Enterprise Sales | Startup School

()
Enterprise Sales | Startup School

Intro (00:00:00)

  • 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 (00:03:29)

  • 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 (00:05:15)

  • 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 (00:10:09)

  • 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 (00:15:00)

  • 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 (00:18:13)

  • 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 (00:18:58)

  • 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 (00:20:02)

  • 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 (00:22:01)

  • 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.

Overwhelmed by Endless Content?