Why, when, & how you need a sales leader


Despite the fact that MIT boasts a top-flight business school, I’ve rarely seen Sloan students, faculty or alumni as members of the teams we mentor at MIT’s Venture Mentoring Service. It’s probably no surprise that virtually all teams are composed of solely of engineers and scientists, after all MIT stands for Massachusetts Institute of Technology.

I’ve learned the hard way how important sales is to the success of startups. Build it and they will come has worked for perhaps 1% of venture-backed startups like Facebook and Twitter. However, creating and selling enterprise products is far different from consumer products. Virality, which is instrumental in acquiring customers in consumer markets, seldom if ever works in enterprise markets. I’m not sure how many of these
all-engineers teams understand that.

Why do you need a director of sales, anyway?

Here’s a great story about the value of sales, told to me many years ago by Bill Warner, for whom I was working at the time. Bill is the founder of Avid Technology, which while becoming wildly successful selling it’s Macintosh-based video editing systems, didn’t take off like a rocket at first. As is typical amongst engineers, the engineers at Avid had no understanding of the sales process and didn’t see why Avid even bothered to have a sales director.

One day, very early in the company’s lifespan, the sales director had gotten tired of how Avid’s engineer’s didn’t value his work, so he decided to invite a few of the engineers on a sales call to one of Avid’s beta testers, a video editing studio in New Hampshire. The group was greeted by the owner of the studio who gave them a tour of the facilities and described the work being done with the aid of Avid’s video editing workstations. When the tour was over the owner, Avid’s sales director and the engineers sat down in the owner’s office to get his feedback on their beta testing of the Avid’s digital non-linear editing system. For about fifteen minutes the owner of the studio  relentlessly bombarded them with complaints about the system. When he finally finished all the engineers were slumping in their chairs and staring morosely at their shoes. But not the sales director. He looked the owner in the eye and said, “Thanks for the valuable feedback, Rick. Now tell me, how many editing workstations are you planning to buy?” When the owner answered, “Let’s start with eight” the engineers heads all snapped up to stare at the sales director in amazement. From that day on grumbling about why Avid even needed a sales department ended. (Please excuse errors in my recounting this story, I heard it a long time ago and the details have gotten fuzzy along the way.)

As I’ve written, there are only two jobs in a startup: building a product and selling it. Do you know what happens when an engineer-founder takes on the sales role? You gain a lousy sales person and lose a great engineer! That’s not to say that some engineers, like Bill Gates of Microsoft fame, aren’t good at sales. But unless one of your engineers has sales experience or happens to be a natural sales leader, you must bring on a sales director if you expect to succeed in the enterprise market. (For those firms in the B2C market resources should be first expended on a marketing wizard.)

When do you need a sales director?

Forgive the generalization, but as a rule sales people have very short term goals, “How much can I sell this quarter?” whereas marketing directors take a longer view, “How will we become the leader in our market?” Another general rule: sales people are motivated by cash compensation (short term focus) and marketeers are motivated by equity compensation (long term focus).  I liken marketing and sales to handed-ness. Your company need two hands, one is sales, the other being marketing. They need to work together. But few people are ambidextrous, they are either natural sales people or natural marketeers, but not both. At Course Technology, we were very fortunate to have an ambidextrous executive, Howard Diamond, who was our VP of Sales and Marketing

You should start looking for a sales director as soon as you launch your company, if not before. Why? Because it is extraordinarily hard to hire a great sales director. You will need to kiss a lot of frogs in this process. The search could take many months. If you wait until your product is ready to launch you will lose out you on any first mover advantage your might have had. And sales director don’t just sell! They also provide valuable customer feedback to engineering during the product development phase. Sales in the enterprise market – and even some segments of the consumer market – has a very long sales cycle – measured in months. And generally speaking, the larger the company the slower the sales cycle as battleships are far less nimble than smaller craft.

However, sales people can’t sell demos or even prototypes and have no motivation do do so, because a sales director’s compensation is heavily weighted on sales commissions. Which is why ventures often wait until they are ready to launch their product to hire a sales director.

To determine when to hire a sales person you need to understand the lifecycle of a product from the viewpoint of your customers:

  • Concept – usually conveyed by a presentation
  • Demo – a dynamic way to demonstrate the product concept, such as an animation, a video or very early version
  • Prototype – a version of the product that the customer can try out for themselves, but it’s not feature-function complete, nor robust or polished
  • Alpha – a version for the key stakeholders in the venture, like Board members, investors, advisors and friends of the company to try out and provide feedback
  • Beta – a feature-function complete version that needs a great deal of customer testing to help find bugs, ascertain performance, and find edge cases overlooked in the alpha testing process.
  • MVP – the minimal viable product, the first version released to customers

Because sales directors are driven by cash, you will need to have an angel or VC investment large enough to pay at least the sales director’s draw. (A draw is an advance against future anticipated incentive compensation (commission) earnings). He or she might be willing to accrue commissions until the first round of funding, but don’t count on it.

You don’t want to hire a sales director too early (even though you start the search as soon as you incorporate), as you probably won’t be able to provide incentive-based compensation – they have nothing to sell. But  you don’t want to hire a sales director too late as you will lose out on the market insights a good sales person can provide to engineering; waiting will extend the time to first customer revenue significantly. Worse yet, by waiting you could lose out to a competitor who gains first-mover advantage.

An important factor to understand is the role the team plays in an investor’s decision to invest or not. The stronger the team – expertise, track record, experience in the market – the less risk to the investor and the more likely you are to land a seed round or even a Series A round. So if you are fortunate find a world-class sales director who could join the team early on, try to hire them, so long as they can support themselves until you land that first round.

How do  you find a great sales director?

Great sales directors, like great engineers are probably already working someplace else. However, if a company does an aqui-hire the acquirer is most likely just after the engineers; the company already has a fully staffed sales organization. And venture-backed startups do fail, resulting in sales people being laid off and thus on the market. Your investors, especially VCs, should be able to help in your search, as they have very large networks.  Like engineers, a sales person can be a great individual contributor, but will fail when put promoted into a management role. You can’t afford to provide OJT – On the Job Training – to a sales person. Your venture needs a proven sales manager do build your sales organization and who is also great at selling.

In any hiring in a startup you need to lean on your network. That’s one reason I encourage startups to setup an advisory board early in their lifespan. Advisors should have great networks and should be willing to use their networks to help you find job candidates.

To find a great sales director you need to be a great talent tracker. Keep up with the startup world via social media, print media, conferences, trade shows, and informal gatherings. Great sales directors, like great engineers, will have multiple job offers. How to make an offer and how to compensate a sales director are subjects for another post. Keep in mind that landing a world class sales person is like sport fishing, once you get the hook in their  mouths is takes strength, experience, and expertise to reel them in.

Missionary marketing – what is it and why you might consider it


I can’t recall exactly when I first heard the term “missionary marketing” but it was years ago when I was an active entrepreneur trying to raise capital from VCs.  Most likely it was from a VC explaining to me why he didn’t want to invest in one of my startups. But the term is just as relevant to startups today as it was decades ago. Translating from
VC-ese, “missionary marketing” means that you – the founder – will have to spend considerable time and money educating customers. Tying up capital and founder’s time explaining to customers why they should buy their product and how to use it for business advantage seems like a poor case of resource allocation.

Certainly the best way to educate customers is “peer education” rather than “venture education.” I don’t have data to support this supposition, but I wager that many users of apps that have grown virally have benefited from friends showing friends how to use newly discovered apps like SnapChat – notorious for its opaque and confusing interface. One of the best quotes from Antonio Garcia Martinez’s book Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley is “… marketing is like sex, only losers have to pay for it.”

The disclaimer I’d attach to this quote is that while it certainly applies to consumer markets where if you haven’t built virality into your product you will go broke paying customer acquisition costs, it doesn’t apply in the hyper-competitive enterprise software market. I assure you no corporate IT staffer would be caught dead teaching a fellow IT person at a direct competitor how to use an enterprise program like Salesforce  – that would be a sure way to get fired. What some founders don’t seem to understand about the consumer market is it is a non-competitive market – consumers don’t try to keep their discovery of great apps secret, on the contrary, they can win social points for alerting friends to the latest hot app as Instagram was only a few short years ago. That’s the secret to what is now called viral marketing but used to be called simply “word of mouth.”

But on the contrary,  what if you are in a B2B market where customers will rarely talk with each other for fear of giving up competitive advantage? That’s where of necessity you will have to do missionary marketing. While cloud computing is the IT trend du jour today, just a few years ago the pundits all thought it would never fly. What company would entrust its IT functions to some startup’s servers? Salesforce was probably not the first SaaS application, but it’s certainly one of the oldest and most successful. If we used the Internet Wayback Machine we might be able to find examples of Salesforce’s marketing of it’s cloud based application. Check out the Salesforce website from March 7, 2000. Great list of benefits!

What lead me to think about missionary marketing was noticing this graphic from the article Rethinking Guided Reading to Advantage ALL Our Learners, which I noticed when browsing Flipboard.


A friend of mine has been marketing math education software to schools for years and we have often talked about the learning model in primary education. But what caught my attention was the middle column of this graphic. It looks a lot like how you would educate a corporate software buyer: first demonstrate your product; then provide customer testimonials and references to enable your prospect to share the experiences of satisfied customers; the provide hands-on system setup and training before finally letting the now-educated customer to use your product on their own successfully.

So while corporate business and IT executives are unlikely to warm to the idea that they are the students and you are the teacher that is the reality if you are launching a new and truly different product. And if you aren’t doing that then you are going to have to compete on price – good luck with that!



Enterprise sales may not depend on relationship building!


For years I, and probably hundreds of other mentors and coaches, have been preaching about relationships being the key to creating influence and sales success in enterprise or B2B sales.

I usually divide sales into two types: transactional and consultative.

The transactional sale is all about speed, lack of friction, and often price. The sale is based purely on the product; the customer could care less about the company and its reputation. Commoditized goods, that is goods with very low differentiation, like granulated sugar, are often purchased by a transactional sales process focused on convenience and price.

Consultative sales are completely different. The buyer is very interested in a productive long term relationship with the company. The company’s reputation for quality, reliability, customer service, and innovation all play important parts in the purchase decision. But the biggest part of the B2B sales process is often touted as the relationship between the sales person and their customer. Thus mentors and coaches of B2B startups tend to advise their founders to build relationships with target companies – that takes a lot of time and may be the reason that the enterprise sales process is lengthly.

But what if we are wrong about this approach? The short article on Medium entitled, Is Challenge A Better Way To Sell? caught my eye with its headline and challenged my assumptions about the sales process. The author works in an ad agency and her article is focused on a recent study by the IPA – Institute of Practitioners in Advertising. The study suggests that building relationships is not the most effective means of converting or changing opinion, which is elemental to selling a product or service.


The study suggests that in fact challenge is a far more effective means of converting or changing opinion. ‘People pleasers’ were considerably less successful. ‘Challengers’ outperform other approaches by a long way, showing in order to be the best, you need to push back. You can’t agree your way into influence.

If  you are selling B2B give some thought to acting as a challenger not as a relationship builder.  Your target customer needs to change to adopt your product. By diplomatically challenging their assumptions about why they use their current product you can gain engagement. And engagement is the first step in creating a customer.

the reality that the best performers actually do most of their work before the event of the pitch. They research the reality of their target’s position, before attempting to alter their opinion.

Understand why and how your customer adopted their current product. How long they have been using it? Is the product a company standard or only used by a specific functional area or a team? Have they changed other products in the recent past? Your goal is to gain the deepest possible understanding of the relationship between your customer and their current product or way of solving their problem. Then you can intelligently, but not abrasively, start to challenge each of those reasons or assumptions one by one. You need to understand why the product was chosen better than your customer. It’s hard to argue with someone who knows more than you!

The funnel is the wrong sales model!


I’m not a sales guy, but having been in multiple companies where I have had a sales force selling my products, I’ve worked closely with sales people. My understanding of theB2B sales  process was that of the classic funnel: the job of marketing is to generate leads that fill the top of the funnel. Then sales takes over to qualify those leads. Once leads are qualified either an inside or outside sales rep starts the actual selling process: arranging for demos, setting up meetings, collecting prospect feedback, determining who the decision makers and influencers are, providing testimonials and other information. The goal is to move prospects in a linear fashion over time from qualified lead to actual customer. This linear process could take anywhere from weeks to month.

As a mentor of startups I generally find zero sales experience or expertise amongst founders, who are virtually all engineers. Occasionally they bring in a “business type” – often an MBA from MIT or Harvard – who might have more sales experience, but is often brought in as COO or VP of Business Development. As a result I end up providing short tutorials on the sales and marketing process and recommending all the MIT founders participate in the great sales seminar offer by The MIT Venture Mentoring Service. The only downside of this seminar is it’s only offered once a year, so often my mentees have to start the sales process without its benefits.


Well I got the proverbial shock to my system from the Forbes article If You Think The Customer Journey Is Linear Or A Funnel, New Research Suggests You Are Wrong by Kimberly A. Whitler. Gartner, a pre-eminent research and advisory service firm presented the findings from their annual research project at a marketing roundtable she attended.

I’m going to briefly summarize Gartner’s findings, but I’d say this article is required reading for all B2B startups!

What Gartner found is that B2B sales process is more like a maze than a linear process. The sales process is really a set of jobs that the prospect or prospects need to complete in order to become your customer. Only by understanding what these jobs are and how you can help your prospect to complete them will you be an effective B2B sales person.


The jobs that comprise the he buyer’s journey: 1) finding decision-enabling information, 2) validating the information acquired, and 3) driving alignment among key internal stakeholders (according to Brent Adamson from Gartner, the average B2B firm has roughly seven internal stakeholders to align). What is important is that the buyer will go in and out of all three sets of jobs; rather than being a linear process, it is a concurrent process of searching for information, validating, and aligning key stakeholders across time.

So rather than attempting to either push or pull your prospect through a linear process to buy your product ,as a sales person you need to be their guide through the B2B maze of information seeking, validation, and driving alignment. The sales person needs to be a guide, an assistant, and to work in service to the prospect. The great thing about this new, far more sophisticated model, is that founders don’t have to unlearn the old funnel sales funnel model – they can start fresh understanding the maze they need to help their prospect navigate. It’s the old mentors like me that need to unlearn the sales funnel and get familiar with the maze model.

Six ways to grow a company


While I do read Harvard Business Review (HBR) articles about entrepreneurship found by Flipboard I generally find them to be far too long, dense, and abstract to be of much interest to startup entrepreneurs. But on occasion I come across an article which is well worth summarizing and annotating for this blog.

Such is the case with the article The 6 Ways to Grow a Company by Gino Chirio. Decades ago when I was General Manager of Educational Software at Addison-Wesley Publishing Company I was taught that there are four ways to bring products to market:

  1. New products to new customers –  by far the hardest and also the strategy I inherited from my predecessors who ran the educational software division.
  2. New products to old customers – while still a challenge at least you have the advantage of knowing your customers. Or so you would think.
  3. Old products to old customers – This was the textbook publishers strategy. These companies called old products the backlist. Having a deep backlist was the key to profitability, for once the cost of developing the product was recovered the profit margin was high and the cost of sales low. As opposed to the front list, the new products published each year.
  4. Old products to new customers – this is the way to increase your customer base but often entails competing against entrenched vendors.

The HBR article is far more sophisticated and detailed than the simple 2 x 2 matrix above.

  • New processes. Sell the same stuff at higher margins: Cut production and delivery costs, automate for efficiencies, cut fat in the supply chain or manufacturing, and utilize robots.

  • New experiences. Sell more of the same stuff to the same people: Increase retention and share by powerfully connecting with customers. An example is the Apple Store experience, which many would argue is as compelling as the company’s products.

  • New features. Sell enhanced stuff to the same people: Add improvements that drive incremental purchases. An example of this is every new phone Apple releases, with better cameras and so on.

  • New customers. Sell more of the same stuff to new people: Introduce the product to new markets with needs similar to your core, or to markets where it might address a different need. For Apple, this goes back to reaching the mainstream rather than the design community.

  • New offerings. Make new stuff to sell: Develop a new product — not just enhancements. Find new needs to solve within existing markets, or invest in a new category. Think HomePod or the iPod.

  • New models. Sell stuff in a new way: Reimagine how to go to market by creating new revenue streams, channels, and ways of creating value. This can be as simple as moving to a subscription model, or as transformative as Apple’s creating iTunes.

The key question I ask mentors in the first meeting is what is their goal?

Do they want to create some technology that can be licensed, providing them with a nice revenue stream and leaving the dirty work of product development, marketing, sales, and support to a company which has already built out those functions?

Are they interested in creating a product, which they could sell, generating a nice financial gain, and freeing them to move on to creating another new product?

Do they want to build a company designed to be sold for a nice multiple and leaving them open to either continuing with the acquiring company or setting out again on the path to creating something new?

Or is their intent to create a sustainable company with a very strong competitive advantage and a product line that they could helm for years into the future?

And the option I’ve yet to have a founder say is their intent: create a plug-in or other feature for an existing technology that they could license or sell?

The answer to these questions will define if they are a growth company or not. While customer revenue is by far the best way to finance a growth company it’s quite rare. Most founders who want to build a growth company need to bring in outside capital. If they do I highly recommend Gino Chirio’s article. Decide from get-go which of the six categories of growth to pursue. Obviously some of these categories just don’t apply to a startup: selling the same stuff at higher margins or selling new experiences to existing customers, just don’t apply to a startup. Nor does selling new features to an existing product. The only category that make sense for a raw startup are new offerings. With that category the default for a startup there is one more decision: do you attempt to sell stuff in a new way? Today the subscription model is the holy grail for startups as it provides a predictable income stream. One of the maxims I preach to my mentees is Don’t try to innovate on more than one front. Startups lack the resources to both develop a new product and develop new ways to sell it. The challenge is to find the best existing way to bring your product to market, the best go to market strategy.

How you will sell is largely determined whether you are selling a product or a service or both. Is your product digital with a vanishingly low cost of manufacturing or is it analog, requiring significant capital upfront for manufacturing?

Finally, whatever your decisions are made, make sure you and your founders are aligned on intention. So long as that is true differences of opinion on execution are welcome, but once a decision on execution is made everyone must get behind it. Too often I’ve seen a member of a team who violently disagreed with a major execution decision only to seem to go along with it. But by not putting their whole effort behind that decision you end up with a passive aggressive team member. Hard as it may be you need to root out passive aggressive team members immediately! They are the proverbial rotten apple that spoils the barrel. Again I’ve see founders be afraid to confront the problem team member and the venture flounders as a result.

Making the right decisions are a challenge and models like those in the HBR article can be helpful. But the right decision is meaningless unless you align all your venture’s resources behind it.



Cost versus Value Pricing


I’ve written previously about the challenges startups face in the post Pricing can be strategic. An old story that’s probably apocryphal came to mind yesterday while I was writing another post. (I find I often find ideas for new posts in the midst of writing a current one.)

I’m sure that when you say Tesla these days, 95% of the people believe you are talking about Elon Musk’s electric car company and most of them will have an opinion about Musk, his car company or both. And in fact when you use Google to search for Tesla, it’s the car company that comes up first.

But there’s another Tesla, Nikola Tesla, one of the most prolific inventors of all time, though not one of the most successful of entrepreneurs. And if you search for Nikola autofill will present you with Nikola Tesla first.

There’s a lot to be learned about Tesla’s life for any entrepreneur and to this point there are far more books about Nikola Tesla than Elon Musk. Not having read any of them as yet I can’t make a recommendation but if you search Amazon for Nikola Tesla you will find an amazing number of books about Tesla as well as at least one by him.

One of the options in pricing is value pricing. Harvard Business Review has a very helpful article entitled A Quick Guide to Value-Based Pricing by Utpal M. Dholakia.

But here’s the story about Tesla and how it’s a great example of cost-based pricing vs. value pricing.

Nikola Tesla visited Henry Ford at his factory, which was having some kind of difficulty. Ford asked Tesla if he could help identify the problem area. Tesla walked up to a wall of boilerplate and made a small X in chalk on one of the plates. Ford was thrilled, and told him to send an invoice.
The bill arrived, for $10,000. Ford asked for a breakdown. Tesla sent another invoice, indicating a $1 charge for marking the wall with an X, and $9,999 for knowing where to put it.

Keep this story in mind as your startup struggles with what pricing model to choose. We can’t all be Nikola Tesla, but in this instance at least, value pricing was the best choice and it can be for you, though it may also be the most difficult, as value is in the eye of the beholder. So make sure you know who the beholders are and what they value!


Questions to ask at a first sales call

sales meeting

I’m a believer in always getting to meetings early. But on Tuesday ,due to my calendar dyslexia, I managed to show up at 10:30 a.m. for a noon mentor meeting!

But the staff at The Venture Mentoring Service were unfazed and gave me a conference room to work in. But to compound my mixed up morning I also managed to forget my iPad and I’m too fat fingered to write more than a text or short email on my iPhone, wasting valuable time wrestling with Apple’s autocorrect and losing.

So I got out my trusty pen and paper, both already booted and waiting for my words of wisdom.

I’ve had a few mentor sessions recently where the founders were at the stage of talking with prospective customers for the first time and so I gave them my two classic closing questions:

  1. What questions should I have asked of you that I didn’t?
  2. Who else in your company or elsewhere would you suggest I talk with and could you please give me an introduction?

There are a number of other questions that should precede these two closers, so here’s what I managed to jot down off the top of my head, the only part that’s working these days. Once you’ve gotten introductions out of the way and heard your customer’s objectives for the meeting you can move into the closing phase of the meeting:

  1. Have you ever tried to solve this problem we’ve been talking about before?
    1. When?
    2. How?
    3. Did you use internal staff or an outside firm?
    4. If an outside firm, what criteria did you use in selecting them?
    5. If internal resources, what department(s) in the company were involved?
    6. If the solution failed, do you know why?
  2. What products or services similar to ours are you using or have you tried?
  3. Do you have the authority to purchase our product? If not who does?
  4. Who else is involved in purchasing technology products in your company?
  5. Would you be willing to run a pilot test with us? If so, let’s plan on working out how we’ll judge the pilot’s success and what the next steps would then be.
  6. If we do run a pilot with us will you be the technical (or business) contact? If not can we meet with the firm’s technical or business contact?

It’s very important to have business and technical contacts on both sides of the table. Don’t leave without knowing those contacts.

Of course, there are many other questions you might ask. Just be sure to find out ahead of the meeting how much time you will have and who will be attending (name and role in the company – titles don’t always tell you the latter).

One exercise I recommend is to sit down with your team and have one of you take on the role of the prospect. That person’s job is to come up with every possible objection to your product or service. The other members of the team’s job is to come to address those objections. Then turn this role playing exercise into a document your sales team can use to prepare for sales meetings. It’s always powerful to anticipate a customer’s objections rather than waiting for the customer to voice them.

As part of the sales call you will most likely be asked to compare your product to competitors. Avoid those terrible check box comparison grids – they will either bore your customer or stimulate them into focusing on your competitor’s product not yours. Rather you should focus on why your product is a superb solution, giving very concrete examples, not abstract or highly technical reasons. Best of all is to tell stories about how your product either displaced a competitor’s or was chosen instead. Success stories are the best stories. You want to keep the customer focused on your value proposition, what makes your product both different and better. And rather than get into technical details, foresee the typical concerns of corporate IT:

  1. How easy is it to integrate your product with the their legacy products? Can your product read and write the necessary file formats?
  2. How much training does your product require? (best answer is “none”)
  3. What installation problems have you run into? (“None” is not a good answer. Tell a story or two about how you have overcome installation problems. Much more creditable than saying no one has ever had a problem.)
  4. Can I talk with other customers who have been using your product?
  5. Tell me about how you will keep our data private and our application secure?

Keep in mind all these questions are based on on one goal: to get the next meeting with both the business and financial decision makers. Or if necessary, the next meeting with the firm’s technical team. Don’t quit when you’ve gotten agreement to a next meeting. Make sure you set the agenda, the goals and attendees in addition to date, time, and place.

A typical corporate sale might involve three meetings: the initial call by the sales person, (in person or via a video conference), a follow-on meeting with decision makers and/or IT staff and a closing meeting where you may want to bring in your CEO and/or founder to help you close. (With many calls and/or emails to coordinate schedules and answer questions.) When a small company is selling to a big company the major question for them is “will you be around to support this product?” Meeting the CEO and hearing about your investors can help address that issue.

There are pros and cons to sending your sales presentation ahead of time. On the pro side your customer might just review it before the meeting, saving precious meeting time. But don’t count on it. People don’t read is one of my maxims. On the cons side you lose the ability to change the presentation before the meeting. Well you can of course change it, but you don’t want to confuse your prospect by having two different versions of the same presentation. What I recommend is you email your 30-second pitch to your contact. That way he or she can easily forward that very short and engaging (!) email to any colleagues who will attend that meeting. Your chances of having them read a short exec sum are far higher than having them review your presentation in advance – but don’t count on it. Start all meetings from square zero whether or not you’ve sent a document in advance. That refreshes everyone’s memory and gets the entire customer team on the same playing field.

So what are you waiting for? Get your customer call list together and start booking appointments!


Sales calls are all about the conversation, not the presentation!


As I’ve written elsewhere, a presentation should be a means of getting to a conversation, usually with investors, but it could be with prospective partners, job candidates or attendees at an event. Too many founders tend to treat the presentation as an end in of itself. Sales calls need to be a conversation, not just a presentation. A dialog, not a monolog. Because while you are busy presenting your audience’s mind may wander, they may get bored, impatient or even irritated. Even if none of those emotions transpire they may feel frustrated as they want to respond, but etiquette usually prevents most people from interrupting. The one exception I’ve found is VCs. Much to their credit they have no hesitation about interrupting your pitch to ask questions. And that’s exactly what you want, so don’t be thrown and don’t attempt to herd the VC back into your presentation. Take advantage of their interest and answer on the spot. In fact I’d advise anyone pitching a VC or group of VCs, to start their presentation by stating that you would welcome questions at any time. This is where another trick used by experienced pitchers comes into play. Have a set of slides that go into detail about the salient points in your presentation and where you think VCs will probe. Your data about the size of the market is one obvious point. So instead of packing your market opportunity slide with an eye-glazing blizzard of facts and figures, keep the presentation slide simple and have backup slides readily available. So when you get that interruption: “Ok, so it’s a big market, we get that, but what’s its growth rate?” you can say, “Glad you asked, let’s take a look at this historic chart of sales of VR equipment over the past 5 years.”

I teach my mentees to use examples and to be specific. That’s why I was happy to come across a great example of turning a presentation into a conversation in an article that the intersection of two of my major interests: sports and real estate. Leave it to the New York Times, which has a real estate sweet tooth to come up with that articleInside the Hamptons House Where Kevin Durant Hosted N.B.A. Suitors in 2016, and the title on the continuing page in the print edition of The Times,  An East Hampton Estate Became the Site of a Significant Courtship by By Malika Andrews and Marc Stein. Just in case you aren’t a Times reader or an East Coast millionaire, The Hampton are the playground of the rich and famous. As a free agent, Kevin Durant, an all-start 7 footer, needed a place to meet one of his  six suitors: the Golden State Warriors, the San Antonio Spurs, the Miami Heat, the Los Angeles Clippers, the Oklahoma City Thunder and the Boston Celtics — who would have Tom Brady in tow. Here’s the money shot of the article. Make no mistake, these six teams were there to sell themselves to Mr. Durant.

The front door of the current home opens into a spacious living room with tan couches on the left and a large, round, black table with six chairs on the right — suitable for meetings with N.B.A. teams. It was in this room that the elaborate virtual reality presentation that the Warriors prepared for Durant, to give him a glimpse of what life at Oracle Arena would be like, malfunctioned. To their relief, Warriors officials later learned that Durant was happy to take advantage of the extra time to chat with his future Hamptons 5 colleagues and hear more from them directly about how they thought the partnership would play out.

It was the Warriors who won Durant over. But who knows, if their VR presentation had worked it might have prevented him from talking with his future team mates and hearing what he wanted to know about joining their team.

So consider cutting right to the chase – skip the fancy VR presentation and spend your time working out how you will jumpstart the conversation with your prospective customer and how you will help guide it to cover the points you want to make. Some times technology works best by not working at all!


Let the customers pivot you!


I don’t know about you, but I’m getting tired of hearing about startups “pivoting” or the question, “When did you pivot?” VCs told me that virtually every startup ends up quite differently than their initial business plan indicated –  back in the old days when startups actually had business plans. It was no big deal then and shouldn’t be now.

Rather than constantly pivoting in search of the holy grail of product/market fit, your venture may be better served be letting your customers pivot you.

The New York Times story WhatsApp Co-Founder Leaving Facebook Amid User Data Disputes by Sheera Frenkel and Cade Metz was the first time I learned about What’sApp’s history. A great illustration of customers driving a startup pivot:

Originally, the service was a way for people to tell friends and family whether they were available to text and talk. But it soon morphed into a general and free way of sending messages without the help of the services run by cellular network operators like Verizon and AT&T.

WhatsApp became enormously popular in countries where messaging services were expensive or where social networks like Facebook had not taken hold.

Notice how the author’s use the term “morphed” as the term for a customer-driven change in business direction compared to “pivot” which is a founder-driven change.

So what’s the lesson for founders here? First it’s all about the team. I recall a prominent VC telling me he would take an A team of founders with a mediocre business plan over a B team of founders with a great business plan. The A players will discover a new and better direction for the startup, whereas the B team will find ways to screw up a great business plan. Second, as Jeff Bezos has continually reiterated over the long life of Amazon, listen to your customers!

I often find that startups are very focused on raising money and getting intros to prospective investors and customers. After that their priority is getting out their MVP. Only rarely do startups put the customer first. I know – I’ve been a product first guy, which is why so many of my startup ideas failed to turn into viable businesses. So how do you go about listening to your customers. The are two basic modes: primary and secondary, just as there are in market research. Primary means getting out of the office and talking to customers or even cold calling from a valuable list, as MIT-related startups often do with the MIT alumni directory. And attending events where customers gather and making an effort to buttonhole them there or set up a time to talk.

The secondary mode of listening to your customer is one favored by nerds like myself or who aren’t comfortable talking to strangers – analytics. And today analytics are just a click away, like WordPress analytics for bloggers or Google analytics for web sites. Every program, app, web site, anything customer-facing should be instrumented for analytics from inception.

But there are many other ways to listen to customers – including my favorite, listening to non-customers. For everyone who downloads your app there may be a dozen who view the listing in iTunes or Google Play but don’t download it. And for everyone who downloads the app only a few may use more than once. Finding ways to capture the contact info of the window shoppers, those who look but don’t buy, they joy riders, will help you find what every sales person has to deal with in face-to -face customer interactions, otherwise known as sales calls: objections.

Every prospect will have some objections to your product: it’s too expensive, it’s too slow, it has a clunky UI, and on and on. Only if your value proposition is strong enough will prospects overcome their objections to become customers. So it’s vital for both sales and product development to seek out these objections. Don’t take “no” for an answer! Always ask “why” – why won’t you buy the product? When products don’t sell I often find founders who leap to the conclusion that their app is too expensive, or lacks certain features of competitors’ apps. Those who leap to conclusions are bound to fall and hurt themselves. So cherish those objections! If a prospect is interested enough to give you an objection they are showing engagement. The worst reaction a prospect can give you is “interesting” or “cool.” What you want is either a sale or to learn why they won’t buy. If you find a consensus amongst customers and prospects that they need feature X then and only then do you add that feature.

Letting the customers pivot you won’t necessarily turn you into the next WhatsApp, sold for $17 billion to Facebook. But it will help you learn. Rapid learning and adaptation are the two keys to survival in the Darwinian landscape of the startup world.

Support – the forgotten venture function

james dyson

I’ve been on a bit of a buying spree lately and I’ve made a couple of goofs in my rush to enhance my audio system. So I’ve had to return a couple of items, which got me into dealing with a couple of companies customer support function. Sweetwater is a site that sells professional audio equipment and musical instruments. I had neglected to pay attention to their warning that there were no returns on special orders and went ahead and bought a German headphone amplifier. When it arrived as soon as I opened the carton I realized I had goofed – while it was a professional product with professional standard XLR connector on the back, the front used the typical consumer stereo phone jack. The was a deal breaker for me as I use headphones with an XLR connector and I had no interest in having to buy an accessory cable adapter and giving up the benefits of balanced audio output. So I decided to bite the bullet and return the amp to Sweetwater.

Customer support kindly reminded me that the headphone amp was a special order and therefore no returns were accepted. But when I pushed a bit the very gracious customer support rep said she would talk to “merchandising” and see what she could do. Hours later came the verdict. I could return it, but it would cost me a 15% restocking fee. Ouch! So I pushed yet again, saying the unit was still in its shrinkwrap and could easily resold as new, because it was. Long story short, the company took back the amp and gave me a full credit on my return.

This experience was in great contrast to another customer support event I had recently. I bought my wife a very expensive English teapot. While it doesn’t boil water any faster than any other teapot it looks elegant doing so or even just sitting there on the stove. But somehow we lost a part to the top of the pot. So  I called the manufacturer and asked to buy a replacement part. But no matter how hard I pushed and how upset I got they steadfastly refused to even admit that such a part existed, let alone that they would sell it to me! They not only created one very unhappy customer, I’m reminded of their terrible customer service every time I use or even see their product. Remind me to write to their CEO!

There’s a saying, “One satisfied customer may tell one person about their experience, but a dissatisfied customer will tell twenty people.” While I doubt the accuracy of this apocryphal saying, especially in our age of social media and the constant demand for “Likes” and ratings, the principle is sound.

These experiences and others like it reminded me how important customer support is to a technology company or retailer that sells tech products, that often change frequently and may have hidden gotchas. I thought back over the past 10 years of mentoring and realized I couldn’t think of a single startup that mentioned customer support in their presentations or their mentoring sessions. Probably because most of these early stage companies had no customers to support!

As so often happens when I’m thinking about a business issue one of the three newspapers I read (New York Times, Boston Globe and The Wall Street Journal) has a relevant story.

Today it was the Journal with an article enticingly headlined as What Actively Managed Funds Can Learn From Vacuum Cleaners By Mike Cherney.

Dyson, which manufactures appliances including vacuum cleaners and hair dryers, would send replacement parts to customers who call about repairs, Mr. Formica said, adding that the company would call back to make sure it’s working.

Founders take careful note of the last sentence! I can’t remember ever having any manufacturer or retailer calling me back to check to see if I was satisfied. Dyson is actually a high tech company masquerading as a vacuum cleaner maker. Check out James Dyson when you have the time. He’s quite the inventor and entrepreneur!

Mr. Formica added: “No questions, no quibbles. That is client experience,” It’s not just the customer support result, as in my story about Sweetwater, it is about the customer experience. Companies need to realize that these days that is what they are selling, not product, not services but customer experience!

Cousin to customer support, which focuses on administrative tasks like handling returns is technical support, that is supposed to help customers who are having problems using their products. I’m sure you all have your horror stories about the failings and foibles of tech support, especially for computers, ancillaries, and smartphones. Quite a few years ago tech companies stopped providing phone tech support at all, leaving customers to wade through their voluminous help files unaided.  I’ve gotten so frustrated trying to find a phone number and then battling through voicemail phone trees that I’ve basically turned to Google for tech support. Searching Google is not only faster, it’s also often more up to date on how to fix or avoid problems with your products. So what is wrong with that? Well quite a lot! As traditional product companies have long known, customer support is part of sales, known as “the post-sales process.” It’s not only an opportunity to burnish the firm’s reputation it can also be an opportunity to learn what makes your customers tick and perhaps even to sell them an accessory or complementary product that they may not have known about.

So founders, pay attention to the customer lifecycle and customer retention! Customer support and tech support can help you please your customers, retain them, create positive and powerful word of mouth, and generate additional sales. You should budget for both customer and tech support and have both report in to sales. One story I heard, I think it was about Microsoft, was that software engineers were required to field tech support calls from customers! This turned out to have a significant impact on tech support calls, as software engineers had a strong incentive to avoid bugs and duty on the tech support hotline. What a great way to get your developers close to the customer! Consider doing this yourselves.

I hope I start seeing presentations and hearing discussions about support this year. Amazon has proven with their incredibly friendly  and efficient return policy and process that great customer support can help make a company great.