All Things Sales: Mini-lessons for startup founders(a16z.com)
a16z.com
All Things Sales: Mini-lessons for startup founders
https://a16z.com/2018/09/02/sales-startups-technical-founders/
61 comments
Awesome work. I'll always take print over video.
No work on my part at all. TBH, I actually prefer video when I first consume the content (or audio, I am listening to a bunch of podcasts; or video, working just as well as audio), but I want to have something I can comeback to and quickly check when I try to remember specifics from the videos, without the need to go through the entire youtube playlist to find it. Recently, I started keeping notes on podcasts, but I haven't published any of those. Maybe I should.
<shameless-plug> In fact, I just recorded the 82nd episode of a daily vlog I've been keeping, while developing a new product (haven't published a single episode, yet). Closed beta starts in a few days. I think it's pretty interesting stuff (I meant to do this, ever since I discovered Alex Bloomberg's Startup podcast) and I honestly hope to win-over even folks who prefer print, like yourself. Of course, my main focus is on the product, but it will be absolutely amazing, if even a few people get inspired from the story surrounding its creation. </shameless-plug>
Cheers!
<shameless-plug> In fact, I just recorded the 82nd episode of a daily vlog I've been keeping, while developing a new product (haven't published a single episode, yet). Closed beta starts in a few days. I think it's pretty interesting stuff (I meant to do this, ever since I discovered Alex Bloomberg's Startup podcast) and I honestly hope to win-over even folks who prefer print, like yourself. Of course, my main focus is on the product, but it will be absolutely amazing, if even a few people get inspired from the story surrounding its creation. </shameless-plug>
Cheers!
Usually I do to, but these videos are like 1-3 minutes, and there is vital information and explanations of what the graphics mean that would literally take as long to read yourself. :P
I agree, but I make notes not to speed up consumption of content - just search gets faster this way. Text search or even scrolling a few pages, is definitely faster than FF through 40-50m of content split into 16 episodes.
Oh sure, I agree it's useful for review, but not for initial learning. I read through your notes before I watched the videos because I thought I could really glean something from it, but it didn't help me at all (it was actually confusing) until I watched the videos...
Thanks for the feedback. Useful stuff.
Is there any chance I can get a contact of yours? (I am always in the middle of a project that can benefit from the constructive criticism of smart people, so I will be happy to stay in touch)
You can use the contacts in my profile if you don't want to post yours' here.
Cheers!
Is there any chance I can get a contact of yours? (I am always in the middle of a project that can benefit from the constructive criticism of smart people, so I will be happy to stay in touch)
You can use the contacts in my profile if you don't want to post yours' here.
Cheers!
It's awesome to a series on Sales from another top venture firm.
For anyone that's looking for similar resources. Here's another awesome series I came across (while searching for YC resources on this topic): https://www.youtube.com/playlist?list=PLb1c0oEEXWIZiWzdtUOUh...
It was apparently a 'Sales School' for one of the YC batches in 2014. Hadn't heard of Steli before, his videos really give me a lot of energy. He also reinforced my belief that founders have to be great at selling their creation and gave me insights on what it takes to be great at sales.
For anyone that's looking for similar resources. Here's another awesome series I came across (while searching for YC resources on this topic): https://www.youtube.com/playlist?list=PLb1c0oEEXWIZiWzdtUOUh...
It was apparently a 'Sales School' for one of the YC batches in 2014. Hadn't heard of Steli before, his videos really give me a lot of energy. He also reinforced my belief that founders have to be great at selling their creation and gave me insights on what it takes to be great at sales.
Watching these videos made me realize how much I hate sales people. Every time I sign up for a trial or act remotely interested in something, I get inundated by assholes like the lecturer in these videos. Loud, aggressive and as he said "Hustlers". I immediately don't want to use that product or service and I look for alternatives if there are.
I feel like there is no better way to penetrate through the noise of the internet and products/services out there that Sales has to become aggressive. I don't think there is a solution to this? Is there?
I feel like there is no better way to penetrate through the noise of the internet and products/services out there that Sales has to become aggressive. I don't think there is a solution to this? Is there?
It's easy to get annoyed by the aggression and the overall tone of the speaker, this happened to me as well.
However, when I look at what he is saying objectively, he is suggesting quite the opposite from what the tone implies. A good sales person is a great listener, one that doesn't make you feel like the way you described. Overall, I love the series because of what I learnt from it, on viewing it objectively.
However, when I look at what he is saying objectively, he is suggesting quite the opposite from what the tone implies. A good sales person is a great listener, one that doesn't make you feel like the way you described. Overall, I love the series because of what I learnt from it, on viewing it objectively.
I'm a big fan of Fog Creek's "The Most Basic Things Your Company Needs to Know About Sales" (https://www.fogcreek.com/guide/The-most-basic-things-your-co...) It's roughly 25 pages about high level sales strategies. The PDF mentions the book "How You Make the Sale" by Frank McNair (https://www.amazon.com/How-Make-Sale-Frank-McNair/dp/1402204... was a great 101 level book on sales. It's high level so it could be applied to everything from selling cars and real estate to software.
I found these helpful because it was less "here's 10 closing tips and tricks!" and more about the sales process.
I found these helpful because it was less "here's 10 closing tips and tricks!" and more about the sales process.
Great stuff, there's always more than meet the eyes and that's true even for sales ;)
This being said, slight nitpick on #11 and #12. Include clawbacks, especially if you're fairly dependent on sales / more geared towards high touch deals.
This obviously goes on hand in hand with reasonable targets.
Otherwise you create an incentive for sales people to make their number in any way they can to meet their ridiculous target / driven by the usual greed.
The hidden cost of that can potentially be huge, especially if your pool of potential customers is -relatively- small.
This being said, slight nitpick on #11 and #12. Include clawbacks, especially if you're fairly dependent on sales / more geared towards high touch deals.
This obviously goes on hand in hand with reasonable targets.
Otherwise you create an incentive for sales people to make their number in any way they can to meet their ridiculous target / driven by the usual greed.
The hidden cost of that can potentially be huge, especially if your pool of potential customers is -relatively- small.
I think its worth mentioning that this is for mostly B2B type startups / enterprise applications / companys that rely on VC funding, not necessarily B2C, where sales is not technically necessary.
A good readup on B2C from a mostly 1 man successful startup is from peter levels here. https://makebook.io/.
A good readup on B2C from a mostly 1 man successful startup is from peter levels here. https://makebook.io/.
Does anyone have the syllabus for the Stanford MBA course that these videos are based on http://explorecourses.stanford.edu/search?q=STRAMGT%2B351&ac...?
That was handy - if you are a Startup "Renaissance" sales rep interested in turbo boosting initiation sales currently happening in the enterprise + academic education space, please get in touch, I'd love to learn more about you and see if I can learn from you or we can work together. :)
These are fantastic. Anyone know of similar resources for marketing or customer acquisition?
I haven't had the chance to watch the videos yet (though I will) but I'm curious about the compensation aspect.
Why is it that sales teams are often paid via some sort of commission structure?
Why is it that sales teams are often paid via some sort of commission structure?
There's many reasons for this, one that's simpler to explain is relative performance.
If sales person A is working a lot harder/smarter/adaptive to get more clients that sales person B. It may lower his morale to see B get the same compensation as him. This affects sales people more than other functions because the output of a sales person is more or less quantified by the revenue they are responsible for generating (exact metric would be different of course).
If sales person A is working a lot harder/smarter/adaptive to get more clients that sales person B. It may lower his morale to see B get the same compensation as him. This affects sales people more than other functions because the output of a sales person is more or less quantified by the revenue they are responsible for generating (exact metric would be different of course).
As always, you get exactly what you are measuring.
I've experienced sales people who oversold more or less everything. They weren't measured on whether or not what they sold could be delivered.
Instead, product teams had to run around as if they were on fire, because suddenly the CEO got involved and made it a "company wide priority".
I hate KPI's / commission structures, and I have never seen it working. Not where the work required more than half a brain cell.
I guess my great hatred for KPI's is that they are often vanity metrics. What you want to measure is net contribution to the bottom line, and that is near well impossible. So we end up measuring what we can, and Goodheart's law [0] being what it is, get absolutely no value out of it
[0] - https://en.wikipedia.org/wiki/Goodhart%27s_law
Bonus info: I've had work, where I did not have KPI's, but where I could destroy the KPI's for other teams, and sometimes involuntarily did.
I've experienced sales people who oversold more or less everything. They weren't measured on whether or not what they sold could be delivered.
Instead, product teams had to run around as if they were on fire, because suddenly the CEO got involved and made it a "company wide priority".
I hate KPI's / commission structures, and I have never seen it working. Not where the work required more than half a brain cell.
I guess my great hatred for KPI's is that they are often vanity metrics. What you want to measure is net contribution to the bottom line, and that is near well impossible. So we end up measuring what we can, and Goodheart's law [0] being what it is, get absolutely no value out of it
[0] - https://en.wikipedia.org/wiki/Goodhart%27s_law
Bonus info: I've had work, where I did not have KPI's, but where I could destroy the KPI's for other teams, and sometimes involuntarily did.
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To motivate them to sell more.
why not use the same tactics for developers and others ?
is it because it easy to measure it for sales but not for developers ?
Easy to measure and easy to budget for as directly linked to company income. And since a low basic & high OTE is also the market expectation, paying a flat rate either means shelling out a lot more money (because you're paying salespeople their expected earnings regardless of performance) or attracting/retaining weaker salespeople (because it represents less income for high performing salespeople and more income for low-performing sales people)
Certain types of high intensity sales roles lend themselves towards people who are highly motivated by opportunities for incremental commission increases too.
Certain types of high intensity sales roles lend themselves towards people who are highly motivated by opportunities for incremental commission increases too.
A) First and foremost, yes, that's why.
B) I think the assumption is that 100% of salespeople are motivated almost entirely by greed, whereas it's less clear that this is as simple with people in general.
B) I think the assumption is that 100% of salespeople are motivated almost entirely by greed, whereas it's less clear that this is as simple with people in general.
Are all these things applicable before finding the product market fit ?
Haven't gone through the series yet so I can't confirm whether the things discussed are applicable or not.
However, I can confidently say that founder driven sales efforts are important even before 'finding' the product market fit and will most likely even help a startup reach product market fit.
However, I can confidently say that founder driven sales efforts are important even before 'finding' the product market fit and will most likely even help a startup reach product market fit.
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Wow this looks great, time to dig in!
Command to download all 16 videos for offline viewing into a separate directory indexed by video order:
youtube-dl -o '%(playlist)s/%(playlist_index)s - %(title)s.%(ext)s' https://www.youtube.com/playlist?list=PLM4u6XbiXf5rtyzi7g-5O...
On Windows, the single quotes might need to be double quotes. The above uses youtube-dl (YouTube downloader) which is a multi-platform public-domain Python program available here: https://rg3.github.io/youtube-dl/.
youtube-dl -o '%(playlist)s/%(playlist_index)s - %(title)s.%(ext)s' https://www.youtube.com/playlist?list=PLM4u6XbiXf5rtyzi7g-5O...
On Windows, the single quotes might need to be double quotes. The above uses youtube-dl (YouTube downloader) which is a multi-platform public-domain Python program available here: https://rg3.github.io/youtube-dl/.
This is neat!
You know we've reached Peak Valley when VCs are advising to spend more time selling than iterating.
Outbound sales is short-term begging for money, period.
Outbound sales is short-term begging for money, period.
I watched a few of these videos and I didn't hear outbound mentioned once. Did he cover this in a video? I may have missed it since I skipped around.
I was watching/listening to it from the perspective that the company is generating inbound leads from a marketing team/channel.
I was watching/listening to it from the perspective that the company is generating inbound leads from a marketing team/channel.
I read a similar post from Peter Levine earlie this week too. And in this of videos, I think it is a bit more inbound focused.
However, I will say. The moment you start hiring sales reps and marketing reps, here is what starts to happen:
1) Any leads generated from Youtube or inbound email inquiries or etc are treated as "golden leads" and are typically given to the most politically connected reps
2) These inbound leads happen so infrequently that reps often just sit around waiting with "nothing to do"
3) So then marketing starts thinking about outbound massive email blasts to send out
4) and sales reps start thinking about outbound cold calling campaigns to "follow up on the email we sent you"
5) anddd now you've got 500k of payroll per year engaged in the least productive, most intrustive form of prospecting in the world
6) when you should probably just focus that on making your product and youtube presence so wicked that people bang down your door to buy
However, I will say. The moment you start hiring sales reps and marketing reps, here is what starts to happen:
1) Any leads generated from Youtube or inbound email inquiries or etc are treated as "golden leads" and are typically given to the most politically connected reps
2) These inbound leads happen so infrequently that reps often just sit around waiting with "nothing to do"
3) So then marketing starts thinking about outbound massive email blasts to send out
4) and sales reps start thinking about outbound cold calling campaigns to "follow up on the email we sent you"
5) anddd now you've got 500k of payroll per year engaged in the least productive, most intrustive form of prospecting in the world
6) when you should probably just focus that on making your product and youtube presence so wicked that people bang down your door to buy
Not everyone has access to millions of dollars in investment. How am I supposed to keep my startup above the water if we don't sell our product? How are we going to get feedback?
Why aren't people using your product? Why aren't they banging down your door for more features and support?
Until they're doing this, your product isn't good enough.
Until they're doing this, your product isn't good enough.
> Why aren't people using your product
Obviously because no one is (would be) selling it and thus no one knows about it.
Obviously because no one is (would be) selling it and thus no one knows about it.
I unfortunately must disagree with you here. For one of my services, a reddit post and a youtube video were all I needed to get 200 users overnight.
Now, most of them didn't pay, but I can assure you they were beating down my door for more service and more features and etc.
Now, most of them didn't pay, but I can assure you they were beating down my door for more service and more features and etc.
That's nice, but:
1) 200 customers, even if everyone paid, is an order of magnitude less than I need to pay my team (we're primarily a research&development company)
2) Our product/service isn't something you buy without a second thought on an e-shop, based on YouTube video or a Reddit post, it's a big, long-term and important investment that will be a powerful factor in the decisions of your company for the next 10 years and the selling process involves a great deal of analysis and customization, and of course internal negotiation and decision making at the customer's side
3) Our product/service isn't something you'd think you need before we offered it to you, and each company has very different needs
4) Everyone we're competing against has powerful sales teams, if we don't do it, everyone will buy from them because they got there first and the cost of switching is way too big
1) 200 customers, even if everyone paid, is an order of magnitude less than I need to pay my team (we're primarily a research&development company)
2) Our product/service isn't something you buy without a second thought on an e-shop, based on YouTube video or a Reddit post, it's a big, long-term and important investment that will be a powerful factor in the decisions of your company for the next 10 years and the selling process involves a great deal of analysis and customization, and of course internal negotiation and decision making at the customer's side
3) Our product/service isn't something you'd think you need before we offered it to you, and each company has very different needs
4) Everyone we're competing against has powerful sales teams, if we don't do it, everyone will buy from them because they got there first and the cost of switching is way too big
That's a bold statement. What's your reason to make it?
I replied to the other two posters with some detail but I will give you another story from a former employer:
This employer sold a tool that removed crappy data from salesforce databases. It was available for free from competitors, but the company was too proud to release it for freemium-type marketing.
So, they constantly had a revolving door of 30 high school graduates who would be calling literally random people that the IT guy scraped a list off of random sites. The quality of the data was atrociously bad, but the CEO didn't believe it was bad. He instead blamed the interns and the reporting, fired them all, and brought new, "hungrier" ones in and forced them to use an auto dialer.
Out of the 60,000 phone calls this team made, not a single one of them resulted in a sale. The company continues to burn 800k a month in losses.
They have tried to pivot to a Youtube presence, but they only have one guy doing it instead of a full team. Additionally, their product is shit and non-differentiated. So, it's only a matter of time until their Founder, who is worth 150M, decides its time to pull the plug on his terrible, disorganized side-project of a company.
This employer sold a tool that removed crappy data from salesforce databases. It was available for free from competitors, but the company was too proud to release it for freemium-type marketing.
So, they constantly had a revolving door of 30 high school graduates who would be calling literally random people that the IT guy scraped a list off of random sites. The quality of the data was atrociously bad, but the CEO didn't believe it was bad. He instead blamed the interns and the reporting, fired them all, and brought new, "hungrier" ones in and forced them to use an auto dialer.
Out of the 60,000 phone calls this team made, not a single one of them resulted in a sale. The company continues to burn 800k a month in losses.
They have tried to pivot to a Youtube presence, but they only have one guy doing it instead of a full team. Additionally, their product is shit and non-differentiated. So, it's only a matter of time until their Founder, who is worth 150M, decides its time to pull the plug on his terrible, disorganized side-project of a company.
Super grateful to a16z and YC for these. I wonder as a founder doing their own sales, if there are resources about actual tactics, how to make calls, handle objections, etc.
These strategy videos are great. Does anyone have a recommendation on an equivalent for the day-to-day of working a pipeline?
These strategy videos are great. Does anyone have a recommendation on an equivalent for the day-to-day of working a pipeline?
I don't have a ton of experience selling and haven't closed any deals for our company yet, so take this with a grain of salt, but... the sales approach that I am very fond of, and think has a ton of potential, is Jeff Thull's system, as outlined in Mastering the Complex Sale, Exceptional Selling and The Prime Solution.
Thull's approach is rooted in a developing a deep understanding of how you can create value (real value, mind you) for your customers, and to communicate with them in a way that conveys a very honest and sincere approach. As opposed to the old "Always Be Closing" mantra ala Glengarry Glen Ross, Thull advocates an "Always Be Leaving" approach, where you leave as soon as it's obvious that your solution isn't good for the customer. He would have you recommend a competitor's product if it's actually the better choice, etc. The idea is, as I understand it, two-fold:
1. Trying to sell a solution to a customer who doesn't really need it / has better options, is wasting your time
and
2. The more honest relationship you develop doing this this way will benefit you down the road when the same customer has new needs and your product is the best solution, or when they recommend you to their friends because you treated them with respect, etc.
If I had to summarize it in a way that is probably grossly over-simplifying, but which still captures a lot of the spirit of the thing (I think), I'd say it comes down to:
1. Develop a very deep understanding of your customer, their business, their market, etc.
2. Be hyper-honest with your customers.
I think this approach has a lot going for it, but again, I can't say from real first-hand experience because I haven't spent enough time in the field actually working it. Ask me in a year and hopefully I'll know a lot more.
Thull's approach is rooted in a developing a deep understanding of how you can create value (real value, mind you) for your customers, and to communicate with them in a way that conveys a very honest and sincere approach. As opposed to the old "Always Be Closing" mantra ala Glengarry Glen Ross, Thull advocates an "Always Be Leaving" approach, where you leave as soon as it's obvious that your solution isn't good for the customer. He would have you recommend a competitor's product if it's actually the better choice, etc. The idea is, as I understand it, two-fold:
1. Trying to sell a solution to a customer who doesn't really need it / has better options, is wasting your time
and
2. The more honest relationship you develop doing this this way will benefit you down the road when the same customer has new needs and your product is the best solution, or when they recommend you to their friends because you treated them with respect, etc.
If I had to summarize it in a way that is probably grossly over-simplifying, but which still captures a lot of the spirit of the thing (I think), I'd say it comes down to:
1. Develop a very deep understanding of your customer, their business, their market, etc.
2. Be hyper-honest with your customers.
I think this approach has a lot going for it, but again, I can't say from real first-hand experience because I haven't spent enough time in the field actually working it. Ask me in a year and hopefully I'll know a lot more.
My favorite book on sales tactics is Chet Holmes, the Ultimate Sales Machine. Here is a summary:
https://capitalandgrowth.org/articles/893/book-summary-the-u...
https://capitalandgrowth.org/articles/893/book-summary-the-u...
I'm a big fan of Chet Holmes and The Ultimate Sales Machine as well. He did a series of videos as part of some conference thing with Tony Robbins, and those videos have some really good stuff in them. I'm not necessarily a huge Tony Robbins fan per-se, but the stuff he did with Chet was solid.
Useful stuff, but some of it is rather... unstartupy?
The suggested ad text for a "superstar" employee (what kind of advice is that anyway? "Hire smart people"? Eh thanks!) reads like the most generic job ad ever.
And having "How much would you pay to save your own life?” as a health insurance advertisement? That's some /r/LateStageCapitalism material
The suggested ad text for a "superstar" employee (what kind of advice is that anyway? "Hire smart people"? Eh thanks!) reads like the most generic job ad ever.
And having "How much would you pay to save your own life?” as a health insurance advertisement? That's some /r/LateStageCapitalism material
Checkout the Salesman Podcast: https://www.youtube.com/channel/UCL5m7amy0FXEAe9WxhXTI_A Huge amount of great content here.
Indeed. I thought it was going to be a one off video but pleasantly surprised by the comprehensive coverage of all parts of sale thats relevant to a solo founder.
These kind of stuff are the rare gems you get once in a while from HN.
These kind of stuff are the rare gems you get once in a while from HN.
I imagine it would depend a lot on what type of service you are offering and whether sales and marketing is something you can automate digitally for your business.
Jordan Belfort's straight line persuasion sales training video series offer an interesting analysis of how to perform direct to consumer telephone sales: http://jordanbelfort.com/order-straight-line-persuasion/
Jordan Belfort's straight line persuasion sales training video series offer an interesting analysis of how to perform direct to consumer telephone sales: http://jordanbelfort.com/order-straight-line-persuasion/
This lessons were very informative and nicely structured. Having these type of short, concept focused lessons are perfect for serving as introductory material.
Great stuff - like many things in the business world, fairly simple and common-sense but it’s highly valuable to run through.
Great series. It mentioned salesforce.com a couple of times. Any other tools that we can use?
Pipedrive. Surely not applicable to every type of sales process but clean and intuitive UI.
https://close.io/ (YC W11)
Close is much simpler and BS free than Salesforce. Most sales teams I know dislike using salesforce as it is almost always configured to be more complicated than necessary.
Close is much simpler and BS free than Salesforce. Most sales teams I know dislike using salesforce as it is almost always configured to be more complicated than necessary.
If you’re hoping to become a >100-person company I would recommend against Close.io. The reality is that Salesforce is what is what everyone is familiar with, and sooner or later you’ll be glad it’s as extensible as it is.
I’ve worked with two startups that started with Close.io and pretty much outgrew it by the time they had 3 salespeople. It’s made for very small and simple sales operations.
I ended up migrating them to Salesforce. The migration is a mess because of Close.io’s unconventional way of handling account and lead records, which is unlike any other CMS.
I’ve worked with two startups that started with Close.io and pretty much outgrew it by the time they had 3 salespeople. It’s made for very small and simple sales operations.
I ended up migrating them to Salesforce. The migration is a mess because of Close.io’s unconventional way of handling account and lead records, which is unlike any other CMS.
I've used
https://leadiro.com/
recently. You can search for people based on their job description. It worked OK - I'm trying to sell to a niche of professionals and it found about 5% of how many I would expect given my query but it's better than nothing
I’d like to suggest “Hacking Sales” for a fantastic up-to-date list of modern sales tools.
The book is all about the “Sales Stack” ;-) Short but sweet!
The book is all about the “Sales Stack” ;-) Short but sweet!
Loved the 6th video - How, when and who of sales. I was pleasantly surprised how the generic advice to find a corporate sales guy to lead your early stage startup sales is so ineffective.
A similar analogy to engineering also applies I guess. One who functions well in a corporate engineering department - with a ton of support might not do well in an early stage startup and vice versa.
A similar analogy to engineering also applies I guess. One who functions well in a corporate engineering department - with a ton of support might not do well in an early stage startup and vice versa.
Thanks to a16z and Peter Levine for this course.