Startup Sales 101
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This document provides a general framework for early stage sales at startups. It discusses the importance of proving product-market fit and iterating based on customer feedback. It recommends hiring salespeople who are relationship builders and challengers. The document outlines a hiring framework based on "tours of duty" rather than lifetime employment. An ideal sales candidate is always learning. It also provides overviews of sales strategies, processes, methodologies, and tools that can be used at startups.
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Startup Sales 101
- 1. STARTUP SALES 101 a general framework for early stage sales Miles J. Varghese
- 2. CREDIBILITY ● From “finance guy” ● To “startup sales guy” ● Proud LiveNinja Alum ● Current: Cetus Labs
- 4. “SALES IS A ____________________process.”(That’s tightly tied to Product + Marketing)
- 5. YOUR FIRST SALES HIRE:
- 6. PRODUCT MARKET FIT MARC ANDREESSEN a16z, Netscape MIKE MAPLES, JR. Floodgate Capital ANDY RACHLEFF Benchmark Cap, Wealthfront
- 7. HOW DO YOU GET TO P.M.F ? ● Prove your product’s Hypothesis ○ Great Idea ≠ Great Product ● Build, Deploy, Sell. (Iterate)
- 9. MUST READ:
- 10. SO WHO DO YOU HIRE? ● 2009 CEB Inc study ● 6,000+ interviews. ● 5 Different Profiles: ○ The Relationship Builder ○ The Challenger ○ The Problem Solver ○ The Lone Wolf ○ The Hard Worker ● Which of these would you hire?
- 11. THE CHALLENGER 💪🏾: 53% of customer loyalty is driven by the sales experience - not brand, price, or even the product.
- 12. MUST READ:
- 13. SO HOW DO YOU HIRE? “Employees, managers, and employees need a new relationship framework where they make promises to each other that they can keep.” -REID HOFFMAN LinkedIn
- 14. THE HIRING FRAMEWORK ● Lifetime Employment = 💀 ● Employment is an Alliance (NOT a “family”) ● Alliance Agreement ○ “Tours of Duty” ● Measure for intellectual curiosity ● Sales role play ○ Ex. live sales cold call
- 15. MUST READ:
- 17. “ALWAYS BE LEARNING” 1. TechCrunch 2. TechMeme 3. ReCode 4. Marketplace Tech (APM) 5. WSJ Tech News 1. Bowery Capital 2. SaaStr 3. SalesHacker 4. First Round Capital 5. Founding Sales 1. Lean Startup 2. Predictable Revenue 3. Hacking Sales 4. Fanatical Prospecting 1. SalesStack (Slack) 2. #MiaTech (Slack) 3. Closing Call 4. Rainmaker (Conf)
- 18. SO HOW DO YOU SELL? ● strategy ● process ● methodology
- 19. SALES STRATEGY: strategy = revenue generation model = inbound vs. outbound vs. hybrid inbound = content to capture prospects = to produce qualified leads (MQLs) outbound = proactive sales activity = to produce qualified leads (SQLs) hybrid = Account Based Marketing (ABM)
- 20. SALES PROCESS
- 21. SALES METHODOLOGY: methodology = the “approach” you use = challenger selling = solution selling = consultative selling = SPIN selling = trigger-based selling = social selling = agile selling = ….hit your KPI’s + close.
- 22. EXAMPLE: 1. AUTHORITY 2. NEED 3. URGENCY 4. MONEY 1. Money 2. Economic Buyer 3. Decision Process 4. Decision Criteria 5. Identifying Pain 6. Champion 7. Competition
- 23. MUST READ:
- 24. SALES STACK: sales stack = the tools, vendors, and processes that support sales activities = at scale = internal (SLA) = prospecting = to CRM = to signature
- 25. EXAMPLE:
- 26. CUSTOMER SUCCESS: ● Account Management ● Quota carrying ● “Farming”
- 27. Q+A: thx!
Editor's Notes
- Credibility Financial Advisory background (but hated it) Broke into #miamitech in 2012 (got lucky) LiveNinja 2 pivots Hired sales team Built out processes Generated almost $250K in ARR Closed small, medium, large enterprise deals HP Enterprise; Rebecca Minkoff; Combatant Gent Amazing advisors (Mark Crofton) Won 2015 APAC Citi Mobile Challenge (won the right to pilot) Octopi team now (Why?) Co-founders EE #3 Helping lead sales and marketing
- WE’LL BEGIN WITH THE FAMOUS QUOTE: And I’d like for you all to fill in the blank for me on this - SALES - IS - AN __________. WRONG! Sales is a set of processes
- I like to think that it’s a set of repeatable processes with a human component on top Engineers & Sales leaders make awesome CEOs (not to downplay anyone else’s ability) That’s tightly tied to product and marketing: A product by itself can’t sell It needs to be marketed Marketing delivers the right messages to sell But how do you know marketing is delivering the right messages? This is where your first sales hire comes in..
- Most important thing: YOUR FIRST SALES HIRE WILL ACCELERATE YOU TOWARDS PRODUCT MARKET FIT Don’t expect someone to come in there and automatically start closing deals. Doesnt work that way. PMF is where you have the optimal mix of: Product and Marketing And the business development To produce repeatable sales & growth. Getting there is difficult though 90% of startups fail Most never find PMF or think they have it and DON’T
- Marc Andreesen of a16z said it best market is the most important factor in a startup's success or failure WHY “ In a great market -- a market with lots of real potential customers -- the market pulls product out of the startup” Mike Maples, Floodgate Capital: PMF is a tango The market leads The startup follows Andy Rachleff Rachleff's Law of Startup Success: The #1 company-killer is lack of market. How he puts it: When a great team meets a lousy market, market wins. When a lousy team meets a great market, market wins. When a great team meets a great market, something special happens.
- You have to prove your product’s hypothesis Just because you’ve built a tool doesn’t mean you’ve solved the problem NOR that you have found the right solution You must know the problem intimately The only way you Market Needs to “BUY” into your solution And that needs validation You have to clearly solve a problem aka “a pain point” How do you know the problem? TALKING TO THE CUSTOMER THIS is the job of Sales “LATHER RINSE REPEAT”
- STEVE BLANK Eric Ries’ professor. Customer Discovery focuses on testing hypotheses and understanding customer problems and needs – in front of customers – by the founders Customer Validation is where you develop a sales model that can be replicated and scaled Customer Creation is creating and driving end user demand to scale sales Company Building - transitions the organization from one designed for learning and discovery to a well-oiled machine engineered for execution GROWTH!
- BY Mark Roberge CRO of Hubspot ...who took the company Public from $0 to $100MM in Revenue SCALING LEAN by Ash Maurya
- CEB Inc. Public company That specializes in research, global best practices, and consulting. 2009, in the peak of the recession sales leaders were curious how some of their reps continued to crush quota When most were not What they found were that sales professionals fit one of five profiles The Relationship Builder - consultative, builds advocates The Challenger - different view of the world, pushes customer The Problem Solver - detail oriented, reliably responds to stakeholders The Lone Wolf - follows own instincts, hard to manage, but delivers The Hard Worker - self-motivated, doesn’t give up Question: Who of these would you hire?
- ANSWER: THE CHALLENGER! 40% of high sales performers primarily used a Challenger style More than 50% of all star performers fit the challenger profile in complex sales High performers were more than 2x likely to use a Challenger approach than any other approach Only 7% of top performers took a relationship- building approach.
- BY MATTHEW DIXON AND BRENT ADAMSON
- CEB Inc. Public company That specializes in research, global best practices, and consulting. 2009, in the peak of the recession
- The traditional hiring model of “lifetime employment is dead” Companies can’t afford it New hires don’t want to Employment is an ALLIANCE Not a family - You wouldn’t fire your family members. Finite terms and clear expectations Maximize company’s value Maximize the employee’s development And “market value” afterwards Reid’s model for linkedin includes 3 “TOURS OF DUTY” 1. Rotational (2-4 years) 2. Foundational (5+ years) 3. Transformational (forever) And you have to screen for intellectual curiosity Role related Ask “what are the top 3 authors they admire and why” Sales Role Play Have them tell you what they think the best sales process would be Then have them execute on it Even a call!
- THE ALLIANCE By REID HOFFMAN (Co-founder & Chariman of LinkedIn) (just sold to MSFT for $26B)
- So now you have a better picture of who that first sales hire ought to be - Someone who is passionate about the cause yet motivated by money Who’s a “challenger” And Intellectually curious. At OCTOPI one of our values is “ABL.” Always Be Learning This is someone who loves to consume content And constantly seeks to improve his or her expertise
- You want someone who Tech news and industry trends Who reads books Is an avid podcast listener, Blog reader (reading, writing, AND commenting) And connects with her sales peers
- Not one-size-fits all Earlier stage companies need to be optimized to win new accounts What stage is your organization in the startup lifecycle Seed vs. series vs. IPO And the MARKET How complex is your sale + how sophisticated is your buyer Strategy Hierarching way you’re going to achieve your revenue goals inbound vs. outbound vs. hybrid (account-based marketing - ABM) Inbound = typically content marketing & thought leadership Outbound = your cold emailing and cold calling, Hybrid = Account based marketing (ABM) Process The execution of your strategy Will vary based on the model Individual steps to walk the customer “down the funnel” Methodology The “approach” your sales team will take How you execute the different stages of the process
- The revenue generating model your company chooses to adopt Inbound generating content Social presence Own blogs, company blogs Thought leadership To produce MARKET QUALIFIED LEADS Outbound Proactive sales activity Like cold calling and emailing Business development Linkedin inmail Hybrid Serve ads to IP ranges Consume content Enter sales process
- Example from predictable revenue By Aaron Ross & Marylou Tyler Former entrepreneur Current VC at Storm Ventures Marylou Tyler Entrepreneur, Consultant, Speakerr ROSS - invented the “cold calling 2.0” framework 2003 early hire at salesforce Took them to $100 million PREDICTABLY The sales bible Cold emailing vs cold calling at scale
- Methodology is kind of like the approach How you want to execute the process TONS of books Some examples KPI’s = key performance indicators Vary depending on: Role Organization vs. personal
- 2 different methodologies 2 different companies 2 different products
- Represents EACH piece of technology at each stage and their role Typically integrated BUILD your tech at scale Internal How your company will use iit (SLAs + document standardization in Google docs/dropbox) C. EXTERNAL - SLA in this sense is different and what’s more “standard” in the high-tech industry. SLAs are traditionally to promise server uptime, and response time to tickets. You’ll find a lot of different tools.. Prospecting tools List building & Data enrichment (Datanyze standard now but expensive; email hunter & clearbit are the best free solutions) Mail Merge/sales dev tools (Cadence built in; Close.io & SalesForce IQ) VoIP dialers built in ZenProspect CRMs (cost & complexity differ) Bootstrapped options (streak, insightly, zoho CRM) Hubspot CRM free (but they’ll lock you in..) SalesforceIQ if you have a solid budget (later on) All roads lead to sales force.. Marketing Automation tools (activecampaign CHEAP!; hubspot; mandrill as you scale)
- Hit me up if you guys need anything