4 Critical Sales Mistakes that Technical Founders Must Avoid
Jonathan Grana — Sep 27, 2017
It’s often intimidating for technical founders to begin doing sales. After all, most of us have zero experience in it! What adds to the problem is the fact that sales, in an early stage startup, is very different from the sales function in an established company, or even in a more mature startup. That’s because the objectives of an early stage startup are quite different.
At Interseller, both Steve and I are technical founders and we have no background in sales at all. However, we have been building and growing Interseller for a year now, and we have been learning about sales through practical experience — our wins, our mistakes and feedback from our customers.
We have come to believe that technical founders are perfectly capable of doing a great job at sales at the validation stage. However, there are certain mistakes you must avoid, to ensure that your startup succeeds.
Here are four critical sales mistakes that technical founders must avoid:
Everyone who creates a product, believes that there’s a market for it. Usually that belief is derived from our personal experiences about our own problems, or the problems of a small group of people that we know.
That’s exactly how we built Perf — a lightweight application performance monitoring tool. The idea for Perf was based on a problem that Steve, my Co-Founder, and I were facing. Our personal experiences led us to believe that we had discovered a critical market need.
However, in our excitement, we skipped doing sufficient research to validate whether the problem was large enough to justify building a product. Instead, we invested a lot of time in building the product only to eventually discover that the problem wasn’t affecting as many people in the way it had affected us.
Interestingly, while trying to acquire customers for Perf, we were building an in-house outreach tool because the existing tools in the market were either insufficient for our needs or were overpriced. When people began to show more interest in that outreach tool than in Perf, we realized that we had stumbled onto something that could solve a genuine widespread problem. Not just a problem that Steve and I were facing. And that’s how Interseller was born!
Interseller works, because it is being developed in collaboration with our customers. We had customers before we completely built a ‘sellable’ version of the product.
Lesson 1: Start selling before you develop your product, not after.
Building a successful business is all about growing revenues, right?
For an early stage tech startup, revenue shouldn’t be the main focus. When you have just built your MVP, your first objective should be to gather feedback about your product, not to make revenue. The primary question is, “Does this product provide value to a common problem?”, and the second is “Are people willing to pay for that value?”
At this stage, selling shouldn’t be about making money. Rather, it’s all about convincing people to try out your product, in exchange for feedback.
Many people will be happy to do so, but if you begin by asking them to pay, far fewer people will sign up for a trial. Those who do, will evaluate your product with the same criteria as an established product, and will be critical of every bug or support hiccup.
However, this doesn’t mean that you won’t generate revenue at all. After the trial, a sizable percentage will also agree to pay to continue using the product. Those who don’t wish to pay will tell you what’s holding them back — which is exactly the feedback you need to work on your product-market fit.
Lesson 2: Always ask for feedback, not money.
We all want to make the most of technology to be more productive at sales. So, we would try to have as many sales discussions as possible over the phone or a video call. After all, we have ambitious targets to meet.
This might make perfect sense if your company has grown enough to hire a sales team, but in the early stages this puts you at a serious disadvantage.
When you sign up a user who is willing to test your product in exchange for feedback, don’t limit your research to only what they tell you. You could also use recordings and analytics to track user journeys and exactly how they are using the product, but even that isn’t enough.
If you want real hard hitting feedback, you want to sit next to the person while they use your tool. You need to observe their reactions and emotions as they try out the minute aspects of each feature. Often, those non-verbal expressions will give you the most valuable insights.
Moreover, when you are right next to an user, he or she will be able to tell you what they like and what they don’t on the spot. People would forget most of those details just within a few hours and so it’s best to get their feedback live. You can also ask each other questions, which reveal even more information.
For all these reasons, there really is no substitute for an in-person meeting.
Furthermore, a face-to-face meeting also helps you develop a far better relationship. When you do pitch to their company, they will act as your champion in the organizational decision making process. Having a champion in your corner will drastically improve your conversion rate.
Lesson 3: In-person meetings are best for gathering quality feedback.
As a technical founder, if you have zero experience in sales, and if you don’t have a business founder, you might feel that hiring a salesperson is the smart thing to do. However, in the early validation stage, there are several reasons why this would be a critical mistake.
First, at this stage, ‘sales’ is more about convincing people to try your product in exchange for feedback. In contrast, a salesperson is used to acquiring customers for money, and will not be able to operate too efficiently in this role. Often, they won’t be able to stop themselves from asking for a sale prematurely.
Second, the process of gathering and interpreting feedback from an user requires a highly sophisticated understanding of the minute details of your product, its roadmap and your company’s vision. It will take months until a new salesperson is able to do that even as half as well as you.
Next, as you keep gathering feedback, your product’s positioning and even your vision would keep evolving at a very rapid pace. That change is something that a salesperson might find very confusing and difficult to adapt to.
Finally, it’s wise to avoid an expensive hire, until you have acquired a few customers and sufficiently validated that the product has good potential!
Lesson 4: Don’t hire a salesperson at the early validation stage.
For an early stage startup, sales is highly strategic and not tactical. It’s more about getting feedback and validation than about generating revenue. At this stage, the sales function is actually closely interlinked with product development.
As long as technical founders avoid the above mistakes, they have a far bigger chance of building a successful startup.