October 31, 2018
Ep. #22, Feat. Dan Scholnick of Trinity Ventures
In episode 22 of Venture Confidential, Dan Scholnick, General Partner at Trinity Ventures, discusses how his past experience as a two time e...
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 part two of our series on Early Stages Sales Processes, we’ll look at the buyer’s journey, and what you’ll need to ensure that prospects have a smooth experience.
The most common founder challenges I’ve seen with early-stage sales are 1) no prioritizing what to work on first; and 2) not allocating the time to follow up with customers. Both of these challenges are closely tied to the development of a strong buyer’s journey. Now that we’ve examined how marketing and sales can work together to bring in leads, let’s look at how to develop your buyer’s journey.
Once a lead comes in the door, there’s a few things you’ll need to help you help them get comfortable with purchasing your solution. First, let’s remember our goals:
Working with a developer audience can present some unique requirements during the buyer’s journey. For example, developers often want to get deep on the technical specs of the product as they evaluate it. They might be comparing your solution against building a homegrown solution, rather than comparing it to other SaaS solutions. However, the core of these goals remains the same, no matter what your audience looks like.
To effectively usher leads through the buying process, you need to stay a step ahead of where they are in their journey. To begin with, you need a way to capture who to talk to next and how close they are to buying your solution. A helpful tool is a Customer Relationship Management (CRM).
If you’re very early stage, simplicity is key. You want a CRM to do 4 main things:
Don’t overdo it: Keep costs down. You only need the basics mentioned above at this stage. You can keep costs low until you outgrow your tooling.There’s no need to spend $5k / month on a market leader that’s overkill for your needs. In my early stage orgs, I’ve used Close.com with great success, but a simple spreadsheet works well also.
Good enough is good enough. Don’t get distracted by overly complex tooling. Focus on the basic things that you need to do now and then add the right tools to your toolbelt as you grow.
In the developer tools business, it is common to implement a self-service model. Meaning, a prospect can come to your website, educate themselves about your product, and become a paying customer without any human interaction. This is called self-service conversion. Depending on the nature of your product and business, the buyer’s journey can include trying out your product free of charge (free trial). While there are many variables to consider (e.g. hosting costs, opportunity costs, user-base growth, etc), the question you have to ask yourself is: “When is it appropriate to let a customer self-service and when is it time for us, the company, to intervene?”
If that customer has the potential to grow into a large revenue stream for you, it would be wise to offer your time to help them fully understand your product’s capabilities and ensure they are using it to its fullest potential. You wouldn’t want to let a company the size of Nike only spend $5,000 on your solution when they have a dev team of more than 500 people. If it’s Swan’s Oyster Depot, however, they will be just fine on your free trial.
First, you should identify your optimal target market. Think about the potential revenue you could obtain from the prospect. Company size and revenue are a few key metrics to guide you. Small to Medium Business (SMB) size companies (loosely defined as less than 100 employees with under $10mm in revenue) may or may not be your target audience, but they certainly won’t be ponying up $100,000 for your solution unless is critical to their business. That wouldn’t make good business-sense. Mid-market (100 to 1000 employees and $10mm to $900mm in revenue) and Enterprise level companies (> 1000 employees and > $1B in revenue) can and should produce more revenue relative to the amount of time invested.
Disclaimer: I’m not suggesting that you spend all of your time focused on one demographic (e.g. whale hunting). You have to decide which is right for you at which stage in your company’s lifecycle and given the amount of time you can spend on a client. At the end of the day, everything should be a calculated risk.
Once you have identified your target market, you will be in a better position to determine if you should interact with the prospect, or if your valuable time is better spent elsewhere. Make this decision early, and most importantly, always ask yourself if there is more that your product could be doing for the right customers (i.e. investing time vs receiving money). If you think you’re leaving money on the table by letting the customer self-serve, it’s time to interact with them.
So you’ve decided that you need to make contact with the prospect. It’s your choice of how, but in my 10 years of sales experience, speaking in person or over the phone is far more effective than email alone.
There is a belief that technical buyers (including developers) are only comfortable using email over live forms of communication. Your mileage may vary, but I strongly disagree. If you’re a developer-tools founder, a technical buyer or developer is going to be excited that they’re giving feedback directly to the maker themselves! How often do developers get to directly hear what someone else thinks about what they built? If you’re genuine in your approach in seeking to understand the truth about how they view your product, the person providing feedback will be more than happy to give you their honest opinion. Plus you get the benefit of understanding their general temperament towards your solution, rather than trying to decipher their tone over an email. You will also be able to cover far more topics and pivot the conversation on the fly, saving valuable time by advancing your sales cycle faster than emails alone. That being said, if you try this approach and it doesn’t yield the results you want, figure out what is most comfortable for your client, not you.
It may take a few tries! The goal here is just to get a meeting. From there, you can learn more about your clients, share your solution with them, and determine appropriate next steps. There are many articles on what a good cadence is for outreach.
My personal favorite is a touch cycle of email then call, repeated every 2 days for 4 cycles. By then, you will either have a meeting scheduled, or a “no thank you / not now” from the prospect. Remember, your goal is only to get a meeting with them so you can speak live.
It’s a numbers game, and you’re only ever trying to get to the next step. By always thinking of just getting to the next stage in the sales cycle, you won’t become overburdened with your desired outcome. That desired outcome will happen naturally.
By thinking intentionally about the buyer’s journey that you’re delivering to leads, you’ll be able to refine the experience over time and (hopefully) and see patterns in what works for your buyers. From there, you can create a repeatable process that, as you grow, your sales team can use to close deals more efficiently. Join us next week for the final installment of our 3-part series on Early-Stage Sales Process, we’ll examine how rethinking how you approach your prospects can help unlock a stalled sales cycle.
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.