There are many different approaches to winning deals with early adopters within a startup. I’m going to lobby against the approach of elephant hunting, which is a common approach for companies looking for that “quick hit” that takes their idea and gives them instant validation and stardom. To me, this is like going for a grand slam when the bases are empty. No matter how far you hit that home run, it will still just be one run. You haven’t found a repeatable way to score runs yet. The most successful startups found their success by starting small, hitting singles, stealing bases when needed, bunting somebody over. Once a few runs had crossed the plate, and the bases are loaded, THEN you go for the grand slam.
There are example of elephant hunting throughout a startups history – I highlight a couple here and an alternative approach to each phase.
1) Pre-funded startups – “We just need that one big customer to validate our idea and raise funding” – this actually works fine – IF that one big customer is big enough to fund you for a long time. In order to raise outside capital, you need to show that you have a market, not a customer. And you need to show that the market is repeatable – that if you find customers that have a specific need and budget, that your product fits the bill.
The best kind of funding is customer funding – deals. If you can’t do that consistently enough yet, then you’ll need to show that there is potential for a very nice size market. And you do that by talking with LOTS of people in that market – not just your friends. In fact, I’d suggest that you ignore your friends and go straight to people you don’t know. They won’t be afraid to tell you the truth. They don’t care about crushing your dreams. And those are the people that can help you the most.
2) Funded startups looking for traction – I love an old blog post of Steve Blank’s – It Must be a Marketing Problem – it is so perfect! This is the mistake of “we found a few customers, now let’s hire a bunch of sales people and the sales will come rolling in”. Once again, if you have not identified your repeatable sale, outside sales reps will NOT do this for you. The executive team are the right people to define this – and relying on sales folks to do this will fail consistently.
While many startups never get the funding they need, it’s surprising what a high percentage of companies that do raise funding still can’t reach liftoff. It comes back to the lack of Customer Development and identifying a scalable and repeatable sales model. Since you haven’t found the repeatable model yet, panic starts to set in when the sales team isn’t hitting their goals. Unfortunately, the chosen solution is almost NEVER a re-focusing on hitting singles. All of a sudden, the entire sales team has turned into Barry Bonds, and each one is expected to hit home runs. We all know what got Barry Bonds to go from a singles hitter to a home run hitter – but the funny thing is that he was a *really* good singles hitter. Great even. So, the fact that he needed some “help” to become a great home run hitter doesn’t negate the fact that he flat out knew how to hit the ball before he amped up to start hitting home runs.
I’d like to think that the proliferation of SaaS, cloud and open source has eliminated this phenomenon, but it’s still alive and well. This is the “let’s live off our kill for 6-12 months” style of sales. Find a customer that will spend a LOT of money on your product and keep the team funded for several months. It seems so attractive – a quick hit all at once, lots of money vs. smaller chunks from lots of customers (and of course the assumption that it’s too hard to close lots of customers, it’s much easier to close 1-2 big ones).
The common theme here is that the proven method for success is to search (and find) the repeatable sales model…. and the best way to do that is to hit singles, get a lot of people on base, and not let the “hope” of a grand slam with the bases empty invade your thinking and become your primary business model.
- Forgive and Remember
- Do You Accurately and Consistently Hit Your Close Dates?