Remember this simple formula if you are new in enterprise sales!
The journey for technology startup founders — from trading cards as a child, to the efficiency of everything-as-a-service.
How many of you were into trading cards as a child? Every generation has its preference — some were about baseball, mine were cars and planes, my kids have Pokemon cards and my nephew’s are all about soccer.
Such trading is a common early way to develop sales skills. ‘I trade you this card for that one, so let’s talk about why you should do this deal with me.’
Even at a young age, some children realize that it is not just about the quality of the cards, but the type of mindset you have.
Have you seen those kids who start the trade with the expectation to win?
Firstly, they are very knowledgeable about the cards, what type of cards are more valuable, and why.
Secondly, they are fearless!
And, even if one trade does not work out for them, they know there’s a line of other kids standing behind that they need to get to. They soon realize that when a deal is stalling, close it out, and move on to the next. They know they may trade another card with that other kid the next time around. They move on, unfazed by rejection while figuring out in the back of their mind why that specific trade did not work out.
Some kids can be very cut through.
They know that if another kid shows up with a sizable amount of cards, it is because they’re ready to trade. Direct, and getting down to business! They may not know it yet, but such a mindset will be a great asset if they move into sales later on.
If you are new to sales like many of the first-time founders of enterprise technology startups who I often work with as a VC, I urge you to get that mindset of a kid trading cards. You may have excellent technical skills, but if you’ve decided to become a founder of a new B2B startup, get ready to sell one-on-one to fuel your company! There’s no shortcut!
Once you’ve got the mindset, start hustling to build a pipeline of prospects and close deals!
During my engineering studies, my friends and I were all excited about the user interface improvements the latest web browsers provided in the mid-90s.
Our University was at a ten-floor tall building with two high-capacity elevators. Though we’d heard horror stories about their malfunctions, I had an irresistible attraction to go to the 7th floor.
There, sat the only computer room connected to the internet!
It had around twenty seats ready to interact through green text on a black screen.
We had a twenty-minute time limit before we had to get in line for the next slot available.
Quite soon, Opera and Netscape Internet browsers were launched — going from green-on-black to a full palette of color was exciting!
Once we had our very own exclusive PC at our International Students Club, we coded an application to organize a marketplace for exchanging internships among engineering students worldwide. I’ve many fond memories of landing corporate sponsorships and convincing a few small local companies to take an international student intern for a few months at their company. That was my way to get into an internship abroad for myself.
I was surprised by how much I enjoyed this “sales” activity and realized that one needs to put “activity” above all else. As an engineer, we are trained to work “smarter, not harder”. Well, sometimes you just have to grind. Activity, activity, activity!
Through activity, you get feedback and have the opportunity to refine your approach to addressing customer pains or gains. My motivation was to score enough points to have priority on the selection of internships abroad. I was high enough on the priority list to choose my preference for Germany. Wunderbar!
As a basis, quantity has a quality all its own. Then, for the sake of your own efficacy, categorize the right prospects through iterative questions like:
What is the problem this prospect has? Who has that problem in their company? What are the costs associated with the problem? How do people currently solve this problem? Why do current solutions fail? What has or should change to enable a new solution? How would this new solution work in that organization?
Modern sales is about seeking inefficiencies in the world, finding qualified prospects who have a business pain, but don’t know about the solution or need help to find it.
How to reduce “friction” in sales?
friction [ frik-shuhn ] noun
1 surface resistance to relative motion, as of a body sliding or rolling.
2 the rubbing of the surface of one body against that of another.
3 dissension or conflict between persons, nations, etc., because of differing ideas, wishes, etc.
Friction, in a physical sense, is the resistance caused when one object interrupts the flow of another. It results in a slowing of motion, and often excess heat.
In a sales context, the definition is not far different. Friction is when anything interrupts the flow of the sale. It results in a slowing or even stopping of forward motion and can lead to conflict. When the cause of physical friction is removed, flow returns, and heat dissipates. Likewise, when the causes of sales friction are removed, flow returns and sales are made more quickly, smoothly and successfully.
The most likely opportunities to reduce friction in any sales process can be found by asking:
- How can I help the user get more comfortable with the product before the decision-maker fully commits to the purchase?
- How can I help the decision-maker to purchase the product as smoothly as possible considering his Total Cost of Ownership?
In the digital world, one way to reduce friction is transitioning from software-as-a-good to software-as-a-service (SaaS).
For example, for software solutions addressing the regular business user’s needs, accessing the product in a self-service mode for a limited time or under a freemium strategy with reduced functionality allows the product to get an internal champion to endorse the product for broader adoption. You may hear this type of strategy referred to as Product Led Growth or Growth Marketing.
Such a strategy creates traction through a self-service process whereby salespeople are usually activated when there is already a wide usage of the tool paid through employee individual credit cards. Then, it is in everybody’s interest to engage in an enterprise-wide agreement.
For mission-critical systems, we usually rely on salespeople in front-loaded interactions with the customer. A Proof of Concept (PoC) in a reduced scope is usually the way to demonstrate the solution’s fit to the problem.
Fortunately, the characteristics of cloud-based applications allow the deployment of the Proof of Concept to be quite nimble. The key in any PoC is to set the criteria that would trigger swiftly moving from pilot to commercial deployment. Otherwise, welcome to ‘pilot hell’! Do not forget to clearly define with your customer when you move from pilot mode into commercial production!
SaaS helps reduce friction for user adoption, it also helps reduce friction for wide-company commercial purchase by the decision-makers at the customer.
Think of a SaaS solution as a “pay-as-you-go” subscription-licensing model that allows the company to use the vendor’s software. The customer’s company is paying for a service from the vendor. Since the customer does not own the software nor is allowed to download the software, the SaaS solution is treated as a service — which is considered an operating expense by the generally accepted accounting principles (GAAP).
The other characteristic of SaaS is that it allows the customer to treat the purchase as an operating expenditure (OPEX) rather than a capital expenditure (CAPEX). They have different financial and tax implications, depending on how the decision is made by the customer.
SaaS solutions have a lower barrier for entry for the customer. This allows a company to implement a lower cost, smaller scope, and increase as the demand increases. If planned correctly, this will correlate directly with the ROI generated by the SaaS solution, allowing the customer’s organization to demonstrate success without a large investment.
A SaaS solution can be implemented very quickly, reducing the initial cost of implementation and providing the company with faster time-to-market.
But what about the physical world? Hardware-related products?
The physical world has progressed as well. To address the first opportunity, you have, for example, sample programs for components of relative low purchase value but repetitive along the time — think a component that goes into a machine manufactured by an OEM — while in the one-time purchase of high-price equipment one can design creative return policies — think of the OEM selling to an end customer. To address the friction on price, we are already accustomed to seeing leasing and renting opportunities but even more innovation is coming with the as-a-service concept: robot-as-a-service, energy-as-a-service, platform-as-a-service . . . stay tuned!
So, this is the challenge I’m giving you. What is the business model you will establish in your company to have lower friction during the sales process? Or, if your company is already up and running, what changes could you implement to reduce friction?
Final thoughts
Business models that transition from selling goods to selling services, have given an exciting spin to enterprise sales. The design of a business model will drive how frictionless your product’s value is delivered to the customer to solve his or her specific problems.
However, enterprise sales is still a physical activity. You will need salespeople. And in the early stages of the company, you will be the first salesperson in your company.
So, what is my key message if you are a technical founder new to sales?
Whatever your business model is, retrieve your child’s mindset when trading cards, and be ready to grind sales out in your new venture.
Your primary role as an enterprise-focused startup CEO is to get your company from $0 to $2,000,000 in revenue sales. Until you eclipse your first million sales, you need to wake up daily as the Chief Revenue Officer, even if you employ one! Then, and only then, you’ll be on the right track to turn your technology or product into a company.
No sales, no company!
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About Albert Vazquez-Agusti: Since I was a teenager working with my father at his engineering office, I’ve seen firsthand how technology and innovation impact our work. We have reached a crucial acceleration point where technological change, education, and inequality are involved in a kind of race. I’ve come to realize that the real bottleneck to taking advantage of innovation is the lack of relevant managerial skills to impact business models through new technologies. That’s why I promote the development of people and organizations to support technology adoption to solve small to big problems based on my experience in Fortune 500, SMBs, Private Equity, Start-ups and Venture Capital organizations.
