September 7, 2017
Ep. #7, Feat. NFX Guild’s Tammy Camp
In the latest episode of Venture Confidential, Peter is joined by Tammy Camp from NFX Guild. Tammy describes her venture career journey from...
Most developer tool startups begin with technical founders setting out to solve a problem that they believe will make the world a better place. But somewhere in the years of working in the trenches building software it’s common to lose sight of the down to earth needs of the end user that you are building for. This comes into sharp focus when a startup decides it is ready to build out a sales team. The fraught decision to invest in a sales team is ultimately a decision to move from being product-centric to being customer-centric, whether it’s a conscious choice or not.
How founders handle this transition and balance the pressures between the creative developer freedom that led to innovation and serving the needs of enterprise end-users, will make all the difference between a successful company and one that is forgotten.
There is a natural tension between developers and sales reps, particularly when you hire your first sales folks. Developers often go by the if-you-build-it-they-will-buy philosophy, because this has happened before, it’s just exceedingly rare. Meanwhile the sales team is getting an earful from customers about missing or deficient features that might have been overlooked because they were considered boring or trivial, but are truly essential to the end-user. When this feedback is delivered by sales to engineers, it’s easy to want to “kill the messenger” and assume user error, technical ignorance, or sales hyperbole, but in reality it should be viewed as gold dust because it is the closest thing you will get to market research and understanding product market fit.
This valuable customer feedback often highlights undiscovered use cases, blind spots on persona needs, and inaccurate assumptions on product navigation. This is not to say that every user demand should be met, but if it becomes clear that valuable customers are asking for the same feature, it is probably best to address it. A situation like this can easily be substantiated by other customer facing teams in the company like Customer Support (tickets) and Professional Service (delivery needs).
What can founders do to make this transition a success? It is critically important for them to realize that for the success of the company the sales team needs a great product and the developers need a great sales team – each needs the other.
So the first step is to have an organization where there are clear lines of communication between the sales team and the developers. This requires a shift in thinking from “these end-user problems are taking me away from what I want to do”, to “these fixes our users are demanding will make our product even better, and easier to sell to new customers.” For example, the product might be really advanced but if it doesn’t have an intuitive user interface it may put off certain very valuable end users. Moreover, as developer startups look to expand up market and serve enterprises, there are multiple stakeholders to get buy-in from for approval and thus require building for those personas.
For example, your product may provide developers with advanced tools for automation, but if you don’t support Two-Factor Authentication, enterprise IT departments won’t approve budget for your product. Check out https://www.enterpriseready.io/ for a deeper dive into the features necessary to sell into the enterprise.
This shift in thinking means that every enhancement to product development needs to be justified to the bottom line. One way to address this is with a product council that evaluates every engineering request based on impact to the customer, revenue, and competitive edge. The shift from designing a product based on intuition, to building a product to address customer challenges can often be seen as restricting and boring work, but as one engineer recently made the astute analogy that it is similar to when his girlfriend suggested he ‘start dressing like a grown-up more often’ – “It’s a change, but I know it’s good for me. “
Software development, especially for big projects, is by nature a collaborative effort. Developers work together writing separate pieces of code that fit together as part of a common product goal. This collaboration necessitates that developers write code in such a way that the rest of the team can understand what they’re doing.
Sales on the other hand is inherently competitive. So initially, the influx of sales reps in the company and the way they are compensated may be jarring to a predominantly engineering focused organization. But when you are under pressure from investors who expect massive growth, it mandates that you have a culture of performance. That necessarily means a collection of goal-oriented and over-achieving sales reps that will move the sun and the moon in order to hit aggressive growth targets.
Because of the way sales reps are incentivized they view anything within the company that isn’t helping in the sales effort as a roadblock to their individual success, and the success of the company overall. These roadblocks can range from unresolved bug fix requests, inconsistencies on your website, to billing discrepancies. The role of a sales rep is to change customer perceptions, present a tailored solution, and build trust with customers. A successful salesperson therefore relies on every function of your company, from product and marketing, to support and customer success. Thus reliable processes, clear communication, and open collaboration across your company are vital for sales success.
It is important for founders to be aware of frustrations within a sales team and to be responsive to them, while also prioritizing resources needed to fix them. In other words there needs to be an organic feedback loop between the customer needs and product enhancements.
The culture of any start-up requires employees to be agile and flexible as each stage of growth introduces new challenges, new opportunities, and new people. The innovative, nothing-to-lose, creative freedom that a technical team has during the earliest days is what enables the company to be disruptive, and as you shift to supporting enterprise customers, the invaluable insight into user experience, security, and interoperability that salespeople provide is equally vital in capturing and retaining customers. As the saying goes “What got you here, doesn’t take you to there.”
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