10 Ideas For Those Critical Early Startup Sales

This post initially appeared on Dharmesh Shah’s excellent blog, OnStartups.

Closing your initial sales at a startup is one of the most challenging parts of building a company. Many startups die before they ever close a deal.
Unless you’re entering a well established market there will be uncertainty with your product, approach, and timing until you have enough customers to prove that you have a good business model.

When Brendan and I started Wistia, we had questions about how the sales process should work, what kinds of documents we needed in place, how long things should take, and where we should look for potential customers. Through sheer will, conviction, and lots of failure, we found our way to where we are today. Here are the 10 principles we learned along the way.

1. Don’t wait to sell

You should start selling as early as you possibly can. Do not wait until your product is polished and launched. We changed direction and started heading towards Wistia about a year into startup life. How’d we know to head towards Wistia? Because we had a real potential customer that was interested when we had NO PRODUCT. We talked to them about what we thought Wistia could be. They liked the concept and we built the first version of Wistia in two weeks. A month later and we had our first customer.
We had just spent seven months building a portfolio website and four months trying to get people on board while our bank accounts shrank and our time to live decreased. In the course of a month we sold our first customer, decreased our burn, and realized that selling early was possible.

2. Do things that don’t scale

We learned an enormous amount from our first customer. That first sale gave us a benchmark for what people were willing to pay, how long it would take to close a deal, and how easy it was to use the product.

We made a point of going to our first customer’s office every couple of weeks to talk about the challenges that they were seeing and how we could make the product better suited to their needs. We could never spend as much time with every customer as we spent working with customer numero uno but we magnified all the extra learning upfront across the customer base.

Trying things that seem like they can’t scale is not just okay, it’s imperative as long as you are actively learning from every interaction.

3. Get inside your customer’s head

What books and magazines would your customers read? What conferences would they go to? What search terms would they use? Who would they follow on twitter? Once you have an idea of where your customers hang out, you need to go there. The more time you spend where your customers are, the more you’ll learn about how they think and whether or not you’re focused on the right group.

We thought some of our early customers would want to use Wistia for training, so we went to learning conferences. When that didn’t work we focused on talking to people from big companies that went to tech events. As we got better at figuring out where our customers could be we had more opportunities to learn from the right audience.

4. Focus on the buyer

Sometimes, especially with enterprise sales, the buyer of your product will be different from the user. That’s why it’s critical that you focus on the buyer.

CRMs are an excellent example of this phenomenon: a product is sold to the VP of Sales that will be used by the sales team. If you focus only on making an amazing experience for the sales team while ignoring the high level dashboards of how the sales team is doing, the VP of Sales will have trouble buying.

Look at Salesforce.com; their application can be an ardous one to setup. In fact, there are companies like OpFocus, whose main business is working with companies to optimize the Salesforce.com system already purchased. But Salesforce.com does have a great set of dashboards for the executives. The buyer, the VP of Sales, is happy and Salesforce is a $18B company with a product that has a terrible UI. All because they focus on the buyer.

5. Don’t price against cost

Cost matters when markets are mature and products are well defined. All that matters to customers is value. Should we charge our customers based on how many servers they’re using or how much video bandwidth they’re pushing because those are our costs? No.

Our customers don’t care how much we’re paying Slicehost or any of our other providers. They want to know if their videos are effective, they want to close more deals, and they want to provide a better experience for their customers. These needs could not be more divorced from our costs.

6. Position against complementary products

For some reason, competitive startups tend to think that they need to position themselves against each other. But as my good friend David Cancel likes to say:
I believe a startup only has one real competitor, indifference

People not caring enough about your product is your true competition, not some other startup.

When you’re thinking about how to position yourself, look at the complementary products, not the competitive ones. Ask yourself two questions: How much value can I create for my customer? And how much value are they getting from the other products they use?
Say your customers are spending $50 a month on Mailchimp, and they get an email platform they use every week that allows them to design, manage, and market to 5,000 recipients. Don’t try to sell them a video hosting solution for $1,000 a month that they’re going to use once a quarter to train 200 people. We made this mistake, and it’s an important one to learn from. Be honest about how much value you create and how much value your customers are getting from other products.

7. It’s only the beginning

When you first start selling a new product every new customer feels hugely important, and they are. It becomes easy to put a crippling amount of pressure on yourself to close deals and get people interested. While this can be a good motivator, it can also cause you to make mistakes.

When we were first getting going sometimes we’d say things like “Maybe we should wait a bit until feature XYZ is launched. Then they won’t be able to say no.” or “If we can just get company ABC to sign up, then it’ll be way easier to get that other guy too.” Here’s the problem with this: unless you’re dealing with a market in which there are less than 100 customers, the customers you’re trying to sign up should only be floating on the surface of your pool of potential customers.

You should not be afraid of scaring people away with a high price, the wrong messaging, or an initial email that’s too short. You need to try all of these things and more to figure out what’s going to work for your sales process. You need to be able to take risks and push forward quickly. This can be impossible if you structure your plans around closing each and every individual potential customer.

8. Focus on every customer

Even though no one customer should define your business model, you should leave yourself the flexibility to cater to each individual customers in specific ways. The most likely way to get customers to close is to spend a little time on each individual target. You need to personalize the correspondence as much as possible. This is true if you’re sending an email or if you’re meeting with someone in person. Figure out why they’re successful, what their hobbies are, and what conferences they like going to. The more you can understand them the more likely you are to speak in their language.

It takes time to prepare and learn about every target. But as you get more customers you’ll quickly learn what similarities and differences your customers have. It becomes easier to figure out where to focus and how to craft your message.

9. Act your size

When you’re first getting started it’s easy to fall into the trap of trying to act bigger than you are. Common pitfalls include trying to demand exorbitantly high prices, positioning to have more customers than you have, and promising more than your product can deliver. Yes, I’ve made all these mistakes.

When you’re trying to act big, it often highlights just how small you are. Pretend like you have more customers than you do and when someone asks you who your customers are you’ll be left speechless. Position your price too highly like your more entrenched comparables and people will stop responding to you.

The secret is: the right customers will gladly pay startups for services. They’ll think they can get a deal because they’re early to the party, which is likely true. They’ll be excited about using cutting edge technology to get a leg up — again true. And if they pick right and your product rocks they get to tell the world that they were first — how can this benefit even be measured!

10. Just keep going

The hardest part of bootstrapping your sales is sticking with the process. It can take a very long time to get your first deal. But each deal comes faster with practice and more information
Your initial hit rate will probably be terrible. If it isn’t, you’re doing something right. I have some friends who run a company called Usable Health that just closed their second deal in a complex and emerging space: kiosk-style self checkout at mid-sized restaurant franchises. They’ve been selling for one and a half years and pivoted three times in the process. Now they have a pattern, happy customers, a model that looks like it could scale, and real tangible revenue.

Not giving up is the most important part. Give yourself time to build your business model. Once you’ve done that, you’re golden.

What Motivates An Entrepreneur?

Motivation has been a popular topic at My City Lives HQ lately. We’re obviously keen to identify ways to motivate activity on our platform and having recently doubled the size of our team, the motivation discussions have grown to asking how organizations motivate and catalyze the talented people they work with. Even at our home at The Center for Social Innovation – a startup incubator and a startup itself – we find ourselves in an environment rich with dialog and perspectives on motivation.


In his TED talk, “The Surprising Science of Motivation“, Dan Pink makes a case for businesses to consider what science has established for years: money only works as a contingent motivator (i.e. if you do this, you get that) in which there are a clear set of rules and one solution. But when a task requires creativity and problem solving, a contingent motivator is a negative force because it focuses the mind when it needs to be open. The human psychology, more importantly, just doesn’t seem to get motivated by a bigger carrot as much as it is by three simple to understand factors: Autonomy (having choice and freedom), Mastery (getting good at something valuable) and Purpose.

Why do we do what we do?

 Pink’s 3 pillars completed a process inspired by author Simon Sinek last year, when he challenged me to consider why I do what I do. Sinek is a “why” advocate – he believes that if we start by understanding our why, we’re more likely to do things that we want to do which correlates strongly to our happiness and not surprisingly, our ability to excel.

Until I was able to connect Sinek’s case with Pink’s, my response to the question “why I decided to start a company” was that it made me happy. Now, I understand that happiness is the outcome but not the why. Autonomy, Mastery and Purpose are my whys and by understanding that, I’m more aware than ever of my motivation for being an entrepreneur and thus, given Sinek’s case, in a better position to succeed.
So what motivates an entrepreneur?

Autonomy and the Entrepreneur

 I really don’t believe that the prolonged motivation of an entrepreneur is being “their own boss”. The allure of being your own boss is short lived because the reality is that being your own boss is arguably one of the most difficult things to do. Self accountability is the antithesis to a walk in the park.
It’s not that I begrudge “being my own boss” – it does have its perks after all – but I just never really think about it nor find myself passionate about it. I am passionate, however, about the possibilities that autonomy provides me. Entrepreneurs are dreamers at their core. Every product or service was at the some point some person’s “crazy idea”, which they turned to reality only because the systems or status quo didn’t allow for it. The autonomy factor for entrepreneurs relates to a deep need to actualize their dreams.

Mastery and the Entrepreneur

No one starts as the best but what distinguishes successful entrepreneurs is a never ending quest to get better. I’ve often understood Mastery through the lens of competition. You don’t have to be a sore loser to agree that losing sucks. As an entrepreneur, you’re going to “lose” many times but I’ve noticed the critical difference with those who are successful is that they take personal accountability for not being the best. By doing so, they fuel their inner passion to get there. Simply put, entrepreneurs are motivated by an inner desire to be the best at what they do, period.

Purpose and the Entrepreneur

 I’m a purpose junkie. I’m constantly fascinated not only by my own purpose but what other people identify as theirs. Part of the reason for this is that you’ll never find identical answers and you can learn a lot about a person and yourself if you understand the purpose that drives them be it personal, social, a trigger event or even another person.

Startup romance dictates that if you build it then they will come. Startup reality, however, is that building it is just one part of the puzzle. The reality is that starting a company is a constant fight against competitors, against naysayers, against barriers and even against yourself (I’ve seen a lot of friends self select themselves out of being an entrepreneur and have nearly done it to myself). If you don’t have a reason to fight when the going gets inevitably tough, you’ll likely find yourself on the wrong end of the startup failure rate.

Why is understanding what motivates you important?

Given the high failure rates in entrepreneurship, you’re going to have to bring everything to the table and to do that consistently is challenging especially if you don’t know why you’re doing it in the first place.

Adil Dhalla is the Chief Dish Washer at My City Lives. He can be reached on Twitter (@mycitylives) or via email (adil@mycitylives.com).

The Most Underrated Quality of a CEO

You usually hear a lot about the early days of being a founder CEO, but I'm going to try to write more about the days of being a founding CEO as a company grows. The articles will probably be shorter and more frequent. Earlier today, someone asked me on Formspring what the most under-rated quality of a CEO is and I responded very simply with this: The Ability To Let Go. Late last week, I was lucky enough to get advice from a very successful CEO that told me: only focus on tasks that you yourself can specifically do. If it's something someone else can do and it constantly eats into your time, then you should find someone to fill that role if you have the resources. It resonated with me heavily as I find Onswipe growing faster than ever before and thinking about what tasks I should be taking on every day.


You Can't Do It All Yourself

As a growing company, there is absolutely zero chance that you can do it all yourself. Even if you had 24 hours in a day, there's no way to do it all. Eventually deals will start to take time, hiring will take numerous interviews, product will be in different divisions, and more. You need to realize this and find someone who can start taking over the burdens. As entrepreneurial CEOs, it's in our DNA to feel like we can do everything. The great CEOs realize they actually can't do everything all by themselves.

Find People Smarter Than Yourself

The best way to do this is to find people that are way smarter than you in the area of expertise. A CEO has to do a great job at setting the vision for the organization and orchestrating it. When your company starts expanding, you need to find people that are just way better at the specific task than yourself. It might be cutting deals with partners in BD or finding top notch engineers. You have to find those that are smarter than you.

Make Sure You Set The Vision

Make sure you set the vision as CEO before bringing people on board. Everyone needs to have cult like zeal in the mission and exact vision of what you're building. If they are not on the same page, it will ultimately destroy your belief that they carry it out when you defer your trust to them. Take the time to make sure everyone is on the same page with the entity that is your startup.

Trust and Defer

The phrase I use internally a lot is "Trust and Defer". I trust certain people with making decisions on certain areas of the company and defer to them for domain expertise. I do my job well by setting the overall course and vision for the company, so the decisions within their domain expertise fit within those confines. You have to trust the people that join your company with your life because that's literally what your product is.

It Will Hurt

There's no way around this. It's going to be a weird feeling if you're used to bootstrapping and running a company with 1-2 cofounders. When you're all of a sudden 10+ people working across the globe, it hits you in the face. It's okay, this is normal. If you've found people you trust and are smarter than yourself, it will work out better than you ever expected.
We're growing faster than I ever thought. A few weeks ago we got to the point where there are teams handling BD and teams that are handling Engineering. I've learned to make sure that the vision is set and make sure that I'm focusing my time solely on the things that solely I can do.

Why Everyone Should Work in Sales — at Least for a While

By Jeff Haden

Everyone should work in sales at some point in their career — the earlier the better.

My first post-college job was with a Fortune 500 company. In terms of workload, we only experienced two conditions: Busy and busier. So I never thought about the task of drumming up sales. Why would I? Work magically appeared.

Many people, especially those who work for large companies, are not exposed to the difficulties and challenges faced by sales teams. But we all should be. Why?
Sales skills are incredibly useful — in every field.

To many people the word “selling” implies manipulating, pressuring, cajoling… all the used car salesman stereotypes. If you think of selling as explaining the logic and benefits of a decision, then every job requires sales skills: Convincing coworkers your idea makes sense, showing your boss how a project will pay off, helping employees understand the benefits of a new process, etc. Communication is critical in any career; you’ll learn more about communication by working in sales than you will almost anywhere else.

Here are more reasons everyone should work in sales, at least for a period of time:

You’ll learn to negotiate. Every job involves negotiating: With peers, with other departments, even with your boss. Salespeople learn to listen, evaluate variables, identify key drivers, overcome objections, and find ways to reach agreement — without burning bridges.

You’ll learn to close. Asking for what you want is difficult for a lot of people. Closing a sale is part art, part science. Getting others to agree with you, and follow your direction, is also part art and part science. If you aspire to a leadership position, you must be able to close. Great salespeople know how to close. Great supervisors and managers do too.

You’ll learn persistence. Salespeople hear the word “no” all the time. Over time you’ll start to see “no” as a challenge, not rejection.

You’ll learn self discipline. If you work for a big company, sometimes you can sleepwalk your way through a day and still get paid. When you work on commission, “If it is to be, it’s up to me,” is your credo. Sales is a great way to permanently connect the mental dots between performance and reward.

You’ll learn to work well with a wide range of people at all levels. Plus, working in sales is the perfect cure for shyness. Learn to step forward with confidence, especially under duress or in a crisis, and you can take on any role in an organization.

If you want to own a business, you’ll always be in sales. Every business is an extension of its owner. Even if they have a sales team, a business owner is always involved in sales. (In many companies the owner still handles the major sales personally — or at the very least is brought into the process to help close the deal.) An entrepreneur who can’t sell faces a major challenge. Gaining sales skills will help you win financing, bring in investors, line up distribution deals, land customers — in the early stages of starting a company, everything involves sales.

Understanding the sales process and how to build customer relationships is incredibly important, regardless of the industry or career you choose. Spending one or two years in a sales role is an investment that will pay dividends forever.

Think of it this way: The more intimidating or scary a position in sales sounds, the more you need to take one. You’ll gain confidence and self-assurance, and the skills you gain will serve you well for the rest of your business — and personal — life.