How to do founder-led sales
Do it the right way
This post is for founders doing B2B sales for the first time, or looking to brush up their sales skills.
I’m a strong believer that the founding CEO should be the company’s first VP Sales because it grounds your long term vision in the near term reality of your customers’ needs. I love seeing early stage CEOs prospecting for business, going on sales calls and closing deals as it builds empathy for the hurdles their future sales teams will face:
However, I commonly see 2 problems in founder-led sales:
Chasing revenue—It’s natural to want to do whatever it takes it get a deal done. After all, its hard enough to get in front of prospective buyers when you are small and every new customer is a proof point that helps with future sales, recruiting and fundraising. As a founding CEO this can be a blessing and a curse. On one hand, you can sell features and capabilities you don’t have yet, knowing that you can change the roadmap the moment you get off the call. On the other hand, these one-off customizations disrupt your plan, disrupt your team, dilute your value prop and create long term support debt. I see a lot of early stage B2B startups acquire an initial smorgasbord of SMB and enterprise customers only to get pulled in multiple directions soon after.
Educating instead of selling—Who doesn’t love referrals? It always feels great when an investor, advisor or friend introduces you to an executive at a big company. You meet, everyone says nice things about each other, it feels great, but no business materializes from it. But just know that big co execs love meeting with startups because it’s a refreshing break from their daily grind. They’ll usually pick up some insight from meeting with you that can make them look good with their peers without having to open their wallets for you.
So how should founders do sales without running into these issues?—The key lies in laying a foundation of focus and process and sticking with it. Here’s how:
Create an ideal customer profile—and keep it narrow. If I had a dollar for every startup that told me their target market is “mid-market companies between 500-5000 employees”, I could almost start a VC fund. Get as specific as possible with additional filters for industry, sub-industries and business model. Pro-tip: filter on companies founded in the last 7 years. They are less attached to legacy decisions, more open to change and more likely to give you a fast yes/no. For more more pointers on this, check out my post on how to create an ideal customer profile for your startup.
Create a target list and keep it small. If you have 0 customers today, don’t prospect more than 30. If you have 10 customers, keep it under 100. Your target market is always smaller than you think.
Create a value prop that you can communicate with a unique insight. Put yourself in your prospect’s shoes and answer the question, “what’s in it for me?”. A bad answer is a list of features and benefits. A good answer is an industry or competitor insight because execs care about these things. A great answer is a unique industry or competitor insight derived from your first party data.
Create a prospecting process. A basic early-stage prospecting process has 3 main steps; research, outreach (using your unique insight) and qualification. Qualification is super important, especially with referrals, otherwise you will just have a lot of seemingly great meetings where you are educating rather than selling. For more pointers on the nuts and bolts of this check out my post on how to build a high-converting prospecting process.
Create a sales process and follow it. A basic sales process for an early-stage company has 5 steps;
Discovery, where you uncover pain points, impact and critical event from all key stakeholders.
Prescribe, where you tie your demo or proof of concept to impact.
Propose, where you determine the decision making process and tie your proposal to impact.
Trade, where you negotiate pricing and terms.
Commit, where you paper the deal and setup the onboarding process.
Be rigorous about each step of the process. The more time you spend on discovery, the more you will learn and the less time you will waste on deals that don’t go anywhere (for a deep dive on this subject, check out this post on getting buyers to open up).
And the sooner you learn to sell on impact rather than on features, the more deals you will close, because when you sell on features you will always end up defending your feature gaps, whereas when you sell on impact your buyer focuses on what’s in it for them.
Create an onboarding process. A basic onboarding process has a kickoff call, some training and configuration sessions and a first value milestone. Remember, your first value milestone isn’t “logins created”, or “training completed”, it’s the first time your customer sees the impact they were looking for. For example, if you are selling a developer tool, the first value milestone is an engineer completing a job in the tool, not all engineers having access to the tool. If you are selling an employee engagement tool, the first value milestone is employees engaging with the tool, not HR telling employees the tool is available. If you set your first value milestone too early, you will struggle to drive adoption and your customer will struggle to realize the full impact they were hoping for.
Create a customer journey process. A basic customer journey has a sequence of scheduled checkins with your users and the buying team, with the goal of demonstrating the full impact. Don’t expect that your customers will figure it out on their own. People are busy so it’s on you to stay top of mind. Use these checkins to uncover additional pain points, impact and critical events to inform your roadmap.
Hire slowly. Don’t hire a VP Sales until you have at least two salespeople and one account manager ramped up and performing at an acceptable level. You want to manage these new functions directly to understand how they work and to inform the type of leader to bring in to run the team. For more tips on hiring, check out my post on how to build a go-to-market team for your startup.
Don’t obsess over sales compensation. I’ve never seen sales comp design it be a driver of early stage sales success. Increasing a sales quota does not increase sales. It just increases salesperson turnover and makes it harder to hire.
Stick to your process. Force yourself to sell what’s in production rather than what’s on the roadmap, because that’s exactly what you need your salespeople to be able to do in order to be successful.
Thanks for reading, good luck with your sales and let me know if you have any questions or suggestions for future topics!
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