Delineating and Segmenting Sales Teams

In a small, fast-growing market, one of the best and easiest things to do with an inside sales team is to make it a free-for-all such that the sales reps can aggressively go after any business they want that isn’t already being called on by a co-worker. The idea is that there’s huge potential and the reps should have the autonomy to figure out what works best for them, especially in a situation with no cap on commission.

As the market and the team grows, many times it becomes necessary to delineate the sales team based on one or more factors. Here are some of the more common examples to segment sales reps:

  • Geographic territories (e.g. regions, state, cities, zip codes, etc)
  • Industries (e.g. technology, healthcare, government, etc)
  • Company size (e.g. companies at or below 250 employees and companies above 250 employees)
  • Deal size (e.g. deals at or below $10,000 and deals above $10,000)

One of the worst things a sales rep can hear is that their comp plan is changing and their territory is shrinking (often happens when a startup is growing fast and adding more reps). My recommendation is to keep things simple as long as possible and introduce more complexity and specialization as feedback and data make it painfully obvious that there’s a better way.

What else? What are some more ways to delineate and segment sales teams?

12 Core Principles from How to Win Friends and Influence People

After finishing the book How to Win Friends and Influence People by Dale Carnegie, I now highly recommend it to entrepreneurs. The book has a tremendous number of short anecdotes and ideas about how to be a better person. In the latter part of the book the author enumerates 12 core principles to win people over for your way of thinking:

  • The only way to get the best of an argument is to avoid it.
  • Show respect for the other person’s opinions. Never say, “You’re wrong.”
  • If you are wrong, admit it quickly and emphatically.
  • Begin in a friendly way.
  • Get the other person saying “yes, yes” immediately.
  • Let the other person do a great deal of the talking.
  • Let the other person feel that the idea is his or hers.
  • Try honestly to see things from the other person’s point of view.
  • Be sympathetic with the other person’s ideas and desires.
  • Appeal to the nobler motives.
  • Dramatize your ideas.
  • Throw down a challenge.

Entrepreneurs should put this book on their list and embrace the 12 core principles.

What else? What are your thoughts on the 12 core principles?

Visually Representing a Corporate Culture

Recently I had the opportunity to meet with a startup that is very focused on corporate culture. Now, this is a growth stage company that many would say have moved beyond startup phase but they still had a number of startup elements.

One of the many things that impressed me is how they visually represented their corporate culture throughout their office. Here are some ways they present their culture in a more physical manner:

  • Creating a logo or graphic that represents the culture, as separate from the company logo
  • Incorporating the visual representation into standard office items that all employees use like pens, notebooks, cups, etc
  • Painting the walls and other physical building elements with the graphic

Many companies put their values or mission statement on a wall for team members to read on a regular basis but miss the fact that for a culture to care about these things they need to be alive on a daily basis. By visually representing a corporate culture throughout the office with many different mediums, and walking the walk, the culture is reinforced and significantly strengthened.

What else? What are some other ways to visually represent a corporate culture?

Leaders Are More Effective When Liked from How to Win Friends and Influence People

One of the most popular self-help and professional development books available is Dale Carnegie’s How to Win Friends & Influence People. Amazingly, the book was published in 1936 and is still supremely relevant today. As part of our leadership development program, we’re doing a book club with this being the next book on our list.

For leaders, the book is a must read. Yes, it is commonsense but commonsense that needs to be thought through and digested on a regular basis. Leaders are more effective when they are liked and respected — team members generally want to work for, and with, people they like.

From the book, here are six ways to get people to like you:

  • Become genuinely interested in other people
  • Smile
  • Remember that a person’s name is to that person the sweetest and most important sound in any language.
  • Be good listener. Encourage others to talk about themselves.
  • Talk in terms of the other person’s interests.
  • Make the other person feel important — and do it sincerely.

How to Win Friends & Influence People should be on the list for all entrepreneurs and leaders looking to get better at what they do and how they do it.

What else? What are some other ways to get people to like you?

Transparency of Information in a Startup

One of the best ways to built trust in a startup is through transparency of information. The author Jack Stack argues for extreme transparency in his book The Great Game of Business. Transparency, to me, is a great way to get everyone on the same page company-wide, align interests, and engender trust. Communication of information, especially information that changes frequently, is one of the more difficult parts of building transparency into the culture.

Here are some techniques to help facilitate transparency of information in a startup:

  • LCD scoreboard in the lobby with near real-time information on progress towards goals
  • Simplified One Page Strategic Plan updated and rolled out to all team members quarterly with financial information like revenue
  • Bottom-up daily check-ins throughout the organization
  • Anonymous town hall questions where nothing is off limits
  • Discourse and explanations around company changes as opposed to edicts with no reasoning

Creating an environment of transparency is tough and requires commitment from the top down. These techniques and methodologies help set the tone and promote transparency.

What else? What some other ways to promote transparency of information in a startup?

5 Simple Reasons Entrepreneurs Fail

As I think back to my many entrepreneurial endeavors that failed (e.g. post mortem of a failed product), several clear themes come to mind. It isn’t that any one issue or challenge was the culprit, rather there were a number of items that colluded together. Also, most were within my control and I still failed.

Here are five simple reasons entrepreneurs fail:

  1. Not giving it 100% – it’s hard enough to succeed when working on something full-time that entrepreneurs working on an idea part-time are even more likely to fail because they won’t make enough progress to figure out how to make it successful
  2. Premature scaling – resources are scarce so a self-inflicted death is more likely when staff or resources are added before a business model is found (see startups shouldn’t hire a VP of Sales)
  3. Building product in a vacuumcustomer usage is oxygen for a product and too often entrepreneurs add features based on whims that don’t add value to customers while also slowing down future product development (e.g. code debt)
  4. Lack of resourcefulness – it isn’t easy recruiting team members, raising money (if necessary), signing customers, building partnerships, etc and many entrepreneurs run into a brick wall without breaking through it
  5. Poor market timing – this is the toughest of them all as it is outside the entrepreneur’s control but sometimes it’s the right idea at the wrong time and sometimes it’s just a bad idea, and it is always difficult to tell

There’s no fool-proof way to be successful but the five simple reasons entrepreneurs fail comes up over and over again. Learn from these issues and increase your chance of success.

What else? What are some other reasons entrepreneurs fail?

When is a Startup No Longer a Startup

A controversial article and topic like work/life balance in a startup is good fun as people have strong feelings on it. I really enjoy hearing competing opinions and point-of-views. After more debate on the original topic, another item came up: when is a startup no longer a startup?

Devon Wijesignhe offers up that once you are profitable and have at least $10 million in revenue you aren’t a startup:

I agree with him that those criteria could be part of what makes a company no longer a startup but revenue and profitability alone don’t feel right. In fact, I wanted to offer more specific ideas of when a startup is less like a startup and more like a regular business. Here are a few ideas to distinguish a startup from a regular company:

  • Product/market fit has been achieved and the focus has been on scaling as opposed to staying alive for at least one year (it takes time to realize where you are)
  • Profitability has been achieved for at least one year and revenue predictability within a 10% margin of error has been achieved (one theme is that once the startup is no longer unpredictable, it is no longer a startup)
  • Management team and team member depth is strong enough such that any person in the company can go on vacation for two weeks without any issues and everything keeps moving forward
  • Growth has slowed down to the point that the approximate maximum business size is foreseeable (e.g. it’ll be a ~$5M business indefinitely based on current factors as opposed to the possibility of being a $1B business)

Part of being a startup is that it feels like a startup internally. That could be a flat hierarchy, quick decision making, people wearing many hats, or a sense of unbridled optimism. Regardless, a startup is no longer a startup when people inside it feel like it is no longer a startup. There’s no right or wrong answer.

What else? When do you think a startup is no longer a startup?