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3 Startup Sales Mistakes I'll Never Repeat

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Moving from a successful corporate sales career to being the co-founder of a tech startup was a steep learning curve. I passionately believed that great success lay in repeating what I had done previously and, although the majority of my efforts were as effective as before, I found myself relaxing some principles integral to my previous success.

However, the following mistakes in the early stages of selling the product allowed me to revalidate the importance of all I had learnt.

1) Making Assumptions About the Potential Customer

The product I was selling had a complexity I had never seen in the corporate environment and, upon first inspection, was an easy sell that solved a clear need. However, it quickly became apparent that it didn't solve my customers’ needs, but my customers' customers' needs, and I made the error of assuming they were the same thing.

The product was a smartphone app that removed the need to queue within any venue. For example, rather than waiting to order in a busy bar, the user would both order and pay on their phone. The bar staff would receive this directly, and the customer would be alerted when drinks were ready to collect. Being someone who passionately loathed queuing, this app seemed to be the easiest sell I could imagine. Every venue would want happier customers and more revenue, especially when trial studies had shown an increase in orders when using this technology, right?

What the founders believed and focused on:

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However, the venues saw something different. In their minds, operational obstacles outweighed any benefit, despite the potential increase in revenue and superior experience for their customers.

What the venues hosting our technology believed, i.e. our actual customers:

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What we should have done differently:

We should not have confused our "vision" with solving the current needs of our "real" customer, i.e. the venues hosting our technology. We figured it out eventually, but it would have saved time to formulate a tighter sales strategy and process from the outset.

2) Approaching the Wrong Type of Customer

New products are best built in collaboration with customers who share your vision. This way, the business has orders, sponsors, and revenue when launched. However, sometimes, this doesn't happen. The core difference between this happening in a startup or corporate business is the amplification of consequence. Startup resources are typically scarce, and a change of direction or lack of insight saps budget, wastes precious time, and stalls revenues.

In our case, the first test cases were not the ideal customer profile. We then made the mistake of chasing anyone who would buy, regardless of whether they were good for the business. The theory was to collect as much “low-hanging fruit” as possible but, couple this scatter-bomb strategy with potential customers promising to buy if we added extra functionality, and you quickly descend to chasing your tail with no revenue.

Your first customers are critical to the success of the business. The most important attribute is not that they "quite like the idea", but that they are "committed" to the same vision and goals. Startups must find the rare breed of early adopters or visionaries who wholeheartedly support your efforts and, ideally, pay for them. Cash is king. The faster customers pay, the sooner the business is stabilized and out of the danger zone.

What we should have done differently:

We should have been far more stringent about whom we targeted and worked with. We launched with very supportive customers who were ideal in the beginning, but it soon became apparent they weren't influential enough to appease naysayers. In this regard, we didn't adapt quickly enough to the changing requirements of the business and wasted too much time having faith in the original business model.

3) Allowing Passion to Interfere With the Sales Process

These are bad practices to avoid:

Believing your time has no value.

Passionately believing in your startup can lead the founding group to devalue their time, because an immense commitment to success drives a willingness to work all waking hours. However, time is as precious as your budget, and there must be a rigorous failsafe on time, energy, and resources, as not monitoring the ROI of your actions can lead to a downward spiral of productivity.

Believing that "founder" status makes you a better salesperson.

Sales is sales, right? It should be, as long as you are adhering to a defined sales strategy and process.

If you ever get the chance, ask a first-time founder to pitch their product, and then ask one of their salespeople to do the same. The chances are that the former will deliver an impassioned vision that tries to convince you of the bigger picture, but the salesperson will be more methodical and ask more questions to first establish the need. The former assumes and convinces, while the latter looks for the actual opportunity.

Despite 15 years of sales experience, I did things I never would have done previously. The emotional connection to my product clouded my judgement, distracted me from my defined sales processes and, if I am brutally honest, lowered my standards of professionalism. I disconnected with customers in a way previously unheard of. It was part ego, part inexperience, and part over-determination to succeed.

A defined sales strategy and process is never more important than in a startup environment. 

Believing you can compensate for lack of commitment with effort.

In a startup, there is a heightened drive to create an amazing customer experience. This is to reward their belief in you and your vision. The tendency is to do anything for them, from developing new features to forgiving behaviors that never would have been acceptable previously. This is wrong. Just as investment rounds are based on results and paid in installments, the sales process must have micro-stages of commitment. Sounds obvious, but when everyone is keen to please, these standards and procedures are easily swept under the carpet.

I am never proud of getting it wrong, and the most frustrating part is these behaviors would never have entered my head in the corporate environment. The good news is that knowledge, and experience, make you better.

If you value this article, please share it, connect with me, and comment below. If you haven't yet received my 2017 research paper, it discusses the differences between selling in the UK vs. the USA, as well as how digital networks are impacting multinational businesses differently on each side of the pond. Download from my homepage here.

Editor's note: This post originally appeared on LinkedIn and has been republished here with permission.

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