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Early-Stage Sales Process: Balancing Sales and Marketing Initiatives

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Marketing and Sales Functions, and How They Mesh at Startups
When to Focus on Marketing and When to Focus on Sales
When to Hire a Salesperson
Transactional Sales
Complex Sales
Key Takeaway: Do What Needs to Be Done Now
  • Nick Beecroft Photo
    Nick Beecroft
10 min

All early-stage founders experience a similar early stage challenge: they’ve worked their tails off to create a product that is ready for market, but it’s tough to know how to start selling it, especially when you’re selling to developers. Depending on personal prior experiences, sales as a function can feel uncomfortable, but if you ultimately want to increase your company’s value, you need revenue. In this series, 10-year, early-stage sales veteran Nick Beecroft arms founders with an understanding of which processes and tools to focus on first to make early revenue acquisition easier and scalable.

In the early days of any organization, establishing the processes to find and sell to customers is key. It’s no surprise that the two sides of your business development activities, sales and marketing, work best when they work together. But knowing where to focus your energy can be surprisingly difficult. In this article, let’s look at how to think about your sales and marketing motions when you’re first getting started, so you can lay the groundwork for growth

Marketing and Sales Functions, and How They Mesh at Startups

First, let’s set a baseline for what marketing and sales do for early-stage startups. Marketing’s primary function is to explain the founder’s product vision to the proper total addressable market. It exists to help a buyer (prospect) understand how the product’s capability provides business value by solving a challenge. Its second function is to feed sales by using the above to partially educate the market on your solution and connect prospects to your business. Think about any major purchase you’ve gone through in your personal life. You had to know the solution existed, understand how the solution met your needs or solved your challenge, and you have to know where to go and who to speak to in order to purchase it.

In its simplest form, Sales’ primary function is to turn those partially educated prospects into your customers by:

  1. Understanding their specific needs;
  2. Continuing to educate them on your solution;
  3. Coaching them to make a go/no-go decision;
  4. Helping them understand how to buy your product or service.

Putting these two sides together: marketing starts the education process and once a prospect has enough information to start engaging with your company, a prospect turns into a lead. While there are many ways to drive top-funnel inbound leads, Brian Halligan and Dharmesh Shah’s book Inbound Marketing is my personal favorite to help companies stake their place in the market as a thought leader, educate their prospective clients, and drive leads back in the door.

Regardless of which hat you’re wearing, you should always be trying to learn more about the prospect’s situation and educating them in what you do. Think about why you started your company and tell that story. Every time.

When to Focus on Marketing and When to Focus on Sales

Startup teams where everyone wears a lot of hats often struggle to know when they should focus on marketing and when they should focus on sales. It can be incredibly frustrating to not know where to spend your precious time next.

If you’re trying to figure out what you should focus on next (in the context of marketing or sales), the answer is fairly simple: You should be overwhelmed with interest in your product. So much so that you can’t keep up with the sales function.

  1. If you are not inundated with requests just yet, focus on getting your message to the right folks.
  • If you’ve tried that already and it’s not firing on all cylinders, ask yourself:
    • “Am I targeting the right people in the places that they hang out?”. For developer tools marketplace, something like ProductHunt or Hacker News is a good place to start. If that’s not working, tweak the message.
    • “What would make me want to buy this?” Understanding the tangible value that will be enough for your prospects to take action is a baseline that you can’t get by without.

Here is something that, as a salesperson, gives me high levels of anxiety (but is good for the right reasons): In early stage, having massive amounts of interest in your product and being unable to keep up with turning it into money is the exact problem you want to have. Assuming that you don’t have salespeople yet, if someone wants to pay you for your product or service, you have the beginnings of market validation. It’s time to focus on closing those leads and shift your mindset to “How much money are we leaving on the table?”

When to Hire a Salesperson

A good (perhaps obvious) measure is after you have your first large chunk of revenue (market validation) and too much inbound interest to keep up with single-handedly. For some, validation is your first $100,000 in revenue, for others, $1,000,000. If you have what you consider to be market validation and little-to-no time to chase money yourself, then it’s time to hire a salesperson.

Alternatively, if you’re struggling with market validation (or aren’t sure what yours should be), reach out and ask for help from your network. Ask your investors for their mentorship and/or to put you in touch with someone who can advise you on sales or has been in a similar situation. Don’t have those types of connections in your network yet? Search for startup groups in your area and attend the meetings. Ask questions, get to know people. Another idea is to connect with a few salespeople and bounce ideas off of them. They love to chat, connect people within their network (which is typically huge), and have a keen sense of smell for all things customer facing. Meaning, they can help you validate your messaging, target market, sales cycle, and more.

Salespeople generally fall into two different buckets, depending on the type of sale they prefer and where they excel: transactional and complex.

Transactional Sales

Transactional sales are typically easier, high-volume, shorter in length (< 3 months), and lower revenue. A good transactional salesperson should be closing multiple deals a week, sometimes even ‘one-call-closing’ (only takes a single meeting to close the deal). This sale type is about breadth, not depth. On average, they’ll be working 30-50 deals in a given month.

Complex Sales

Complex sales (often called enterprise sales) are the opposite of a transactional sale. They are defined as requiring more than one individual’s approval to complete. Meaning, you will have to get multiple people / teams on the customer side to agree to bring your product into their organization. You might have to get approval from multiple layers of management. The sales cycle might take anywhere from 3 to 18 months. However, you’re typically going to get a lot more revenue from this type of sale. This sale type is about depth, on a much more focused set of accounts. On average, a complex or enterprise sales rep will be working on 20-30 deals per year.

When searching for a new sales hire, make sure you find out what type of sale they have proven experience closing and match that to your product or market type. You wouldn’t want a complex sales rep selling a transactional product, as they’ll get frustrated or bored with the lack of complexity. Likewise, a transactional rep selling a complex product may not be motivated due to the long sales cycle (vs having the satisfaction of a ‘quick win’).

Key Takeaway: Do What Needs to Be Done Now

Many may find this an obvious statement, but in early stage companies it is an unspoken credo: do the job that you (and your investors) feel needs to be done now. That might mean prioritizing product, it might mean prioritizing strategic product-market-fit,…..but most likely, if you’re reading this post, it means you need to exchange the use of your product for money I can’t say it enough, so I’ll say it again, get money for the thing you built as soon as possible. Read: immediately, can be done before v1.0.

By paying attention to what your business needs most and building your team in response to the pain points that are blocking you, you’ll be able to find the right balance between building demand and converting prospects.

Join us next week for the second installment of our 3-part series on Early-Stage Sales Process, where we’ll look at the buyer’s journey, and what you’ll need to ensure that prospects have a smooth experience.

Nick Beecroft is a seasoned sales professional with 10 years of experience selling SaaS for early-stage-companies. Disruptive technologies and consultative field sales to enterprise-level companies are his specialty. Through proactive problem solving, he helps his clients implement revenue-impacting technology, people, and processes. Outside of the office, he loves scuba-diving and pairing wines to braised meats.