The May edition of Harvard Business Review magazine is full of articles focused on startups. Steve Blank is featured there talking about the Lean Startup method, which is required reading for all startup founders (grab a free reprint of that article titled “Why The Lean Startup Changes Everything“) and there are other interesting pieces related to dealing with VCs, an interview with Marc Andreseen and also an article about creating a company culture. But one of my favorites was “What Entrepreneurs Get Wrong” (note: requires HBR subscription to see more than a preview).
It’s all about sales
Always Be Closing!
The article is spot on when it says “Salesmanship is central to the success of any young company, and entrepreneurs ignore this at their peril“. Time and again I’ve spoken to startup founders at events, pitch competitions, and informal gatherings who not only think the benefits of their new idea are obvious, they also haven’t put much thought into how they are going to sell.
Sure, reading it and agreeing that sales is an essential part of a founder’s job is easy, much more difficult is actually doing anything about it. The HBR article, though, presents a nice framework that I think is in line with what needs to be done: get customer feedback as early and frequently as possible.
Incorporate sales into your development process
Typically you will see people wanting to build things before they start selling. If you are an established company with enough cash reserves to allow you to do that then go for it, but small businesses and startups are not that lucky even if they have V C backing. Instead, incorporate “sales” as early in your development process as possible. How? Get potential customers involved in giving feedback at your prototype, then get them to use an alpha or beta version, use them as sounding boards for all the nice features you think the product needs.
This is really just adapting the Lean Startup method and Customer Development framework you already know and love (right?) which calls for early and constant customer feedback, but with an emphasis on selling. The difference is that you are not only asking for feedback, you are trying to close sales as well.
Always Be Closing
The incorporation of “sales” into your processes as I said is not just to gather feedback, it is to really test your sales approach, your pricing, and the market fit for your product. You can get 100 people to tell you they like what you are building, but getting them to actually commit to buying it is another story.
I’ve been through this myself a number of times. In showing an early prototype to a company I asked them if they would like to be notified when it went live, to which they responded yes. So when we went live and called them to see if they would pay, they said no. See the difference? Instead of asking “will you pay $X” I had asked “can I notify you when we launch?”. Rookie mistake that you shouldn’t make.
When talking to potential customers and asking for their input, you will only get valuable information once you start treating them as prospects. Things like “So, having seen what we are doing are you interested enough to commit to X units?” or “Our price will be $x per month, so can I sign you up to start using it in May when we launch?”. Don’t be afraid of asking for money, after all this is what you have been working towards, to make a sustainable business right? And every “no” you get is gold because it gives you the opportunity to dig deeper and understand what about your product or service the prospect doesn’t like.
So if there is one thing you should do right away and that will have tremendous impact in your startup, is start selling.
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