This article is one of the 8-part series of evergreen topics that all startup founders face. It is based on what the mentors actually teach startups during the StepFWD pre-accelerator.
Our thanks go to Gv Freeman, Founder Coach & Growth Strategist, for helping founders efficiently sell their products.
If we assume that we are living in the fantasy world of the “10 easy steps to completely achieve X”, then selling your product is comprised of 6 straightforward steps:
- You find a company that can use your product
- You find someone in that company who will talk to you
- That person thinks your product is great
- You send them a proposal
- They sign the proposal and send you a check every month
- Everyone lives happily ever after
However, we have to call BS on this one. Every startup’s reality when it goes into the world to ask for money from prospective customers looks something more like in the following diagram.
To be comfortable with the idea that this is the process you will be facing, think about selling like the act of dating. When you start dating someone online you don’t ask them to marry you on the first date. There is a courtship process, you have to go on several dates and you may be dating for months, if not years before you ask somebody to marry you. Hopefully, your sales cycle is not years long. But the sales process is a lot like dating in that respect.
Putting it in sales jargon, some things need to happen to get potential leads to give you money:
- The Customer lifecycle – total strangers need to first visit you so you can turn them into leads who will become your paying customers, so delighted in fact that they will promote your product to the world
- The Sales & Marketing Journeys – when you are small, sales & marketing can’t be separated. A buyer will go through the marketing journey (from awareness to decision) intertwined with the sales journey (starting as a suspect to closing them as a customer)
Start with Why?
Many first-time founders believe that their startup should be able to scale quickly and have a hockey stick growth. That is 100% not true. What you need to do is build a product that people want to use or that they have already given you some feedback that they are willing to use.
Simon Sinek famously said that “People don’t buy what you do. They buy why you do it.” You must be aware that people won’t truly buy into your product until they can understand its WHY. And the way to truly discover the reason why somebody will buy your product is by solving one person’s / company’s problem at the time.
So the first sales should be relatively easy. If you already have a product built and you are employing a lot of sales techniques by the book, but things are not working very well, it’s probably because you don’t have a problem-solution fit yet.
You need to work on solving a true problem.
What? Market–Product Fit
Although you are in the process of building your product and slowly figuring out who to sell it to, at this stage in your startup this is the wrong way to achieve product-market fit. While you figure out what exactly will customers offer you money for, you should be thinking about it as searching for market-product fit.
These offerings should have a definable collection of features, components, or modules that you will offer to your customers for a fee.
- Features are a product’s traits or attributes that deliver value to end-users and differentiate a product in the market
- Components are a combination of features that, when grouped, create a piece of functionality
- Modules are a collection of features or components grouped around a specific subject matter or use case
To define all of these, you need to focus on productization, which combines the discrete pieces of your product into groups your customers will understand, find useful, and generate revenue. Begin thinking of your product and features as a series of switches to be turned on or off depending on the amount each customer is willing to pay.
Bear in mind that offerings should encourage users to upgrade based on their increased usage needs within the product. For self-service and transactions software, it’s advantageous to have a low barrier of entry for your lowest offering. And be aware that offerings should grow in complexity and cost as your business evolves. There are four common methods for defining an offering:
- Tiers, Packages & Editions (i.e. Basic, Pro, Premium)
- Modules & Add-Ons (Recurring or One-Time Pay Per Module)
- Usage (Pay Per Transaction)
Product-Market fit implies you are building a product then finding a market. Market-Product fit implies the inverse.
Who? Ideal Client Profile
Your Ideal Client Profile (ICP) is a set of qualities and characteristics that describe the primary type(s) of business(es) – not individual buyers – that would buy your product. Your ICP should be the primary target you approach with your initial sales and marketing efforts. For B2C companies, household demographics (i.e. $100k combined household income, 2 cars, 3 kids, and 1 pet) could be interchangeable with your ICP. This would translate to your Target Market.
Some of the key properties when defining your ideal client profile may include:
- Industry or Vertical
- Size & Number of Employees
- Decision-Making Factors
- Pain Points
- Business Objectives
- Notable Attributes
If your ICP represents the type of company that will buy your product, your persona represents the employees within that company that will buy and use your product. Personas are semi-fictional representations of the customers you will work with when selling your product.
While you are defining your personas, be aware of the following points:
- Don’t confuse yourself or your team with your personas
- Mid-market and enterprise B2B products will often work with multiple personas throughout the sales process
- B2C products will sell their products directly to one or more personas
- In the beginning, focus on your top 1 – 3 personas
- Your primary persona should be as detailed as possible
Specificity is crucial. If you’re marketing to everyone, you’re marketing to no one.
How? Document Your Sales Process
What should a startup do to close its first deal? To sell to your first customer, you should go start talking to people. You need to have a group of people that already have the problem that you’re solving. And you should be able to talk to them 1 on 1 and say “Hey, how can I get you to use my product to solve your problem?” That might be a 1 on 1 demo or taking them through an education process that says here’s how to use my product.
One way of doing this is to use one of the methods of the lean stack model called the mafia offer. This is an offer that your customers can’t refuse. One of the reasons why this approach fits amazing with early-stage startups is that you create the offer before you build your product. Maybe you can’t collect revenue that early. But if you haven’t actually sold someone and have them say “yes, I’m willing to buy your product”, then a lot of times, you shouldn’t start building the product yet.
There are a lot of methodologies that you can use throughout your sales process, to help you close a deal. Once you figured out what works for you the important thing is to document the whole process. Some of these methodologies are:
- Generating Suspects – through content, paid search, social media, or product-led growth
- Generating Prospects – using the BANT framework
- Generating an Opportunity – through the MEDDIC process
- And many more
1 on 1 communication is the best sales strategy. Start with your network and then ask for referrals.
What Is Growth Hacking? (and what isn’t)
If your product isn’t incredible, then no amount of time and money spent on growth hacks will make it any better. If your product isn’t useful, it doesn’t matter what type of growth hack you use.
Therefore, it’s important to note that growth hacking is not:
- A get-rich-quick scheme
- A way to add short-term customers that will eventually churn
- A spammy (or scammy) way of attracting new customers
- A way to improve an uncompelling product
Growth hacks are unconventional tactics used by companies to achieve explosive growth in a short period of time. Growth hacking is more of a mindset than a definitive set of tactics and it’s most effective when you are already experiencing growth.
The process of applying growth hacking looks something like this:
- Evaluate current marketing initiatives
- Set achievable goals
- Plan experiments to test your hypotheses
- Let it run
- Document your winning results, and share them with your team
Understand what your growth hacking is at a certain stage and don’t start growth hacking far earlier than you should. You have to have growth before you can start hacking it.
If you want to learn more about sales from GV, then apply until September 5th for the StepFWD 2021 cohort!
This article is part of the StepFWD your startup series. Do you need resources for your startup? Check them out: