As a startup founder, you know that making sales is as important as building a great product, and is often vital to attract investments. However many founders lack sales experience and cannot afford to hire a sales team. If this is you, then you have to learn how to sell. The following ten elements are key to an effective sales program.
Sales is a process of moving prospects through a flow, not a one-time event. The key is to move the customers one step at a time from initial awareness to desire to buy to a completed sale. Each step increases their commitment and their understanding. Sometimes all you are doing is “selling” prospects to watch a video or attend a webinar. A sales deck is only a small part of the requirements. It is wise to use a CRM system to manage all the leads through this journey.
Read MoreIt is critical that management choose the right collaborative communication tools for the organization. The right selection can set up effective workflows and reinforce the right culture. Collaboration tools can make a big difference in how well the business scales up. It is up to leadership to make the choices, with the input of staff, and then reinforce best practices.
Much can go wrong if a company defaults to using just email. How often have you seen the following? A senior executive asks the management team an important question such as: What are the 4th-quarter milestones we promised the Board? What are the product-return policies we established?
Read MoreMore startups are using established distributors as an important marketing channel. This can be a win for both sides. Established companies often want to add more to the basket of what they sell to their customers to increase revenues as well as deepen customer relationships. And they are more willing these days to include goods and services from startups, often because it helps them appear innovative. Startups want access to lots of customers and to minimize their sales and marketing expenses, and are happy to yield the wholesale margin to a distribution partner.
A further bonus is those distribution partners might invest in or acquire the startup once the new product becomes a hit. Many established companies have established venture funds in recent years. Many know they need to source much of their innovation from the outside.
Building effective distribution partnerships is a combination of marketing and sales skills. Companies that consider distribution partners as like a commissioned salesperson, sometimes referred to as “coin operated”, rarely succeed. Instead it is vital that companies consider both how to sell-to (making it worthwhile for the distribution partner) and how to sell-through (showing partners how to sell to their customers).
Success comes from pitching the deal well to the optimum distribution partners, negotiating the best agreement, then putting in the time and effort to make the partnership a success.
Read MoreYou are a startup CEO, you have raised some seed capital, now you have a board, and you have your first meeting coming up. That is good news for you, your business, and your investors. It may seem daunting and extra work on top of everything else you have to do.
I hope you will come to see having a board as a good thing, because you will:
Get to step back from the day-to-day challenges and have a clear view of your opportunities and challenges
Benefit from the perspective of experienced people who know different parts of the business, care about results, and have a fiduciary responsibility to your shareholders
Take care of important details such as board resolutions, cash flow statements, cap tables, etc. now, rather than later when investors may require them and you forgot important items
Get help laying out the most important milestones and projects
Read MoreYou have a great new business idea, you have built the minimal viable product (MVP), you have some initial revenues -- and now you want to raise some angel funding. What do you do next? Before you reach out and apply to every angel group in town, consider the following.
1. Determine how much you need to raise and the milestones you will hit
Founders “sell” milestones to investors and leave it to investors to ask themselves two questions: 1. Will this team hit these milestones with this amount of capital raised? 2. If they hit the milestones will they be attractive to the next round of investors?
Be cautious about how much money you ask for in this round. Ask for only enough to prove the next level of market and product traction, building in a bit of a contingency. If you shoot too high you may have to score with multiple angel groups, spend the next six months fundraising, and risking having to return the money if you do not complete the round.
2. Create your elevator pitch
Write a 30 second pitch that you could deliver in a ride in the elevator, with no props. Try it out on people and refine it until it is just right. This pitch could be your outline for your pitch deck, which avoids the common problem of including slides in a deck just because the writer already had some great graphics
Read MoreMany subscription services attempt to build their business by offering a Freemium Model, which means offering a free service to basic users while hoping a good share of users will upgrade to a premium plan and start paying for the service. The keys to success for this model are to maximize the conversion rate of customers who will pay, while keeping the free version attractive enough for customers to sample the service.
Companies experience a wide range of conversion rates, from Spotify’s amazing 27% to a more typical range of 1% to 4%. The conversion rate is a big driver of profitability, and finding a way to move from 1% to 2% is doubling the success.
The key is to design the model into the product rather than making it an afterthought. Think hard about how you will give your free users a great experience while educating and tantalizing them about what more they could get by paying the premium.
Read MoreFounders can rightfully celebrate when they successfully raise their angel round of investment. But now the tough work begins to take the company to the next stage. As an investor my advice for startup founders includes the following:
1. Lay in a plan to hit your key milestones & metrics.
You likely made promises to your angel investors for targets such as number of customers, revenues, profitability, product functionality, key hires, or filing for patents. Meeting or beating those milestones will be critical to raising your next round of funding, because investors will judge the company’s progress against those metrics and promises. Lay out specific plans for the metrics and KPIs (Key Performance Indicators) you will track and why, and the actions you will take to ensure you meet those milestones. Use whatever project management tools will work for you -- whiteboard, paper, or online tools. Be prepared at any moment to describe to investors your plan and your progress (good and bad) against it.
2. Put effective governance in place.
Most post-angel startups would be wise to put a strong board of directors in place to help guide the company. There should be at least one outside director who wi
Read MoreYou have a great new business idea, you have built the minimal viable product (MVP), you have some initial revenues -- and now you want to raise some angel funding. What do you do next? Before you reach out and apply to every angel group in town, consider the following.
1. Determine how much you need to raise and the milestones you will hit
Founders “sell” milestones to investors and leave it to investors to ask themselves two questions: 1. Will this team hit these milestones with this amount of capital raised? 2. If they hit the milestones will they be attractive to the next round of investors?
Be cautious about how much money you ask for in this round. Ask for only enough to prove the next level of market and product traction, building in a bit of a contingency. If you shoot too high you may have to score with multiple angel groups, spend the next six months fundraising, and risking having to return the money if you do not complete the round.
2. Create your elevator pitch
Write a 30 second pitch that you could deliver in a ride in the elevator, with no props. Try it out on people and refine it until it is just right. This pitch could be your outline for your pitch deck, which avoids the common problem of including slides in a deck just because the writer already had some great graphics
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