he spent listening.
This is something he learned from the top 10% sales people in the world: the best sales calls are spent 70% of the time listening, 30% talking.
Most entrepreneurs are so excited when someone takes their calls, that they stall firing on all cylinders and overwhelming the person on the other side of the line with an avalanche of information. This is overkill.
Try instead asking relevant questions and making the other person feel comfortable. You will get them to open up if you ask questions that tackle their own problems:
“how is your ideal CRM?”
“what struggles do you face daily when hiring sales personnel?”
“how would you improve bottlenecks on sales decisions?”
Most people, even those willing to buy your product, are not going to answer or follow up. You should try to be politely persistent, as Mark Suster put it in his blog entry One of My Most Frequent Pieces of Advice: Be Politely Persistent.
Get their YES or NO as soon as possible to focus on the potential customers that really matter and will drive your sales figures up.
The Sales Funnel: Conversion
So you say you’re about to land your first client, but you don’t have a contract. Where can you get one? You’re so focused on product, tech, HR and managing the company that you haven’t had time to think about this.
Luckily, Y Combinator have outsourced their sales documents. Use them. They’re great! Find them here.
At this point, Tyler advises the audience to avoid the following rookie mistakes:
Don’t quibble over minor points: Sign the deal, move forward, and then work that out by building a great relationship with your customer.
Don’t build extra stuff to get a contract: Don’t take clients that will use your product if you tailor it for them. That means, they don’t really want your product, and the effort you spend developing new features could be used to look for better clients who appreciate what you offer. To solve this, you can either sign a conditional agreement whereby they pay you to build that feature or else you could wait to hear demand from more customers.
Don’t offer free trials: They don’t give you real clients, nor commitment neither revenue. Tyler strongly advises to work on annual contracts with a 30- or 90-days opt-out period.
After watching this keynote I am more than ever convinced that founders should be the ones doing sales. Here's why:
Founders are goal-oriented and driven enough not to get caught in details.
Founders know exactly what is good for the company and what is not, therefore they won't engage in dubious agreements or contracts.
Founders know better than anyone when the company is out of fuel (i.e: money).
Other companies want to deal with C-level positions or founders when engaging into contract negotiations, not middlemen or non-senior personnel.
Founders are the eyes, voice and soul of a company. They embody the company's values and culture.
These are, of course, my lessons learned. What are yours? What have you learned lately about sales that you want to share with other thousands of entrepreneurs?