Starting Sales in a Startup
High-potential startups are businesses – and businesses thrive on revenue. That means that figuring out how to successfully start selling your product is at the heart of building a successful startup.
Sales are the lifeblood of a startup. Enough sales generates the revenue required to cover costs, ultimately freeing a startup from the need to raise money once cash flow breakeven is achieved. The bottom line is that the sooner and more successfully a startup can begin to sell, the less dilution the founders and investors are required to absorb, and the more attractive the business can become to a strategic acquirer. Are those enough good reasons to focus on the essential process of developing a commercial organization to drive the sales and revenue in a startup? Of course, they are!
Beginning to sell in a startup is a rich topic – and, for the sake of keeping this post to a reasonable length, I am only going to begin to unpack a few key things to consider as you start to tackle the challenge of formulating a successful sales strategy. As an initial focus, while many products are sold through retail outlets, my experience is predominantly in selling complex B2B products with price points in the tens to hundreds of thousands of dollars, so let’s explore some of the commercial launch challenges that abound in that space.
First and foremost, always remember that there is no one-size-fits-all solution to how to sell a novel, innovative B2B product. For any given product, the right strategy depends on the unique blend of many factors, and there can be multiple effective answers. Some of those factors include how transformative the product is; how developed (or not) the market is for the product; the price point and margins for the product; the type of product (physical product, software product, consumable product, etc.); whether the purchase is single-use, repeating, subscription-based, etc.; the type and complexity of the target customers (businesses, consumers); the relative cost/risk of the purchase for the customer; the length and complexity of the sales cycle (impulse buy to prolonged and complex multi-stakeholder sale); and so on. These characteristics and many others will influence the sales strategy and determine how to approach building a commercial organization.
To be ready to sell, you first need to develop a product that people want to buy. To do that successfully, you need to understand your target customer’s needs, pain points, and current solutions (aka the status quo or your competition) to the problem you propose to solve in a better way. In addition to informing your product design, customer knowledge forms the foundation of strategic marketing, which involves developing a detailed understanding of your future customers. You need to identify their beliefs, goals, and needs, which will provide the framework for developing product positioning and value messaging that help your customers make a favorable buying decision. Within the broad definition of your target customers, you will want to explore the specific segments ranging from innovators and early adopters to the mainstream market.
Once you have segmented your target customers, determined who will be involved in making a purchase decision, understood what they currently know and believe, and defined what they will need to know/believe to make a decision to buy, you are in a position to determine how to target those who are most likely to buy at your current point in the market development cycle, and develop messaging and tools that enable you to effectively evolve their beliefs in favor of a buying decision. This may mean addressing questions about the nature of your solution/product, how it might fit into their environment, addressing their needs, providing references about how others like them have solved the same problem, and supplying evidence needed to help others in their organization get on board.
When you are launching an innovative product, you will need to learn what resonates with your beachhead target market. Working out that successful playbook requires strategic marketing and initial business development to secure those first early adopter sales, which will help the pathfinding team develop and test your messaging and tactical marketing deliverables (e.g., website, brochures, performance datasheets, implementation requirements, etc.) to fill out your marketing toolkit. Once you have secured early adopters, converted them into happy reference customers, understood the buying patterns in your target customer segment, and built a successful playbook, then you can begin scaling your commercial organization to execute a repeatable sales process.
Salespeople are part of scaling sales. Typically, salespeople execute well when they are equipped well. They provide the responsive sales strategy execution, objection handling, negotiation, and customer care required to grow sales rapidly. However, if you have not put the pieces in place to equip a sales team, then they become ineffective and costly resource drains. Before you pour on the sales resources, make sure you have worked out an effective sales playbook and have the prerequisites in place to enable your sales team to be successful. Ask yourself: Is the product ready to go? Do you have initial reference customers in place? Do you have the details of the product positioning, features and benefits messaging, and marketing tools worked out?
As you design and then build out your sales team, think about what blend of skill sets you to execute your sales process successfully. A single type of salesperson, organized geographically, may be all you need for some less-complex products and less-complex customers. For more complex situations, you may need to deploy sales teams that can bring different skill sets to the mix to interface with various members of the customer organization. For example, when we were building Accuri’s sales team, we hired sales directors who were experts at managing the sales process and asking for the sale. We supplemented the sales directors with technical specialists, who were scientists who could speak our scientist target customers’ language, help them think about how to use our product, and, in general, geek out on the science aspects of the work our product helped enable. Often, these application specialists were less good at managing the overall sales process. Still, they were great at objection handling and assisting potential customers in understanding how our product could fit into their workflow. The combination of the two created synergistic magic in helping customers with their buying decisions. Sales teams are often appropriate when there are different technical specialties involved, such as a clinical specialist who can speak to the clinical needs and solutions working alongside an IT specialist who addresses the nuances of installation questions, all led by someone who can navigate the organizational complexities, contractual negotiations, and barrier-busting of building consensus around a significant buying decision.
As you move ahead in launching your sales, you will be going through a massive transition for your startup, shifting from a product development focus to a commercial focus. You will determine your market segments, their needs, and getting those early adopters to act. Even as you focus on the initial pieces, you need to be intentionally getting positioned to evolve into the broader market. This transition is a complex, multi-faceted process with innumerable challenges while simultaneously being studded with great opportunities. Let the adventure begin as the moment of truth arrives, and your team can strive to help those people you set out to serve when you formed your startup.
