“Sales” Is Not a Dirty Word
The Importance of Sales for Startups
If you’re the CEO of a startup, you’re a salesperson. In fact, you may be the only salesperson the company has.
And you are a sales person from day one. Even before your company has a finished product to sell, you’re “selling” stock. You’re “selling” grant funding sources on the importance and feasibility of your project. You’re “selling” co-founders on your vision and prospective employees on why they should take little or no pay for long hours and crummy working conditions.
In addition to everything else you’re selling, you will likely be selling your product before its done. You may not be able to secure a purchase order for a product still in development. You may be able to get a letter of intent, a beta customer agreement, or at the very least some other useful information from customers that will assist in prioritizing a feature set or in some other way positively impact the growth of your company. Market validation from a customer, even as limited as a letter of intent, is often one of the most valuable things you can have when talking to potential investors.
Startup Sales Demonstrate Viability
Eventually, if your startup is ever to become a real company, you’ll need real product sales. Sales generate revenue, which is how most start-ups (at least those that aren’t in biotech) are judged. Sales produce non-dilutive cash. Sales tell you about your sales cycle and customer support needs, informing your business model. Once the business is fully developed, your cost of sales will be critical to your profitability.
Many tech CEOs don’t particularly enjoy selling; you don’t have to be Jeffrey Gitomer, but, like it or not, sales is part of every startup CEO’s job.
Especially in the early days, sales cannot be outsourced. Startups usually have to have sales to be able to afford great sales talent, which means that in the beginning, the CEO has to lead the sales effort. There are many reasons this is good:
- Leading the sales effort enables the CEO to get a real understanding of the sales pipeline, process and cycle for the business, not to mention a much better understanding of the customers’ needs and perspectives, as well as competition in the market.
- Leading sales teaches a CEO that only “yes” means “yes.” Entrepreneurs are nothing if not optimistic. They have to be. But they also have to be realistic. I once got some great advice from Ken Austin, the co-founder (with his wife Joan) of A-dec, now one of the largest providers of dental equipment in the world. Ken said that when you’re starting a business, no one wants to rain on your parade and everyone wants to be supportive. No one wants to tell you “no.” But the real test is: Will they give you a purchase order? Anything less than a purchase order is really just a polite “no.” “That’s interesting” doesn’t mean “yes.” “Maybe” doesn’t mean “yes.” “Free trials” don’t even mean “yes.” “Yes” is the only thing that actually means “yes”.
- The CEO’s job is to identify people who can actually say “yes”—people who are willing to be an early adopter and have the authority, money, and/or influence in their organization to complete a purchase. The startup CEO has to find a way to get to that decision-maker, through the relentless use of advocates and referrals, or through fearless cold calling. Once there, the CEO has to learn and understand the customer’s needs and problems, and honestly help the customer understand how the startup’s solution can help.
- In the early days, the sales process is often as much about getting the prospect to believe in the CEO and the vision as it is to believe in the product itself. It’s about listening and building trust and earning the right to ask for a prospect’s business because you take the time to learn their trade and understand their problems. It’s about taking the time to figure out how your company’s solution can help that customer’s business avoid cost, become more efficient, gain market share, or better solve problems for their own customers. And at the end, the CEO cannot be afraid to ask for what you want and need—a “yes.”
- After you’ve signed up a few customers this way, you’ll come to realize that selling isn’t at all about convincing a customer to buy something they don’t want or need. It’s about helping a customer solve problems to improve their bottom line. And when you have the resources to make a hire to head up sales, you will know what you are looking for in a sales leader and you will recognize the skills because you’ve done the job yourself.
“Sales” is not a dirty word. In fact, for any business, not just a startup, it’s one of the most important words there is.
What have you learned about doing the job of sales? We’d like to know.
