How to Sell as a Startup Founder
The cheapest and best capital to fuel your startup is revenue
My first job in sales was an accident. I was a software engineer working in a remote office in San Francisco. This office was mostly for sales and on occasion I would help the reps with demos or technical questions from customers.
Over time though, one by one, sales reps resigned, eventually leaving just me alone in the office. When the VP Sales came out to the West Coast, I thought it was to hire more salespeople. Instead it was to hand me the bag to sell!
I was not a natural. Over time, lots of mistakes, and a few important mentors, I picked myself up and found my rhythm. Eventually I was got good enough to lead sales teams, mentor others, and launch a community for B2B sales.
This helped immensely when I launched my own startup. While we took plenty of wrong turns in the business, including outsourcing all of our development, one thing we did well was sell, bringing on several Fortune 500 customers.
I thought building the tech was the hardest part of a startup. As I talked to other startup founders though, they said the product was easy. These were engineers and product people that could build and iterate fast on customer needs. Their biggest problem was actually getting any customers.
Technical founders often dismiss sales. As Peter Levine of A16Z said:
“As a former software engineer and CEO, I used to hold the “engineer-centric” view that sales is not a critical function in an organization.”
He observed that the best startups not only build great products, but also have great sales capabilities.
Conversely, many startups without a disciplined approach to sales struggle to achieve growth. They run into all sorts of mishaps from no pipeline to bad contracts to fancy sales hires that generate zero results.
Founders have a lot of misconceptions about sales. Some think they can pick up sales by reading Challenger Sale or Predictable Revenue. Some believe you can just outsource sales to an agency. Then others cobble together sales hacks and automation tools to spam the world.
The only way to learn sales is to do sales. For early-stage startups, that means that the founders have to roll-up their sleeves and sell from prospecting to closing deals. But how can founders do this without sales experience?
Over the years in advising and mentoring startup founders, we found twelve core sales skills that every founder needs to know in order to have the foundation to navigate B2B sales. We outline these steps below with links to blog posts (find the entire series here) with more practical advice to develop each skill.
Adopt the mindset that you can sell. You already possess the energy, resilience, and confidence to sell since you already took the boldest leap of all to start a company! Use visualization exercises to walk through customer conversations and always practice your pitches and demos.
The foundation of sales is tapping into customer motivation. No one buys without having a need, which in turn motivates people to take action. The Motivation Matrix maps these motivations for each type of person (aka persona) you will engage with during the sale.
Revisit and hone your target market. Selling to everyone leads to wasted time. Use lean startup principles to interview prospects in your markets to better understand solution fit. When you identify your Ideal Customer Profile (ICP), you can prioritize your prospecting efforts.
Take time to craft the right messaging. For messaging to attract the interest, it needs to be personal, relevant, and actionable. Use outputs from the Motivation Matrix and 3×3 research to craft sales messaging that leads to more prospecting success.
To find leads, build lead lists for lead generation (attract contacts to you) and lead acquisition (use sources to collect relevant leads). This includes gathering contacts on social networks like LinkedIn, creating a content strategy, hosting events, etc.
Establish a good prospecting mechanism to succeed. Whether email, cold calling, or social networking, what matters more is a structured process using the right tools & automation, is easy to replicate, and enables you to measure and refine the process.
Ensure you qualify prospects so they will be good customers that need your solution now and can be successful. Use a qualifying methodology like PRIM to discover the prospect problem, their appetite for risk, the impact of your solution, and the money to buy.
Run effective sales meetings that are centered on the prospect’s needs and have actionable next steps to avoid getting ghosted. Come prepared with clear goals, good questions, responses to objections, STAR-based next steps, and recaps to improve your meeting outcomes.
Every sale has an internal champion that supports you, but make sure they are really your champion. Assess what’s in it for them, how well they explain your value proposition, their knowledge of the buying process, and access to decision makers.
Avoid surprises as you navigate the sale. Co-sell with your champion to learn the buying cycle, map influencers, and sell high, wide & deep. Be rigorous in tracking deal status, settling pricing concerns, addressing assumptions, and never go negative on competition.
Understand the implications of contracts to avoid falling into legal traps. Watch out for language regarding intellectual property (IP), termination clauses, most favored pricing, data privacy, and indemnification & liabilities.
Never confuse negotiating and closing the sale as the same thing. You are always negotiating the problem, price, and buy-in. When you hit objections, ask open-ended questions like “How am I supposed to do that?” to surface underlining issues.
The expectation is not that you become a salesperson. However, you should gain enough confidence to secure your first customers and build the revenue pipeline. Eventually you can hire your first sales reps and have more success hiring successful reps as you have already experienced and documented the sales process.
What has been your experience selling as a founder and was there a particular skill listed above that was the hardest for you to master?
Solo founder or co-founding team, which is better? A Chicago-based VC asked the question in LinkedIn last week on this question of solo founders and some of the responses were quite thoughtful.
One data point to consider is that according to Noam Wasserman, professor at Harvard Business School, 65% of startups fail because of conflict among co-founders. Going solo means you do not have to suffer conflict or have a messy co-founder divorce.
While data is sparse, one study found that solo founders are 2.6 times more likely to have success with a for-profit venture than three or more co-founders. Solo founders are also less likely to dissolve or suspend their business.
We will dive deeper into this question of founding team formation in future newsletters, but if you have any insights on this question based on your own experiences as either a solo founder or co-founder, please let us know.
Mark has been documenting the 42Geeks LatAm tour in a series of LinkedIn posts across their stops in Brazil, Uruguay, and Argentina. Check out the links to learn more about the 42Geeks community and about each of the startup ecosystems in each country.
Next month, we will share updates from the road across SouthEast Asia and the first stop in Taipei for AWS Startup Day Taiwan on July 4th!