For whatever reason, this week the workshops focused largely on enterprise-oriented companies, and the Founder Stories happened to come from two people involved with an enterprise-focused company. From a general standpoint, this week has been about growth. Companies are spending a lot of time working out their strategy for the next 6-12 months, and which direction they will head after Techstars.Read More
If you haven't read any of the previous posts, start with my post about Techstars Week 1. Efficiency was the key in Techstars last week, and with that in mind, I'm going to make this post mostly in bullet points.
Mentor Madness continued last week, though everyone was starting to try and reduce the number of meetings to key personalities, and investors starting making their rounds.
Sales is Still King for Techstars Companies
This point was hammered home yet again, throughout the week. Not only does sales actually involve a lot of things - customer interviews, verbalizing and articulating your value proposition and benefits, convincing customers to buy, and actually closing - but it's the true determinant of product/market fit, investment readiness, and a host of other good things.
In essence, if you can prove some sales success, a lot of other things will become much easier. Financing, hiring...you get the gist. And more often than not, teams are still getting their heads around the fact that they are ready to increase their sales volume, and don't require more product development or hiring, or other things on their priority list. They just need to sell. It will probably take some more time before it really hits home with everyone.
Techstars companies in general are a little closer to product/market fit than a lot of startups, but the lesson is that you're probably ready to sell before you think you are.
Closing is a Skill
We had a great closing workshop (provided internally by a Techstars participant) this week that lasted all of 20 minutes. Seriously. And the end result is a clear, repeatable strategy that can be deployed by anyone who is reasonably persistent, knows your product and value proposition, and is willing to practice. The notes from that workshop:
- You want to be "solution-oriented expert" - not salesperson.
- You listen to the problems of the customer.
- Only go over features that are relevant to them - you need to be able to link features to pain points.
- They have to see the value - cost savings or benefit outweighing cost.
- Time to close: talk about pricing, ask for the close - "are you going to pay with Visa, Mastercard, American Express?".
- Next step: shut up; need to give them time to process.
- First one to talk loses (within reason).
- Be prepared for objections; prepare a list of objections and rebuttals beforehand.
- Try and address these early in the call (ex. ask early if there is anyone else you need on the call to make the decision).
- Don't offer extra rebuttals - they may have more objections.
- Know your competition so you know why you're better.
- You have to hold their hand and lead them through the process.
- Outline all steps to buying for them.
- If rejected, make sure to ask "is there anything I could have done to get your business?" - learn from the rejection.
- If they say they need to check with someone, ask "are there any problems you can foresee?" - always get as much information as possible.
- Use "second voicing" - pretend your manager is next to you when you check on discounts, other options, etc.
- Create urgency - limited time price offer, cap on number of customers, etc.
- Use social proof - show them reviews and testimonials.
- Use the feel, felt, found technique: "I understand how you feel, lots of others have felt that way, what we have found is when app is used it's easy, and we have a great support system".
- Make sure if you don't close, they have an action item for the next step.
The only thing that needs to change between sales jobs is knowing the industry and the product.
Close.io Blog (particularly Steli Efti's writing)
Predictable Revenue - Aaron Ross & Marylou Tyler
Founder Story Insight
This week was an external founder, a former Techstars alumni, who came in to share their insights. As usual, it was a brilliant story, and there was lots of great anecdotes. In keeping with the efficiency theme of this post:
- Talk to customers.
- Celebrate all the small victories.
- If you're building a company, you need to go all-in - no distractions.
- Go where your customers are to build your company.
- Mentor sessions - ask lots of questions, then be ruthless, and pick 3 or 4 to build deep relationships with.
- Raise money when you can, not when you need to.
- Raise from people who want you to succeed as a CEO.
- Team is important, but they are always second to the customer;
- Never hire people you wouldn't want at your birthday party.
- Your job will become miserable the moment you break this rule.
- Hire people smarter than yourself and who have more experience than yourself.
- Hire people who inspire you to overcome the shitty days.
- Enjoy the journey.
- A personal connection with your investor(s) is critical.
- There is a big difference between being stubborn as a founder, versus a lack of self-awareness, and this will scare off VCs if not managed.
- In choosing between customer segments: How big is the pain? How easy is it to sell? How many people are there? Do they have money?
This week also marked an interesting week in chatting about "growth hacking" techniques with both mentors and companies. For those who don't know what growth hacking is, here's a good resource to learn more. I'll be posting more about this in the coming weeks, as I do some work with companies on this topic.
Until next week!
If you haven't read any Techstars posts yet, start with my summary of Techstars Week 1. This was another Mentor Madness week at Techstars, and while the pace picked up even further both in terms of number of sessions and mentors, the productivity in the sessions improved even more. A combination of better mentors and a better understanding on both sides of how to make the most of the sessions made this possible. And for those of us sitting in on the meetings, there was even more to be learned - particularly on the subject of sales, and why you should have them.
"I'd rather sell something I have to build, than build something I have to sell"
...was my favorite quote of the week. And it summarized the sentiment of many of the mentors; get out and sell! Not that teams aren't doing it already. But as one mentor pointedly asked, "Are you a product founder or a sales founder?"; the answer, more often than not, was product founder. But in my opinion, the sales founder (or manager) is critical, and will more often than not determine the outcome of the company in the early stages more than the product founder.
On more than one occasion, when the root of an issue, problem or roadblock was reached, the result was founders realizing they don't need to build the next feature, or refine the product, or build the sales team, or anything else, besides actually selling.
Big Teams Help Early Sales in Techstars
More often than not, those teams which are doing the most selling are those who are larger. The bigger teams (10-16 people) have personnel who are dedicated to selling, and don't have to be involved in the day-to-day operations of Techstars, including Mentor Madness meetings, and the result is that they are selling full-time. Smaller teams struggle to find the time and resources to get all the tasks done they would like, and sales often suffers as a result. Even within these teams, mentors often felt that sales should be a higher priority, and while it sometimes may be a time-consuming or frustrating process (meetings, calls, emails, etc. don't always feel productive), ultimately sales are the strongest metric and validation of your product or idea, and key to ongoing success in the business.
(Caveat: often larger teams are large because they've figured out selling.)
Generally, this week, the advantages of having a great salesperson, or people within the team dedicated to selling full-time were particularly noticeable. If you can build a larger founding group, or at least one that has one completely sales-dedicated person, it will pay off down the road. Alternatively, some of the teams here have realized that the CEO/founder(s) is not a strong sales person, have brought in dedicated salespeople, and have quickly seen the rewards.
Asking Questions is an Art
And yet, it's also so simple. One of my favorite sessions this week was a lesson in just how easy - yet rare - it is to ask great, in depth questions. Mostly, it just revolves around asking "Why?", way more times that you think is appropriate. "What are you doing on the sales front?"..."We're focusing on building the product and relationship with our first big client"..."Why?"..."They're a big client, and there's big potential with them in the future"..."Are you developing your old product still?"..."Yes"..."Why?"..."We don't want to leave our old clients"..."Why not focus on your current product and client, and closing more sales with people like them"..."Uh...I don't know"..."Why?"..."We just wanted to make sure we nail it with this client"..."So why not sell others in the meantime and roll out the product to them too"..."Um...yeah. That sounds good."
A long example, but the result is clear - asking "Why?" (and slight variations of it), even when it's uncomfortable for those across from you, will often lead to some self-reflection or realizations that would not have come if the first answer is accepted. I was surprised (and to some extent amused) during these sessions, at just how powerful this can be.
Interestingly, this tactic is often quoted in classics like How to Win Friends and Influence People as a tactic to be a great conversationalist - just keep asking "Why?", and push the other person to elaborate. Eventually some very interesting things will probably surface.
Founder Stories: Varied Backgrounds, Testing Ideas, and the Infinite Wisdom of Sailing
Founder Stories are quickly becoming one of the highlights of my week, and not just because there's free food and beer involved. This week several founders spoke, and I was once again reminded at just how varied the backgrounds of entrepreneurs in general, and particularly those here, are. Multiple languages, countries, childhoods, educations, and more were highlighted, and while these are very different people in general, there are many similarities in the way they run companies, the questions they have, and their reason for being entrepreneurs.
Obviously the uniting factor between them is their passion for building great companies, but from my perspective, it just highlighted how valuable varied experiences and backgrounds can be in building your company, in a program like this, and in building your peer group as an entrepreneur in general.
As a sidenote, one of the founders told a story about their time sailing, and a particularly harrowing experience that taught them a larger life lesson. As an avid sailor and enthusiast of all things water-related, I could relate particularly well, but I also found it amusing at how many metaphors sailing can provide, and on a larger level, the value of participating in individual sports, sport in general, and being put in stressful situations. But those things will have to be saved for another post. And of course the story also made me want to go sailing.
The stories this week also gave some insight into where great startup ideas come from. There were people who stumbled into their startup, others who tried something they deemed crazy at the time, and others still who built previous experience in a field in building their company.
The lessons from these stories can be summarized as follows:
Start small and test your idea - crowdfunding, a short trial with little to lose, get a paying customer, etc. - whatever you do, find a way to test it at little risk to yourself.
If you figure out you're onto something, be aggressive; once the test is done, don't forget to keep pushing.
Surround yourself with great people: most of the startup ideas had some element of support from others - whether it be friends who will encourage you instead of discourage, family who will chip in a few thousand because they believe in you, or a partner who encourages you to take some time off work and test your idea - surrounding yourself with the right people can make all the difference.
It's easy to see the learning of teams beginning to accelerate, with more productive mentor sessions and large projects being undertaken by many companies. KPIs and metrics are beginning to become a larger focus, and it should be exciting to see the growth focus begin to become central.
The summary from this week:
ALWAYS SELL - selling makes (most) everything better.
Having a team to which you can delegate can keep your momentum and pace high - consider when building your initial team.
Asking great questions, and having great conversations, is often just a matter of asking "Why?" a few more times than feels comfortable.
Don't forget to find out about fellow entrepreneurs, and surround yourself with great people.
Always go sailing whenever possible.
In the beginning: test your idea, sell first, and surround yourself with great people (do I need to say this again?).
Check out the learnings from Techstars Week 4 here.
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