Intro 0s
- Pete Kuman, YC group partner and YC Alum, will discuss the process of closing first Enterprise customers.
- The talk will focus on successive steps in the sales funnel: prospecting, outreach, qualification, pricing, closing, and implementation.
- The discussion will include tactical advice and lessons learned from Kuman's experience at Optimizely.
- The focus will be on Enterprise sales for software startups, but the talk should be useful to founders of all types of startups.
- Sales is the number one concern for most founders at YC.
- Sales is a learnable skill.
- Founders are often the only ones capable of selling their product in the early stages.
- Sales before product-market fit is different from sales after product-market fit and requires a founder's vision, credibility, experimentation, and a tight feedback loop.
- Technical founders have advantages in selling: expertise in the problem and product, and conviction in the product's ability to solve customer problems.
- Go through the steps of a typical sales funnel:
- Prospecting
- Outreach
- Qualification
- Pricing
- Closing
- Implementation
Prospecting 3m29s
- Prospecting involves finding potential customers and identifying specific individuals within those companies who might be interested in purchasing your product.
- A sales hypothesis helps clarify who you should be targeting.
- Example hypothesis: Marketers at small and medium tech, media, and e-commerce companies want to run AB tests on their websites but can't because off-the-shelf experimentation tools require users to write code. Optimizely will enable them to run AB tests without writing code.
- Identify companies that are likely to suffer from the problem your product solves.
- Use industry lists and filtering criteria to qualify companies and narrow your target list.
- Find the right humans at those companies and their contact information using tools like Apollo and LinkedIn Sales Navigator.
- Use tools like Apollo and LinkedIn Sales Navigator to find the right humans at companies and their contact information.
Outreach 5m15s
- To generate inbound demand and attract prospects, create technical content, build self-served demos, and establish yourself as an industry expert in online forums.
- Attend industry conferences and schedule meetings in advance, or try to obtain a warm introduction before reaching out to a prospect.
- When sending cold emails, personalize each message, keep them concise and focused, and clearly state your request.
- Avoid engaging with unproductive customers who provide misleading feedback or lack decision-making authority.
- Focus on identifying companies that are good customers and have a genuine need for your product, rather than wasting time on startups or pursuing a bottom-up approach for products requiring top-down adoption.
- Prioritize finding prospects who have the problem your product solves, the budget to purchase it, and the authority to make buying decisions.
Qualification 10m9s
- The first call with a prospect should focus on qualification, not selling the product.
- Founders often make the mistake of diving straight into their pitch without asking enough questions.
- Sales is not adversarial; it's about understanding the customer's problem and helping them solve it.
- Great salespeople spend most of their time listening to understand the customer's problem.
- Ask questions to uncover if the prospect has the problem you solve, cares enough to buy a solution, and has the budget.
- If the prospect is not a good fit, save time by focusing on more promising leads.
- A demo is an opportunity to show how your product solves the customer's problem, not just show off features.
- Think of a demo as a script for a great movie with a flow and a clear purpose for each feature shown.
- Use storytelling to demonstrate how your product solves the main character's (the user's) problem.
- Great demos feel like good stories, have magic moments, and are personalized to the audience.
- Tailor the demo to the customer's company using their specific information.
- A successful demo leaves the prospect and their team convinced that your product can solve their problem.
Pricing 15m0s
- Ask questions to make pricing easier:
- How much is the problem costing the company?
- How many people maintain the in-house solution?
- What's the budget for solving the problem?
- How much is spent on competitors?
- Don't publish pricing until you understand customer needs.
- Pricing involves a lot of guessing initially.
- Think of each pricing conversation as an opportunity to experiment and learn.
- Founders often charge too little or make the product free for feedback.
- Higher prices can help determine if customers need the product.
- High prices make customers more serious about the purchase.
- Provide slides or a one-pager explaining pricing and product benefits for prospects to share internally.
- Don't spend too much time on pricing initially, focus on learning.
Closing 18m13s
- Closing is not a single conversation but a process from deciding to buy to actual purchase.
- Big companies have formal procurement processes involving security, privacy, legal reviews, and compliance sign-offs.
- Smaller companies may have less formal processes but expect redlining with their legal team.
- Avoid surprises by ensuring what seems like a done deal is actually complete, as it may take weeks or months of additional back-and-forth or fall through.
Avoid surprises in procurement process 18m58s
- Ask your prospect upfront about their software procurement process and who needs to sign off.
- Move through the procurement process quickly.
- Ask explicitly if there are steps like filling out a security questionnaire that you can start early.
- Keep legal documents simple, use open-source templates.
- Keep timelines and scope of work out of the legal contract.
- Your prospect (Champion) is your biggest ally, communicate with them constantly.
Implement 20m2s
- The biggest mistake founders make is thinking implementation is the customer's job.
- Customers are buying a solution to a problem, not just a product.
- Ask marketing leaders about the work required to implement your product early in the sales process.
- Build detailed implementation plans with marketing and engineering leaders before signing a contract.
- Treat customer implementation as a high priority project within your company.
- Create a shared roadmap, assign task owners, and set up regular check-in meetings.
Outro 22m1s
- Sales is a crucial skill for founders, devour everything you can on the topic.
- Peter Kazanjy's book "Founding Sales" is a fantastic free online resource.
- The best way to learn is by doing, just get started and make mistakes.
- Selling will start to feel natural and become a useful superpower.
