I had dinner with a Sales VP of an early stage technology company this week and discussed her business and her experience in building the startup revenue stream.
We got down to talking about “the how” of building the sales team, recruiting the channel and generating revenue.
They now have 6 people in sales globally and their resellers are starting to sell their product, although she mentions it was a painful process in getting there.
Cash-burn and Unpredictable Revenue
The problem isn’t lack of revenue as much as predictable revenue; it’s that in one quarter we have a million dollar deal and blow the number out and the next quarter we’re scrambling to bring in $500K….does this sound familiar?
The big problem now is cash-burn and with 40+ people in the company and investors who want to accelerate the growth, she is feeling the pressure.
Slow out of the Gate
“We were slow out of the gate. We have great technology, but it was disruptive 3 years ago and still is. There was no demand for the product and no buying category, so we had to create it, one deal at a time. Since then the smartphone market has exploded and most of our sales now relate to mobile and we are starting to get inbound leads.”
Leads from Investors, Cold Calls, Trade Shows
I asked how they went about generating early leads. “In the first year we relied on introductions from our investors, who are very well respected and connected in the Valley. We also worked our personal connections and found our initial set of customers who validated our approach and gave us really good feedback.
We had a WordPress blog from the outset, although it was all about us and the product, and it wasn’t generating many leads. Targeted trade-shows were useful in generating leads, particularly with OEM’s and resellers. The second year we hired a couple of sales people and started calling who we thought would be high probability customers.”
I asked about how the sales team engaged prospects “Today the sales process starts with a free download of the tools. The sales team will then follow the lead up with a conversation and if qualified a short PowerPoint presentation to stakeholders in IT. If that goes well we then put together a proposal.
When I explained how we help companies to create clarity in positioning and capture the value in using complex products and services for both inbound marketing purposes and for visual storytelling using the WhiteboardSelling method, she exclaimed… “I wish I had done this two years ago.”
- It’s an order of magnitude easier to resegment an existing market than it is to start a new one. Steve Blank
- Selling discontinuous technology to early adopters requires a different sales approach than selling mainstream products. Early adopters have a higher tolerance for risk and are prepared to engage potential suppliers earlier in the buying cycle. The big question for most start-ups with novel technology is, would they find you in a Google search?Click on the image to learn more about the Four Buying Cultures, the IMPACT buying process and view the Webinar, “Why Killer Products, Don’t Sell”
- It’s never too early to start Inbound Marketing. Technology companies can easily put together Websites and link them to social media, but too often I hear we’re doing all this Marketing 2.0 stuff, but nothing’s working.
Using an inbound marketing strategy on an integrated inbound marketing platform like HubSpot can accelerate growth, create mindshare in months and typically produce 5-times the inbound leadflow within the first 6 months.
- Kill PowerPoint. You learn nothing when you are presenting. In a start-up every sales call is a learning opportunity. Get everyone in the company using whiteboards to tell your story. Figuring out your value proposition early (even if it’s a hypothesis) and creating whiteboard stories will help win new clients, recruit new employees, win new investors and recruit partners.
- Putting it all together.