Disruptive startups with technologies that shake an established market often take in early venture equity—to their detriment.
Of the many activities they then embark upon is the movement toward a “process driven, process centric” sales and marketing engine.
Process is not bad—but it is deadly early in a startup’s lifecycle. The raw startup is selling to the innovator and early adopter—and process, particularly in your sales and marketing will keep you from finding those first customers.
The single most important question in tech startup sales is this: is getting in front of the right person 5% of the sales process or 90%.
No other question matters more, for the most subtle of reasons, because this one question, almost never verbalized, drives the entire behavior of the sales and sometimes, marketing organization.
It is our thesis that getting in front of the right person, at the right prospect is at least 90% of the startup sales process.
The derivative thesis is that if you are in front of the right person, or close to them with a solution that fits a problem, a sales monkey can finish the sale. Countless giant legacy enterprise software firms prove this every day. They put sales monkeys in front of customers who know their products and they run a process anyone could run.
Nothing separates established, legacy mindsets from startup mindsets more than this one question. Why?
Legacy enterprise software firms are already in front of the customer.
Everyone knows Oracle, VMware, EMC, IBM, HP. Thus, for them, getting in front of the right person is no big deal. They just call and make an appointment. How hard can it be? They have processes to measure every step in the sales cycle. Sure, process selling does not find the early adopter—it finds the person who knows who you are and is ready to move.
Try that “process” with a software product that is underfunded, has zero name recognition, when you do not even have the detailed lists of who the right person might be at your prospect. Here, sales process will kill you—process and imagination are opposites—in fact lots of process kills off or drives off imagination.
Just try cold calling your way into a place where you are unknown—you will have hit rates lower than junk mail for high net worth individuals.
So for a raw startup, getting to the right person is no trivial exercise. It can be literally 95% of the effort—measured in dollars, or time, or any other yardstick.
Obvious you say. Sure, when it is explained this way.
So answer this: why is well over 95% of sales training at startups focused around parts of the sales process outside of the skills necessary to find the right person?
Why are well over 90% of the steps monitored in the CRM system around processes AFTER the key person is found?
Why do so many startups use Hubspot demand gen spam machines when what is needed is surgical precision both in message and tailoring it to just the right person? A true quality versus quantity tradeoff.
Why is there so little focus on territory level business development—recruiting boutique solution partners and ecosystem partners who are the trusted advisors for the prospect and can take the startup rep in the door.
Why, during almost every interview, is territory demand generation management not even touched upon?
Firms often have candidates give a sales presentation or some other later step sales cycle exercise. Why not require a detailed presentation on how to develop a territory, the 90-day plan launch plan?
How many times have you read about the ridiculous interview technique of “….here, sell me this pen.”
Why not measure just how a new rep would find a customer without a reference, without a marketing department, without a spam machine?
A few years ago I worked with a startup IT transparency firm, with a new, innovative product that was hard to explain and did not have a single reference in Texas and surrounding states. To my astonishment, their sales management was 100% process focused.
Sales training was literally days of presentation practice–waterboarding sales training. The head of the sales engineers gave lectures on useless trivia like the buyer’s limbic brain waves. Every other quarter, the entire sales team was crammed in a room for a week for more and more product training even though the product never changed much.
That is where I learned the secret.
I had not wasted my time on sales process. I built partner relationships and they were taking us into more and more new opportunities. I thought sales process was useless if you were not in a sales cycle. They disagreed.
I recall at one point, they came to me and said nobody could handle the number of deals I was managing. They could not map my “process” to their rigorous 7 steps. Yet, although they had 17 reps, I had personally, with zero in-territory marketing, developed 50% of the pipeline of the company.
At the end of the year, my region was the top region both in the company and later in the history of the company.
And their process reps? To date, almost 500% turnover. Almost nobody makes quota. Their financials show that they must spend 60% of their revenue on sales and marketing. The company has not turned a profit in 8 years and has had public devaluations of their equity. The founders and VCs are desperate to unload. A recent IPO is almost 50% below the originating stock price—with the hottest stock market in history.
But they have great sales processes. They can tell exactly where they are: NOWHERE
So now you know why the earlier question is the single most important question for any startup.
And pray your competitor is process driven while you destroy them with creativity and imagination.