There is something called the philosophical fallacy of composition. It goes something like this: the hotel is large, therefore it must have large rooms.
This obvious fallacy has an enterprise sales rep equivalent: the sales rep worked for IBM, HP, Oracle, SAP, VMware, EMC and did really well, so they must be great tech sales people.
This is a mistake many startup CEOs made—and it has cost them dearly.
The terrain of the raw startup could not be more different from that of one of these massive marketing machines. The required sales capabilities for the raw startup do not appear anywhere near those people who made their careers at these behemoths.
Large software firms hire order takers. They want homogenous sales types who loyally show up, don’t ask too many questions, are happy to go to endless forecasting meetings and walk the mediocre mile every day.
Their success is almost entirely based on what accounts they are assigned. Given great accounts who are in a buying mode, they do well. Not so great accounts–they move on. Virtually zero individual effort required.
Large software firms do not want mavericks; they do not want people who challenge the organization—particularly the mild marketing departments that cost them millions. They are interested in steady mediocrity, day after day.
While that gets their hair all messed up, it is completely true.
HP, VMware, EMC, Oracle, all of them hire people who need to have the customer know their company before they can get in the door. It has been decades-if ever-since one of these reps had to find a new customer, navigate to the right person, get in the door, explain what they did, why it is different from any other vendor, then get set up for a first order against competition.
There is nothing wrong with this. There are companies with products everyone knows who need these types.
Most of what they do can be moved to VARs who bring in low-end sales types who mastered order taking at half the price. Over time, this is exactly what is going to happen as more such firms recognize they do not need these vastly overpaid sales forces who essentially take orders.
These reps are the software equivalent of a waitperson at Cheesecake Factory. The waitperson helps a hungry customer traverse a 12-page, unfamiliar menu. The customer will buy something, the rep (waitperson) needs to help with the selection. Really great reps like this can write an order with either hand.
The customer walks in the door—zero prospecting required.
That is what VMware reps do with the incredibly complicated Enterprise License Agreements (ELA). They get paid to work with an army of internal bureaucrats and find ways to extort money from customers, often selling them products they do not need, otherwise their maintenance costs get raised significantly.
This is an obsolete model. The industry is realizing that today’s customer, looking at a NEW offering, is 70% of the way to making buying decision BEFORE they want to see a sales rep. So the end of order taking is on the horizon.
This order taker’s job is to speak with someone who already knows their company, has a budget in place for their company, needs help on how to construct a multi-product order, how to navigate a set of complex buying rules.
These reps have skills in these mundane areas. None of these skills is relevant to the raw startup.
Here is what they do not have.
A story makes the case. I was speaking with a CEO for a raw startup who hired 2 former Accenture reps, paying them $175,000 bases, full benefits, guaranteed draws and serious travel expenses. When we spoke, he seemed exhausted and I asked him a couple of questions.
Here is the conversation:
Me: “So how are your Accenture reps doing?”
CEO: “This sucks. I am into them for almost a million dollars after 14 months, and they have not landed a single deal. They do not even have a serious lead. All they do is fly all over the place and tell me they need new product features. They never sell a thing.”
Me: “And do they complain you do not have a strong marketing department and they are not getting leads?”
CEO: “How did you know? That is all they talk about. They cannot operate without a massive marketing department, which I do not have.”
Me: “Does it bother you that you are in the office at 7:00 AM and 7:00 PM trying to make something happen and they swing by around 9:30 and are out by 3:00 or 4:00?”
CEO: “You’ve been here, I see. Yes, and I gave them a lot of equity—really wish I hadn’t done that.”
This conversation happens all the time. The raw startup rep needs skills that are just as much marketing as sales. The first thing a great rep does is not fly around prospecting. They prospect incessantly (no leads expected) using local trusted advisors to the key decision makers. Thus, they can get to just the right person without an expensive, dilutive sales cycle.
They build killer, one or two-line pitches that explain exactly what problem the product solves or market it opens. They do not spend time qualifying in—they qualify OUT. They are about business value, not product features.
That means they align only with firms who have a clear need, have a fundamental understanding of the product, have an innovator or early adopter in place who will do something, not just listen to endless demos. And when they have that person lined up, they will get a deal done.
They find needles in haystacks.
In many cases, you do not have to pay them unless they close something.
Try that with a VMware or IBM or HP rep.