Sales Function in a Startup
Date : May 3, 2018 By
A decade ago, I founded and operated few financial technology companies in India. Because the ventures couldn’t win institutional investors, we focused on providing professional services in addition to selling products. This was helpful because by doing so our bottomline was supported and we kept going.
Without any prejudice, let me acknowledge that we sold solutions to the most impenetrable group in a bank: the treasury group. The treasury department is mandated to trade, capture positions, manage risk, report trades, monitor the action continually etc. (broadly divided into back-office, middle-office, and front-office groups for those who have worked in these areas and are initiated on these topics).
Selling to this group was an extremely challenging pursuit. Add to it the fact that during this time I was in my mid twenties, making it one of the hardest thing I ever did.
I started-up in India at a time when most ecosystem players, including many of todays venture capital funds, had seen nothing / little on Indian start-ups. While I would not / can’t claim to be great at selling (in fact, I had zero experience of anything, leave aside the knowhow of sales / marketing / treasury function etc.), I did go from sans nothing (literally) to acquiring banking clients in India and Middle East. The ventures had their own shares of wild swings pre and post Lehman’s financial meltdown, before one of them got acquired by Miles, a mid-sized wealth management company, which was backed by two global private equity funds.
While my venture was not a multi-million dollar outcome, as is the case of few ‘hallowed’ present-day (VC backed) transactions, I believed that my learnings, at a very young age, were cosmic.
This rant hopes to help young entrepreneurs who, today, are sweating blood as I did several years ago. Here are few lessons from my early experiences (these may be more relevant for early-stage ventures selling to enterprises):
1. Persevere till the end of the world
I made ‘infinite’ presentations to a large Indian private sector bank. We must have visited their head office (BKC) on more than 30 occasions before we got an agreement to pilot our algorithms with bank’s data.
The key was that I pursued this incessantly: thinking about the value proposition, testing the product, connecting with relevant people, making decks, anticipating questions etc. and repeating the above cycle, again and again and again. It was a stretch of four to six months, or probably more, in which it almost felt like I had an obsession to pursue and a disorder to repeat.
2. Be ‘thick-skinned’
Thick-skinned is an ability to say, ‘Frankly, my dear, I don’t give a damn’. It helps, particularly, in difficult times. The thick-skin verb should have the same nonchalance as shown by Clark Gable when answering Vivien Leigh in the 1939 film ‘Gone with the Wind’. Being ‘thick-skinned’ helped me overcome awkward situations, continually move ahead and achieve my milestones.
One needs to ignore negative criticisms while one is pursuing sales goals. It should be as though an automatic filter were running in background while you continue with parallel absorption of important actions happening all around you.
Unless one has thoroughly exhausted all options, one should not take a ‘No’ or any of its manifestations from customers. They should be ignored, assumed as if they were never said, while getting back to finding different ways to work out the issue / sales numbers. However, if customer ‘X’ becomes adamant and continually says ‘No’, one should move on to the next target, but visit ‘X’ at a later time. The ‘adamant’ customer converts.
3. Hire for inherent sales skills and not for pedigree
With much difficulty, we hired few summer interns and full time employees from top MBA schools. They were good. However, we found that guys from local business schools were more attuned to the rough early-stage sales process. In spite of them not having attended pedigree colleges, I found that they could relate more with start-up hassles, were more committed, and identified more with hardships of a salesman. These young guys were easy to train, were more charged to learn, and approached sales target with more enthusiasm. Additionally, the hiring of these younger guys kept important slots vacant, positions we filled later with senior and seasoned sales people. While today, startups’s attractiveness has begun to find takers from both top and not-so-top MBA / engineering institutes, the idea to hire for inherent skills still works.
It may be beneficial to hire / build your sales team gradually in ascending order of work experience / merit; layering hires intelligently at an early-stage helps to maintain team dynamics. By doing so, team hierarchy gets automatically set / is easier to build.
4. Have your lead funnel filled up all the time
Enterprise sales is usually long. Even the most promising leads fail in the initial run-up. I can’t stress more the importance to be chocked up with quality leads, more so at an early-stage. One of the ways to be full is to have sales team divided among several groups targeting specific verticals / areas. Each of these groups should be mandated to add minimum number of prospects into the lead funnel every fortnight / month / quarter.
Post setting broader targets on a periodical basis, it is usually easier to work backwards and achieve them. Ideally, the lead funnel should be built in such a way that it has X (>5) multiple of chalked targets. While the approach may vary for different stages and kinds of businesses, the idea is to aim high and close out deals.
5. Your sales cost should be minimal initially
One should start by building pre-sales team. This team doesn’t cost a bomb yet is good to sketch sales plans, write white-papers / build collaterals, prepare sales pitches, and reach out to prospects for initial discussions. At an early stage, founders themselves should become sales executives, and use pre-sales team to close out early deals. This provides the needed confidence to scale up and build a full-fledged sales and / or delivery team to be able to replicate the winning process later.
The above helps time the cost add-ups appropriately. Additionally, new sales team would find it smooth / reassuring to see already implemented product / service when they come in. Such layering of sales personnel leads to stealing of more contracts in future.
6. Huddle every fortnight to update and adjust
Sales is a continuous process. It has to be updated, adjusted and continually pursued and closed. Founders should lead weekly or fortnightly cross-functional meetings that should necessarily have key people from the sales team. Having sales guys in your meeting would mean that every team member will be aware of customer engagement / feedback / reaction. Knowing exactly how the products and services are faring at customer’s desks makes the whole team understand finer details of the business, and thus be more motivated.
Founders should structure well defined incentives to encourage individuals who perform well and achieve their sales targets.
PS: The original article, written few months ago, appeared on Y Combinator’s Hacker News. This is a shorter and amended version.