Today I had the opportunity to spend 90 minutes with a startup in town and talk about their go to market strategy. They launched a couple months ago and have signed up 10 paying customers through a combination of referrals and general search marketing. The big problem: sales aren’t going as well as they would like, cash is running low, and they don’t have a sales strategy.
The biggest challenge for technical co-founders is transitioning from being product builders to product sellers.
Here’s the advice I gave:
- Prepare to be the sales rep, sales engineer, and product manager
- Charge significantly more than initially thought for the product and listen for people saying the product isn’t worth it (that happens more often than people saying you should charge more)
- Manage the four main sales metrics: calls, demos, opportunities, and deals won
- Understand they’ll be ratios like the following: to win one deal it takes three opportunities, to get one opportunity it takes three demos, and to get three demos it takes 150 calls
- Pick the most promising vertical from the first 10 customers and use Jigsaw.com to generate a list of 500 applicable companies plus employees
- Plan for four hours a day of calling on the companies, with the expectation that it’ll take 8-10 calls per company to get the right person on the phone
Employing this strategy will quickly reveal if the right vertical has been selected, and if so, a path to success will be eminent.
What else? What other recommendations do you have for startups working on their sales strategy?
4 thoughts on “The Post-10-Customers Startup Sales Strategy”
I don’t know David. That sure sounds like a lot of hard work,. 🙂
Following the theory of Comparative Value, can the cold calling to set up demos be outsourced?
Outsourcing is worth a shot. There are quite a few companies out there that do performance based payment for appointment setting. The most important thing is the co-founders to be on the phone with prospects and learn from them without playing the telephone game.
Great, great post. Valuable tip about Jigsaw.com. Your posts are full of wisdom, David. Keep up the great writing.