Many MBA programs still cater too much to the needs of large, corporate management jobs or prepare students to enter big consulting companies or investments banks.
If you haven’t read Adam Lashinsky’s awesome new book about Apple, you should. It takes on many of the lessons MBA programs and Corporate America have been teaching about business for the past 50+ years and questions whether lessons from Apple might be more applicable in thinking about the future.
It is with this backdrop that I was really happy to learn from my friend Ethan Anderson (HBS alum & founder of RedBeacon) about an awesome program at HBS run by Tom Eisenmann called Launching Technology Ventures. Here is a sample of the reading list for the course that gives you a flavor for just how modern and practical this course is.
And that leads me to today’s post.
I got an email recently from my friend & fellow VC, Jeff Bussgang from Flybridge Capital Partners in Boston. Jeff (also an HBS alum) co-teaches the LTV course with Professor Eisenmann. He wrote me about a student of theirs who had written a blog post as a class exercise in which she had challenged assertions that I had made in a previous blog post.
That student is Erin McCann, who formerly worked in sales at Google, so she had pretty strong ground to stand on in her sales arguments. Her post is short & well written so definitely worth a read if you’re a startup person and want to hear some sensible views on sales. It’s titled “When Managing Sales People, Stage Matters.”
The fact that the course asks students to write public blog posts is a testament to its more modern teaching style. It’s one thing to write a class paper – it’s another to write a public blog post in which the person you’re challenging gets to respond. Awesome!
The post of mine that Erin took issue with was TEDIC – The Excuse Department is Closed in which I characterized typical sales reps as driven nearly exclusively by cash and very quick to find excuses for sales processes that aren’t working well. My list of excuses includes that seasoned sales people employ include: product, pricing, competition and lack of sales support.
Erin’s main points:
“As a former tech sales executive, I agree with many of [Mark's] lessons — when applied to later-stage, post-traction point startups . However, I advocate a more nuanced approach for early-stage startup teams”
1. Feedback isn’t always an excuse – and often sales people can provide the best feedback to your product teams
2. Sales people aren’t always motivated only by cash – especially in early-stage business you need to focus on equity because cash won’t be plentiful
3. Complaints about support may be real – it might actually be time to scale and give your sales people more leverage
I actually don’t disagree with Erin’s post, which is why I think it’s a great read for you.
That said, I think it is written without taking the full extent of my sales articles into account. My guess is that Erin hadn’t seen some of my earlier posts – so I could understand why she took the positions that she did. My guess is that we are likely in total agreement.
I thought it would be useful for others who maybe missed my sales series to have access to the main arguments in one central place with links out to the details.
1. I don’t recommend that you hire traditional sales people when your company is too early-stage. I wrote about that here – regarding “evangelical sales”. In your earliest stages the founders should do much of the selling precisely for the reasons Erin highlights: you need customer feedback to refine your product, your pricing and your differentiation versus the competition.
2. When you are ready to hire sales staff I don’t recommend bringing in people who are too senior. I wrote separately about that here – regarding “hiring people who punch above their weight class.” People who have “done it all before” often need bag carriers to assist them, are often accustomed to earning to high of commissions relative to what you can afford and are more equipped to sell once you’re gotten product/market fit and are quick to leave if things take longer to develop than anticipated.
I like to hire (not just for sales, but for all roles) people who aspire to be at the next level and are out to prove they can step up if given the chance.
3. There are different types of sales people; mavericks often work best early on. I wrote about the four types of sales people here. Mavericks have innate sales talent but are not necessarily good at following a process. This resonates strongly with me because I personally have almost no ability to follow a process.
I think it works well for startups because in startups there are inherently less rules and with customers there is less clarity about your product category. Mavericks thrive in environments like this whereas rule followers may be frustrated by your lack of process.
As you grow you definitely need process-driven people. The leaders will be “superstars” who are inherently great at selling and follow processes religiously. Journeymen don’t have natural sales DNA but can be very effective by following the processes you set up. All of this is covered in the article.
4. As your company starts to grow faster, if you don’t adopt processes you will limit your growth. I wrote about that in my post about scaling sales – arming & aiming: A, B, C’s. and in a related post about objection handling. As your company grows you need to division of labor based upon different skill sets. Erin talks about that here:
“Sometimes reps just don’t like the grunt work – for me, creating proposals always felt like a huge waste of time compared to closing more deals.”
As your team grows you start to segment sales teams into account executives & sales engineers. The latter tend to be more technical and can do a better job at dealing with all of the technical objections that will come up in the sales process not to mention: Talking about integration, building customer-specific versions of your demo and addresses implementation requests.
You may also build “inside sales reps” that handle phone calls the might either be speculative leads to be qualified for the field sales teams or perhaps they handle lower-value deals.
When you’re even bigger you might build sales ops teams that handle: Territory segmentation, sales compensation planning, forecasting, RFP generation and the like.
It is also common to divide sales executives into two types: Hunters & farmers. The former focuses on winning new customers and the latter on growing revenue at existing ones.
In my posts also talked extensively about the integration of marketing and sales. Marketing’s job in working with sales people is twofold:
A. To arm – which means to give the reps all of the sales collateral they’ll need to effectively win sales campaigns. This includes presentations, ROI calculators, competitive analyses and so forth.
B. To aim – which means helping sales reps figure out which target customers to focus on. It’s about helping weed out the non-serious leads from the urgent ones.
I applaud Erin for speaking up against my TEDIC post because in isolation my post isn’t precise enough. I also applaud Tom Eisenmann & Jeff Bussgang for bringing this kind of discussion into an MBA program. Hopefully this post gives a more complete picture of my thoughts on selling at startups.
And finally a reminder: Selling is about listening & reacting and not “pitching.” I encapsulate that in an analogy I had heard years ago. Be careful not to be a crocodile sales person – you know, all mouth and no ears.
I’d be happy to discuss / debate further in the comments section. Happy selling.