Most technology startups seem to be funded by product people or business people. Specifically what is often not in the DNA of founders are sales skills. Nor do they exist in the investors of early-stage companies.
The result is a lack of knowledge of the process and of sales people themselves.
My first startup was no different. I had never had any sales training so everything we did for the first couple of years was instinctual. While we did fine learning on the fly, it turned out that a lot of what we did was wrong.
As we grew into several millions of dollars of sales per year it was no longer acceptable to “wing it.”
So I did want any rational person who wants to improve does – I hired a coach. We focused together on improving our sales methodology, our training and our comp plans through a larger than life ex country manager from PTC named Kai Krickel. He taught me much – most of it unconventional. Most of it worked and his philosophies have proved enduring to me.
His business was called TEDIC – The Excuse Department is Closed. That mindset always stayed with me and even rung true at the time. Excuses. Whenever I heard why we didn’t feel a sales process at an important customer was going well (or if we lost) I would get involved myself. Invariably the reasons I was hearing why we weren’t well positioned versus my own perception were different.
I boil it down to this: sales people are sales people. They are the lifeblood of many companies yet they are different than the traditional technology startup DNA so the ways that you hire, motivate, compensate and assess performance of these individuals will be different. Obviously to understand a “class” of people you have to make broad generalizations. Here are mine.
Are motivated by cash. Founders think in options. Don’t confuse the two.
There’s an old joke in software development, “How much time does it take to design software?” Answer: As long as you have scheduled for the design phase.
I know. Not funny, “ha, ha” but pretty apropos.
If you’ve been involved with a number of software projects you already have an intuitive sense for this. We’ve all been involved with projects that seem to drift and drift and make progress. There’s a healthy balance between allowing a design team to dream up functional requirements, talk with customers, analyze competitors and for technical projects – research the latest cool-kid tools to play with.
Design with no constraints becomes a research project.
You see there is a creative tension along the spectrum of time and scope. If you pull too hard at the scope end of the chain your time drifts. If you pull hard at the time end of the spectrum you end up shipping inferior product.
If you’ve watched any industry in the last 20 years where technology has begun to transform how the industry works the results are always predictable driven by what Clay Christensen appropriately called “The Innovator’s Dilemma” (one of the most influential books that changed my thinking about markets).
Young startups claim they are going to change the world, large companies that dominate that sector scoff at how low quality these new entrants are, until like frogs boiling in water they come to the realization that “this shit is real.” The next step is the industry tries to fight back.
TrueCar is the first ever Internet service that tells you exactly how much other people in your area paid for the car you want to buy. You enter your make, model, trim & year and out pops a price curve of purchases in your area and in most states you will then be offered a fixed price to purchase that car.
One of the hardest things for most entrepreneurs to know is how hard to push in situations where people tell you “no.”
But then again most entrepreneurs fail. There is that rare breed that doesn’t accept “no” for an answer. It is impossible advice to give because there is such a fine line between being persistent and being annoying and it’s something you probably can’t teach. I often describe “chutzpah” as being able to skate right up to the line of acceptability without crossing over it.
And being persistent I believe is the most important attribute for success in an entrepreneur (assuming of course that you have all the other requisite skills).
Years ago I started using the term “politely persistent” to remind people that you still need to be likable even if you have gumption.
I’d say less than 20% of of entrepreneurs fit into that bucket.
Of course at one end of the bucket are entrepreneurs who are persistent but just aren’t polite.
I become a venture capitalist in September 2007 – exactly 6.5 years ago.
I spent my first year developing proprietary deal flow and learning the business and then the Sept 2008 / Lehman Bros collapse / financial meltdown happened.
As a result I didn’t write my first venture capital check until March 2009 – exactly 5 years ago. That company was Invoca, which just announced a $20 million fund raise led by Accel.
I remain a huge supporter and am very proud of our accomplishments and hugely optimistic about our future.
5 years ago. It turns out it actually takes time to build a high-growth business with differentiated intellectual property and roll out large, enterprise-class marketing solutions. I remember a few years ago people (LPs mostly) used to ask me why I didn’t have any realized returns to show.