5 Ways Hot Startups Will Sell in 2015

Mohit Garg
Mohit Garg




The startup scene is red hot again, with nearly $50 billion flowing into high-growth companies worldwide last year alone. However, unlike the first boom of the dotcom era, today’s startups are very different animals. They span a variety of industries from clean energy to healthcare to retail. And while Silicon Valley is still the number one location for headquarters, today’s startups are far more decentralized, with hubs from Boston to Bangalore to Berlin.

But despite these diverse markets and geographies, there is one unifying trait -- the way startup sales teams sell is undergoing a radical transformation. At high-growth companies the rapid pace of innovation, shortened product cycles, and other trends are driving a shift within the sales department. Here are five of the most significant changes.

1) Shorter Business Cycles

The cloud-based SaaS technology model has shrunk the product lifecycle. New features and updates are now coming every few weeks instead of every few months.

What does that mean for the sales teams that sell these products? They need a way to stay informed on product capabilities and features as they evolve. Too often sales teams continue selling an old value proposition of their product for weeks or months after its new iteration has been released.

Whether teams use cloud-based training systems or less formal communication funnels like email and wikis, they should adopt a way to keep pace with fast-evolving product roadmaps. That means keeping both new hires and more seasoned team members in the loop 24/7. Ideally, all essential tools like case studies, video tutorials, product collateral, and so on should be pushed to sales in real time. And teams with the ability to socialize the materials internally often see a dramatically improved attention (and retention) rate to this critical information.

2) Transformed Buying Process

Technology purchasing decisions are shifting from the CIO towards individual lines of business and department owners. Especially with trial-and-buy options, the business unit managers are inherently best positioned to evaluate new systems.

In fact, a recent Bain & Company survey of marketing, customer service, and supply chain functions found that nearly one-third of technology purchasing power has moved to executives outside of IT. And in some situations, business line managers now control the decision-making process from beginning to end, with little to no involvement from the CIO and/or IT.

It is not enough to fit the IT blueprint. Startup sales teams need to create new entry points and open doors into the business functions likely to be the biggest beneficiaries or most active users of their offering. This means revising messaging, value propositions, and marketing channels for those users and influencers. The sales organizations that have not only recognized but also addressed this change are light years ahead of the competition. 

3) Inside Sales Is In

Because more and more product companies are serving a global market, they’re increasingly deploying an inside sales model versus the feet on street approach of direct sales. Where once we relied on relationship-building golf outings and fine dining to close (and keep) deals, sales reps must increasingly understand buyers’ needs, educate them on the value proposition, and provide consultative experiences.

Part of the reason is cost. Road warriors can be expensive and when deals don’t close, their ROI becomes harder to justify. Geography is a key consideration as well, as more and more companies sell to a flattened marketplace. You can’t have a field rep everywhere, whereas you can easily have online reps who sell to anywhere. 

But perhaps more importantly, sales is shifting in response to new marketing models. Digital marketing puts the purchasing power in the consumer’s hand. They can navigate the early stages of the sales cycle without a sales rep's assistance. In addition, social networks, online forums, and search allow potential customers to evaluate options before engaging with a salesperson. 

And when they finally do, they’re much further ahead in the consultation phase and might already be ready to buy. No one needs to schmooze you to sign on the dotted line. In an increasingly inbound sales model, inside sales is naturally a better fit.

4) Transparent Pricing

So what does the above trend mean for pricing? Not surprisingly, the RFP is less common these days, especially in the mid-market. With purchasers evaluating features and pricing trade-offs online, prospects' selection processes are well underway before they pick up the phone or submit an inquiry. 

So to be a contender in the consideration set, technology startups have no choice but to provide transparent pricing on their website or early on in the evaluation process.

Successful sales teams are able to distance the dialogue away from pricing to a broader value equation. It is not enough to have ROI calculators. Listening carefully is key. Identify which benefits and capabilities are most important to the prospect. Proactively educate your buyer on which factors they should consider when evaluating their options.

And every salesperson should be able to quickly identify the “trump card” -- the one thing the buyer values above all else. Perhaps it’s a feature or add-on that differentiates your offering from the competition. For example, in certain product categories, after-sales service and reliability may trump most other buying criteria. Whatever it is, a trump card effectively makes the pricing consideration secondary -- if not irrelevant entirely.

5) Competitive Pressure

Industries are moving at warp speed and competition is no longer deterministic. Think of WhatsApp disrupting text messaging revenues for telco, Airbnb shaking up the hospitality industry and Uber changing the car rental and taxi sectors -- all in the past three years alone. It’s critical for sales teams to aggressively keep abreast of the competitive landscape.

10 years ago, it would have been adequate for a sales rep to be equipped with the battle cards for the top three competitors. These days, new competitor names pop up in customer conversations daily and can blindside you if you’re not vigilant. While the sales professional is inherently a rugged, adaptable species, those that will not just survive but thrive will look at competition as categories versus individual brands.

There are a few different types of competitors to keep in mind. First, you've got the large incumbents -- wooly mammoths that can be outdone with product superiority and responsiveness to customer needs. Your direct, apple-to-apple competitors can be bested with the right targeting. Most markets have space for more than one niche leader, so winning is usually about identifying the segment of the market where your solution has superiority. For the new entrants that are the most unpredictable, the trick is to showcase your credibility and stability. Leverage the sales discipline via collateral, case studies and success stories. 

Ultimately, you don't have to outdo your competition on everything. Buyers will complete their evaluations within a finite window of time, so get strategic on only the dimensions that matter to them. This approach is not just relevant for 2015 -- it's timeless.

What trends do you see affecting startup sales? Please share your thoughts in the comments. 

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Topics: Sales Trends

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