I often find myself mentoring startups who are selling to large, established companies. But my enterprise sales experience has been limited to selling equity in my startup companies. In addition to selling to venture capital firms like Highland Capital, Greylock and Sigma, we sold equity to market leading firms including Apple [Computer], Silicon Valley Bank, Ernst and Young, Softbank, and Reed Elsevier.
What I learned from selling to these companies is you aren’t selling what you’ve done. And that’s not what they are buying. They are buying what you can do – for them. And most importantly they are buying what you can and will do that they can’t do themselves. They are betting on the future and betting on your startup.
I often find when mentoring B2B startups that they tend to try to sell on what they have accomplished and worry they don’t have enough traction to convince large companies to buy what they are selling. They tend to worry about what they haven’t done rather than focusing on what they can and will do. These entrepreneurs are looking in the review view mirror, not through the windshield.
My advice is always to be very frank and straightforward when questioned about their limitations. Whether it’s how long they have been in business, how many customers they have, or the years of experience of the management team. Be honest, but don’t be apologetic! You’re a startup, of course you aren’t going to have the customer list or years of experience of a large enterprise and that’s not why they are talking with you.
I still remember John Avalon, our contact at Ernst and Young, marveling at how quickly and cheaply we had built a web site that was far superior to their’s in 10% of the time and 5% of the cost. Big companies are talking to you because you have the magic! That’s what you are selling!
Reading The Wall Street Journal the other day I came across a great story of how David Libeskind, now a world famous architect, but then a teacher at Cranbrook Academy of Art in Michigan, in 1989, won a contest to design the Jewish Museum in Berlin.
As part of the interview process, a German senator asked about his prior experience. “I hadn’t built a single building, not even a garage,” Mr. Libeskind recalls today. But instead of telling that to the senator, he responded: “If you go by the past, Berlin’s not going to have any future.”
Mr. Libeskind outlined his vision for the building: “There is no door…You have to go underground…to penetrate through the darkness of the Holocaust to understand how the future would function.” He won the commission and went on to live in Berlin for nearly 12 years.
Keep in mind that like Daniel Libeskind, you are selling the future, not the past. You need to capture the imagination of your customers and their wallets will follow.
You can read more about Mr. Libeskind in the WSJ article Daniel Libeskind Thinks Buildings Should Tell Stories and in his new book Edge of Order, which tells stories about his buildings and the life experiences that inspired them. I’ve ordered my copy.