Uploaded byBryan Starbuck
STARTUPS: Bootstrapping Sales Teams
This document summarizes a talk about avoiding mistakes when starting a sales team for a pre-revenue startup. The biggest mistakes are 1) not having the founder achieve the ability to sell before hiring salespeople and 2) hiring salespeople too soon before establishing a successful sales process. The talk recommends the founder close 12 sales themselves first to learn the sales process before hiring a rep, and to use metrics to ensure sales and marketing costs do not exceed first year revenue before scaling the sales team. It also advises being cautious of full-time VP of Sales costs if revenue does not increase enough to cover their salary.
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STARTUPS: Bootstrapping Sales Teams
- 1. Startup’s Biggest Mistake! ! with SALES TEAMS! With a focus on Bootstrapping or Seed Stage! This talk is avoiding the mistakes when taking a pre-revenue startup and spinning up the “fly wheel” of the sales team.! Speaker! Bryan <at> Empower.me! Bryan Starbuck! http://www.Empower.me! CEO & Co-Founder – Empower.me! We are an online learning and rewards system gives teens - Former CEO of TalentSpring (Acquired 2010)! opportunities to earn extra spending money from parents for - Former Engineering Manager! doing regular chores and accomplishing learning goal.! Linked-In: Linkedin.com/in/bryanstarbuck! !
- 2. This talk isfor B2B SaaS Inside Sales! ! Startup Sales Strategies:! ! “Inside Sales” ß Most B2B startups! ! Field Sales! ! Expensive! ! Corner-case sales! ! Can build bad patterns! ! Channel Sales! ! eCommerce ß B2C and self-checkout! ! “Tele-Marketing” ß Slimy low priced Inside Sales teams are needed when the sale are ~$5k to $60k per customer. Field sales are generally $100k+ sales! per customer. Credit cards (eCommerce) is great a company can make many transactions at a much smaller price point. Most startups are “inside sales” and this talk focuses on them. Startups make the mistake of going to startup events to try to network to people to make sales. Profitable requires staying behind a phone, calling good leads in the CRM with 30 to 60 calls per day. Then a call to a lead can setup a 30 to 60 min meeting over GoToMeeting later if they are interested and are a match.! Slide 2! Confidential 2012!
- 3. Biggest Mistakes! 1! Process ramping up! ! Founder not achieving the ability to sell! 2! Hiring! The biggest mistake is a two- sided coin. First is “cracking” the process that it takes to get ! Too soon! your product sold, and the ! Not replacing people! getting a REP to be able to sell enough with that process. ! No Advisors for hiring! This focuses on that issue.! ! Compensation! Slide 3! Confidential 2012!
- 4. PROCESS! To start getting SALES CLOSED! Slide 4! Confidential 2012!
- 5. Founder “Cracking” thesales process! ! Need to get a FOUNDER CLOSING EARLY SALES! ! The Founder knows the customers and the vision! ! Many “mini-pivots” almost certainly needed WITHIN the sales process ! ! This is the “Sales Learning Curve”! ! ! Get ADVISORS! ! VP of Sales advisor with 6 hours a month is ideal! ! Learn Solution Selling, and other sales techniques! ! Founders are normally product people. They normally want to hire a sales person and delegate sales. This is one of the biggest mistakes. Being able to get sales closed almost always requires “mini-pivots inside the sales process”. Telling the story to the sales prospect will require taking an “angle”. The founder doing a sale will find that an angle isn’t working. It often takes the founder to understand deeply their vision and how to change the angle so it connects with the customer. Sales people who have been successful in the past came from companies who already figured how to sell their product.! Slide 5! Confidential 2012!
- 6. Marketing for Leads! ! Marketing == Leads! Get Leads! ! For a Sales REP to turn profitable, they need to have a CRM with so many ! DON’T attend startup networking forleads they can make 30 to 60 calls a day. They need to be very specific to leads! be successful. If the product is sold to sales depts, then the leads need to ! DO for getting leads:! be to managers who have a budget. The sales rep can’t be profitable ! Snipe off of Linked-in! wasting time to talking to people in the marketing dept without the budget. Finding people with very specific job titles is very helpful (like on Linked-In ! Pay eLance or India! with an eLance project). Make sure a sales rep is doing 25 to 60 meetings ! Great website & collect leads! with customers a month, or they need to increase their volume for ! Whitepapers! profitability.! ! Webinars for your industry! ! Linked-in Groups are great! ! Mailing lists (but be careful)! Into CRM! ! IMPORTANT:! 10% to 20% of your time Into Sales Calls with Screen Sharing! getting leads. No more! Slide 6! Confidential 2012!
- 7. Hiring Pitfalls! Slide 7! Confidential 2012!
- 8. Don’t hire toofast! 1 First Founder closes Sales! ! After “Mini-Pivots” in the sales process! ! Qualifying Figured out! ! Can acquire Leads! ! Use Advisors here! 2 First REP Can Close Sales! ! REP Learns from founder! ! Replace REPs if needed! ! REP can close sales! ! Get REP profitable! 3 Scale REPs! ! Focus on VP of Sales! First have the founder close 12 sales themselves before hiring a REP. Use a Board of Advisor VP of Sales (on ! stock only) with 4careful on compensation! tactics. Keep the burn rate low while adjusting the product Be to 6 hours a month to coach on sales and sales pitch. After 12 sales closed, then hire the sales rep. ! Slide 8! Confidential 2012!
- 9. Measure for Successbefore Scaling! ! Enough Leads & Low Effort! ! ! Enough meetings per month! ! Enough Sales Closed! ! High enough Revenue per REP per month! Manage your company to the sales pipeline. You MUST have metrics and numbers for each stage. Model what it takes to be profitable and then identify where you are off the most to focus changes. Is the REP calling enough people per day? Having enough 30 to 60 min meetings? Are the leads the right people? Are deals getting closed? High enough average sales price? Pencil in metrics for being profitable business. What is most broken currently?! Slide 9! Confidential 2012!
- 10. Final Issues! ! Watch VP of Sales costs! ! They may not close deals themselves! ! Their cost without revenue increase can have real negative financial impact – if too early! ! ! Track everything to the FUNNEL and do the MATH at each stage! ! REP is building pipeline FAST ENOUGH to be profitable! ! REP is not having deals DIE at funnel stages – enough to be problematic! ! Sales + Marketing + AcctMngt costs < First year Revenue! ! Customers stay well over 2 years on average! ! Be careful of having to amortizing costs of VP of Sales salaries and “churning” REPs who don’t work out! After a sales rep is profitable, start scaling REPs. Be careful of a full-time VP of Sales, because the costs can be a huge problem. A VP of Sales may talk about growing revenue to cover their cost, but they can over sell that view. A critical strategic decision is when to hire the full time VP of Sales – after 1 REP, 3 REPs, etc.?! Slide 10! Confidential 2012!
- 11. Other Startup Talks! Slide 11! Confidential 2012!
- 12. Talks for StartupCEOs! Other available talks online:! Being the Startup CEO! MBA to CEO! Video: http://bit.ly/KMFX3v! Slidedeck: http://slidesha.re/NtqZza! Slidedeck: http://slidesha.re/NQHtxh! Slide 12! Confidential 2012!
- 13. Talks on SalesTeams at startups! Other available talks online:! 10 minute short talk Long talk on Sales Teams! on Sales teams! Video: <Coming>! Slidedeck: http://slidesha.re/N1WsTP! Slidedeck: http://slidesha.re/LNpPzh! Slide 13! Confidential 2012!
- 14. Other talks forStartups! Other available talks online:! Deciding on the Development Stack! Join as an Employee! Video: http://bit.ly/LVY1E8! Video: <Coming>! Slidedeck: http://slidesha.re/HbyLaK! Slidedeck: http://slidesha.re/OR9sTG! Slide 14! Confidential 2012!
- 15. Other Talks! ! Watch VP of Sales costs! ! They may not close deals themselves! ! Their cost without revenue increase can have real negative financial impact – if too early! ! Slide 15! Confidential 2012!
- 16. Learning More! Slide 16! Confidential 2012!
- 17. Next Steps forLearning (1 of 3)! People often ask how to learn more. Here is the best way:! ABSOLUTE Must Read! Strategic Thinking or Execution! Venture Deals On Amazon! Innovator’s Dilemma On Amazon! By: Brad Feld! By: Clayton Christensen! ! ! ! Crossing the Chasm On Amazon! Art of the Start On Amazon! By: Geoffrey Moore! By: Guy Kawasaki! ! ! Blue Ocean Strategy On Amazon! ! By: W. Kim! ! ! The Lean Startup On Amazon! ! By: Eric Ries! Good to Great On Amazon! ! By: Jim Collins! ! Maverick On Amazon! Other! By: Ricardo Semier! ! ! The Ten-Day MBA On Amazon! The Four Steps to the Epiphany On Amazon! By: Steven Silbiger! By: Steven Blank! ! ! Founders at Work On Amazon! Inspiring Excellence On Amazon! By: Jessica Livingston! By: Michael Schutzler! ! ! ! ABSOLUTE Must Read! Slide 17! Confidential 2012!
- 18. Next Steps forLearning (2 of 3)! People often ask how to learn more. Here is the best way:! Marketing! Other! The 22 Immutable Laws of Branding On Amazon! Founders at Work On Amazon! By: Al Ries! By: Jessica Livingston! ! ! ! ! Full Frontal PR On Amazon! Startup Weekend On Amazon! By: Richard Laermer! By: Marc Nager! ! ! ! Positioning: The Battle for your Mind On Amazon! Don’t Make Me Think On Amazon! By: Jack Trout! By: Steve Krug! ! ! The Strategy and Tactics of Pricing On Amazon! ! By: John Hogan! ! ! Purple Cow On Amazon! By: Seth Godin! ! ! ABSOLUTE Must Read! Slide 18! Confidential 2012!
- 19. More Learning (3of 3)! ! (My) Bryan Starbuck’s Blog on Company Building:! ! http://bit.ly/StarbuckBlog! ! Dave McClure – Marketing Model for Startups: ! ! http://500hats.typepad.com/500blogs/2007/06/internet-market.html! ! http://vimeo.com/26277733! ! http://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version! ! http://www.slideshare.net/dmc500hats/startup-metrics-101-367863! ! More from Dave McClure:! ! http://www.slideshare.net/dmc500hats/why-not-to-do-a-startup! ! http://www.slideshare.net/dmc500hats/do-marketing-its-not-evil! ! Presenting to Investors:! ! http://www.slideshare.net/dmc500hats/how-to-pitch-a-vc-aka-startup-viagra-how-to-give-a-vc-a-hardon! ! Strategic economics of SaaS https://salesforce.adobeconnect.com/_a13852757/buildingasuccessfulsaasco/! ! Startup Marketing: http://howtolaunchastartup.com/2011/06/20/21-must-read-resources-for-start-up-marketing/! ! 57 Things I’ve Learned Founding 3 Tech Startups: http://betashop.com/post/1417413108/57-things-ive-learned-founding-3-tech-companies! ABSOLUTE Must Read! Slide 19! Confidential 2012!
- 20. THE END! Thanks for Listening! Slide 20! Confidential 2012!