Product-First or Movement-First Startup

When I reflect on four of the fastest-growing ~100 person startups in town, it’s clear that they fall into one of two camps: product-first company or movement-first company.

Product-first companies absolutely adore their own product. Everything centers around building an amazing product that customers love and everything else comes second. Internally, software engineers and the product team are put up on a pedestal and the hierarchy is clear. Product-first companies are all about the product.

Movement-first companies are on a mission greater than themselves. Everything centers around educating the market about this better way to do things, most often through live events and heavy sales and marketing. Internally, sales and marketing teams are hard-charging and at the center of the company. Movement-first companies are all about creating a movement.

What’s the better route? Both are great ways to do it and have their own pros and cons, and both produce very successful businesses. Startups that aren’t amazing at one or the other often fail. Pick one thing and do it well.

What else? What are some more thoughts about product-first and movement-first startups?

10 Questions to Ask When Interviewing for a Sales Role

After yesterday’s post on 10 Questions to Ask When Interviewing With a Startup, a friend asked for a similar list for other, more specific roles. Great idea.

Here are 10 questions to ask when interviewing for a sales role:

  1. What does the typical sales process look like?
  2. What works well and doesn’t work well in the sales process?
  3. Who’s on the sales team and what do they do?
  4. Who would be my manager?
  5. What would be my role and responsibilities?
  6. How would I be measured?
  7. Is this a new role or an existing role? If not new, what happened to the last person?
  8. What’s needed to be successful in this role?
  9. What are the biggest challenges for this role?
  10. What’s your biggest concern about me excelling at this role?

When interviewing for a sales role, it’s critical to ask good questions and demonstrate an ability to build rapport effectively. Use these questions as an initial starting point in an interview.

What else? What are some more questions to ask when interviewing for a sales role?

Spending 50% of a 7-Figure Marketing Budget in 3 Days

With Dreamforce 2016 next week, it reminds me of the time we spent 50% of our million dollar marketing budget in three days at Pardot. In late 2010 we were exhibiting at Dreamforce with a silver booth (~$40k). On the last day of the show, the organizers come around with a form to sign up for the next year with the main incentive being that companies who sign up first get a better position on the show floor.

Reading through the form, it listed out the standard booth types: Bronze, Silver, and Gold. Then, at the bottom, it said Platinum and in big letters said “Requires executive approval.” Now, this booth was offered at a cost of $500,000 and you couldn’t just sign that you wanted it — had to get a higher up in the company to grant permission to spend $500,000 for three days at Dreamforce.

Well, Adam had received the form at the booth, read it, and said to me jokingly “Hey, let’s do the Platinum booth next year.” Remember, we did a little over $3 million in revenue that year and had no venture capital (Pardot revenues in the early years). I look at him and said, “you’re right, let’s do it”. He thought I was joking and an hour later he texted me saying, “Did you really want to do a Platinum booth?” I read the text, got anxious butterflies in my stomach around signing up for such a big expenditure, and texted back, “Yes, let’s do it.”

In 2011, we had a marketing budget of $1 million and we spent $500,000 of it on three days at Dreamforce. Marketing automation as a market was growing incredibly fast, and we had to do whatever we could to stay in as one of the “big 3” vendors, even if that meant spending 50% of our marketing budget (and 7% of our entire revenue in 2011) on the most important show of the year.

Dreamforce 2011 was a hit. At the show, we had the second best position on the show floor and talked to over 2,000 people, including a number of partners and analysts. Dreamforce 2011 put us on the map.

What else? What are some more thoughts on spending 50% of a seven-figure marketing budget in three days?

Customer Acquisition as the #1 Startup Challenge

There’s a reason Why Lead Velocity Rate is the Most Important Metric in SaaS: customer acquisition is the #1 challenge for entrepreneurs. Nowadays, building great technology still takes work, but there are a number of excellent people out there that can do it. When it comes to building a customer acquisition machine that combines lead generation, brand building, and consultative sales reps, all in a cost effective manner, there are many fewer people out there that can do it. Oh, and it’s hard. Really hard.

Here are a few thoughts on customer acquisition as the #1 startup challenge:

  • When talking to entrepreneurs, they always say they want to grow revenue faster (I’ve never heard an entrepreneur say “we’re growing too fast”)
  • When an entrepreneur fails, it’s always due to not signing enough customers to breakeven (or reach another funding milestone)
  • Traction outlines 19 different marketing channels, and most startups aren’t good at more than one or two of them
  • Building a high quality sales team is really hard (hint: it all starts with the hiring)
  • While finding product/market fit comes before building a repeatable customer acquisition process in the four stages of a startup, building a repeatable customer acquisition process is even harder

As Guy Kawasaki likes to say, sales fixes everything. Figure out a repeatable customer acquisition process that’s financially viable and you have the makings of a very successful business. Customer acquisition is the #1 startup challenge.

What else? What are some more thoughts on customer acquisition as the #1 startup challenge?

Questions to Develop the Ideal Customer Profile

One of the terms I hear a fair amount from entrepreneurs is Ideal Custom Profile, commonly shortened to ICP. ICP, as it sounds, is a way to hone in on your desired customer by describing as many elements and attributes as possible. When I ask an entrepreneur about their target customer, and the response is vague, I know that they haven’t developed a strong ICP.

Here are a few questions to help develop the ideal customer profile:

  • What’s the typical company size and geography?
  • What’s the target job title?
  • How much money should they already spend on a related element?
  • What’s the required technology stack?
  • What are some other defining characteristics?

For last couple years before the Pardot acquisition, we defined our ICP as follows:

  • Company or division with 20 – 200 employees of which 5 – 50 are in sales and marketing
  • At least one full-time in-house marketing manager
  • Already run an email marketing newsletter program and purchase Google AdWords for lead generation
  • Job title of Marketing Manager, Marketing Director, or VP of Marketing

Build an initial ICP, socialize it with team members, and continuously iterate on it. The better the ICP, the higher the close rate.

What else? What are some more questions to develop the ideal customer profile?

Video of the Week: Mark Roberge – The Sales Acceleration Formula

Sales, sales, sales. It’s so critical to fast-growing startups yet so foreign to most first-time entrepreneurs. For our video of the week, watch Mark Roberge talk about The Sales Acceleration Formula. Enjoy!

From YouTube: Mark Roberge, Chief Revenue Officer of HubSpot, visited Google’s office in Cambridge, MA to discuss his book, “The Sales Acceleration Formula: Using Data, Technology, and Inbound Selling to go from $0 to $100 Million”.

Mark Roberge served as HubSpot’s SVP of Worldwide Sales and Services from 2007 to 2013, during which time he increased revenue over 6,000% and expanded the team from 1 to 450 employees, using the methods he describes in the book

Sales Training

As the startup progresses beyond product/market fit and finds a repeatable customer acquisition model, it becomes time to really scale out the sales team. As the sales team grows, one of the common tasks is to develop sales training. But wait, we’re just selling software, can it be that hard? Yes. There’s a huge difference between a sales rep that’s well trained and one that isn’t.

Here are a few popular sales trainers:

  • Sandler Training – One of the largest and most well known sales training organizations.
  • salesOctane – Jim Ryerson did several training programs for our team at Pardot and is a master of his craft.
  • Jack Daly – Super high energy and compelling sales trainer. Highly recommended.

Sales training is well worth the expense. When you can afford it, I’d recommend putting it in the budget and investing in sales team training.

What else? What are some other sales training programs and instructors you recommend?