It’s time for another of my quick primers on the enterprise IT business. This one is about sales. First I’ll run through some generalities; then I’ll link you to some previous posts; after that I’ll close with a collection of practical tips.
This is, to put it mildly, an important subject. In particular, there are only two kinds of enterprise IT CEOs:
- Those who need to understand sales because they don’t have anybody else to do it for them.
- Those who need to understand sales because they do have people to do it, who need to be managed and helped.
Every enterprise IT CEO needs to be heavily involved in sales.
Of course, a few tips do not a salesperson make. Selling is a complex process, with many steps. Worse, it’s tough for somebody to explain to you what the process is, in part because there’s a kind of recursion involved — a big part of what you do in the sales process is establish what the process is.
And that’s in both senses of “establish”, namely “figure out” and “bring into being”.
Other inherent difficulties in selling include:
- Selling involves getting money from people. People don’t like to part with money.
- Buying from you often involves a lot more commitment — and foreclosure of other options — than merely writing you a check.
- Usually, a sale involves getting agreement from multiple people. These people often have different views, biases, and motivations.
- When attempting to impress influencers, press and analysts alike, pitch emails are much more important than actual press releases. By that I mean, among other things:
- The old cliché that your first few seconds of impression-making are much more important than all the rest applies in this case.
- Unless the pitch email succeeds, your press release won’t even be looked at.
- Unless the pitch email succeeds, you won’t get to have a verbal conversation with the influencer.
- Pitch emails can, just by themselves, harm somebody’s impression of you, in two overlapping ways:
- They can damage your credibility.
- They can insult the recipient, by giving the impression that you think he’s dumb enough to be fooled.
- Few companies act as if this is true.
My support for these views includes:
- My own reactions as an influencer.
- My conversations with other influencers.
- My knowledge of how PR and AR work get done.
- Common sense.
My top tip for pitch emails is: Approve the pitch emails a PR firm writes before they are sent out!!!! There are two big reasons for this: Read more
Engineers used to wonder what the point of sales and marketing people was. If a product was good, wouldn’t customers make the correct decision to buy it?
Nobody I know seems that naive anymore, but I did just get a similar question, which may be paraphrased as:
Why do investors judge a startup on the CEO’s pitching ability? Shouldn’t they focus instead on the actual merits of the company?
Most of my answer boiled down to:
Investors’ top concern is management’s ability to execute, and pitching is — or simulates — a large part of execution.
In particular (and now I’m quoting my own email directly):
- A CEO is a company’s chief salesman in one-on-one (or one-on-few) selling situations.
- A CEO is a company’s chief promoter in public forums, or in one-on-one influencer marketing situations.
- A CEO is a company’s chief recruiter.
- A CEO needs to align a company behind a shared vision, and specifically a shared understanding of the vision.
- A CEO needs to persuade employees to do things they don’t feel like doing.
I finished with one other point that didn’t fit the template, namely:
If you can’t articulate a good pitch, why should we believe there’s a good story in there at all?
I think the entrepreneur who asked me the question was convinced.
- I’ve posted a lot about how to pitch.
I’m generally a skeptic about the value of press releases. However:
- The IT trade press is increasingly understaffed, and hence press releases can in some cases serve as a draft of the article you hope folks will write. (Whether articles of that form have any influence or credibility is a whole other matter.)
- Press releases are collateral support for whatever higher-class outreach you do.
So my current opinion is:
- You should write press releases primarily for a general online audience, but …
- … secondarily for the reporters at whom they are ostensibly aimed.
That fits with my general view that press releases:
- Should tell your story.
- Should read well.
- Shouldn’t do anything to actively embarrass you.
That brings me to the subject of this post: third-party press release quotes. For starters, I think the following are pretty obvious: Read more
The concept of “elevator pitch” is ill-defined. Strictly speaking, it’s supposed to be how you’d describe your company or product in no more time than the length of an elevator ride. But if you ever actually are in such a situation, you will likely tailor your pitch to the specific listener. Ergo, you shouldn’t have one standard elevator pitch. So I’ll talk about “self-introductions” instead. Whatever we call it, the challenge “How do we introduce and summarize our story in the shortest possible time, or in the fewest possible words?” is a Really Big Deal.
Self-introductions occur at several different lengths, including but not limited to:
- Short enough to fit in the first paragraph of a press release without obscuring the main point.
- Short enough to fit into an elevator ride — — or in the boilerplate at the end of a press release.
- The first few paragraphs of the About and/or Product sections of your website.
- The beginning of a typical slide-aided presentation.
Usually, it makes sense to view the shorter ones as being abbreviations of the longer, more complete forms.
Most software technology benefits boil down to either:
- We help people be more effective. (Productivity)
- We help computers run faster. (Performance)
- We help people be more effective at making computers run faster. (Performance via productivity, or vice-versa)
A couple of the raw startups I advise have recently asked me about a hugely important subject — dealing with their very first customers. The big deal here is that initial customers can offer three different kinds of valuable resources:
- Money, in forms such as:
- Ordinary licenses or sales.
- Custom product development.
- Equity investment.
- Credibility,* to audiences including:
- Press and analysts.
- Angel/seed/venture investors.
- Potential customers who are just reading/hearing about you.
- Potential customers who do detailed reference checks.
- Product feedback and advice.*
*Confusingly, both credibility and product feedback are sometimes called “validation”.
Questions of money are of course heavily influenced by how complete your product or service is. In particular:
- It is common not to get paid until your product works and is either in late beta or else early general availability.
- It is common for early customers to want big discounts even when they do pay you.
- Somewhat contradictorily, it is also not uncommon to get a lot of payment from your earliest customer(s). Reasons include:
- They’re getting technology that is, at the moment, unique.
- You’re willing to somewhat tailor the product to their needs, and to provide very high levels of attention and service.
Equity investment by your early customers and partners is problematic. In particular: Read more
I occasionally get very hands-on in accelerating a raw start-up. Typically this is when an engineer comes to me with an unquestionably clever idea and asks me — sometimes in very broken English — whether and how he can get rich from it. So let’s collect some thoughts on the subject.
This post can be construed as fitting into my “not-very-organized series” about the keys to success. In particular, it draws on my July, 2014 post about judging opportunities.
The product plan
A start-up product idea needs to satisfy multiple criteria. Awkwardly, they’re rather contradictory to each other.
- It should be obviously appealing to sufficiently many customers, and be worth sufficiently much money to them.
- It should be something the startup can do with very few resources …
- … but which much larger potential competitors cannot.
That usually means that the idea:
- Should be based on an architecture that is anti-strategic to incumbent players …
- … but which fits customers’ technology strategies just fine.
Criticisms I’ve made repeatedly of specific ideas include: Read more
Much of what I get paid for is advising early-stage companies, especially on messaging and marketing. So let’s try to pull some thoughts together.
For early-stage companies, I’d say:
- Even more than for larger companies, the essence of messaging is to achieve the contradictory goals of excitement and credibility.
- If one of those must be sacrificed, sacrifice excitement. It is by far the easier of the two to regain.
- Note: Both your product and your company need to be credible. When your company is new, both parts of that are formidable challenges.
- Notwithstanding how limited your resources are, don’t rely too much on outside PR. You need to control messaging and key influencer relations yourself.
- Notwithstanding how limited your resources are, you need to address multiple audiences, at least:
- Prospective employees.
- Knowledgeable influencers.
- Not-so-knowledgeable influencers.
- Sales prospects (business folks).
- Sales prospects (technical folks).
Of course, these subjects are much discussed in this blog. The top three overview posts for young companies are probably: Read more
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Much of my consulting revolves around messaging, and in particular the need to have multiple specific messages for multiple audiences. Increasingly often, I find myself discussing that in terms of sales qualification, because there’s a strong duality between message crafting and qualification:
- The goal of message crafting is to find the right message(s) for particular audiences.
- The goal of qualification is to find the right audiences for particular messages.
Recall the layered messaging model, whose wording I’ll update to:
- Differentiated business benefits …
- … which are achieved because of …
- … superior technical features or SLAs,* …
- … the differentiation of which is achieved and sustainable because of …
- … fundamental product design.
A good messaging stack works well on all five of those layers. Read more