A Raw Startup Needs a Franchise Player, Not a Sales Force

Franchise Rep Is A True Rockstar

Many raw startups get some VC funding and immediately apply steroids to their sales efforts. They hire those 3-5 former ERP reps who have no business even visiting a startup, and off they go.

These reps usually fail unless the product sells itself. In those cases, they will look like heroes, but that is the 1% so we need not deal with it here.

There are some raw startups, however, who go a different way. They do not focus on hiring 3-5 reps and pray they find a few deals to justify the investment. These startups find those few “franchise players” who can really make something happen.

What is a franchise player?

He or she is a salesperson who changes the trajectory of a company by bringing in deals that are so large, or imaginative, or repeatable that the company moves to a higher level. Some such deals become a non-dilutive financial event where the startup gets enough revenue to skip a VC event.

Other such deals might be a partnership where the startup gains a national sales force and skips a dilution event, thus saving the equity for the owners, where it belongs.

A franchise player is never a sales rep from one of the large, ERP and traditional software firms.

A franchise rep is just as much a marketing genius as a sales pro. His or her marketing mindset is around the art of positioning the product to a unique need, perhaps in a way the startup never imagined.

Positioning is everything.

If a new product is positioned to its most urgent need, sales will follow. If not, the startup needs a massive marketing engine to make a brick fly and they pay for it with dilution after endless rounds of financing.

Franchise players are very rare, less than 1% of all tech reps could qualify. They never work for big companies. Big companies suck the life and imagination out of their people, so by definition if a rep comes from one of those large tech companies, they are a farmer or maybe a hunter, but not a franchise player.

Franchise players display massive amounts of activity coupled with innovation. They do not mindlessly make calls. Rather, they constantly network into companies where their solution may well be positioned to solve a major problem or open an undiscovered opportunity.

How do they define perfect positioning? There is no other product, at any price, that can get the job done, but their product. When they find that positioning, and the customer embraces it, they are home.

Why are franchise reps so vital to a startup?

A raw startup must avoid VC dilution at all costs. There is nothing worse than giving up equity for cash that is spent on useless sales and marketing. Useless is as useless demonstrates. Time after time we see raw startups hire sales teams that cost more than they deliver.

These startups go through several VPs, each with his or her own team. They never really take off and the dilution of a C or D round is simply fatal. There is nothing left for the founders. By this time, the founders have departed in silent agony and disappointment.

There is a better way. Find a franchise rep.

Find one who is willing to work for no salary, expenses only, and who gets a big part of what he or she kills.

They are out there and when you find one, they will introduce you to others.

Save your equity. You earned it.