John LoGioco.com

"Shortening Sales Cycles" continued from TechAviv CA

The TechAviv meetup at Stanford University last night sparked a conversation around how to shorten sales cycles.   Shahar Nechmad, founder - CEO of NuConomy put this question to the attendees.  I have been dealing with sales cycles for quite some time and would like to offer these observations on how to shorten sales cycles for founders like Shahar.  In NuConomy's case, as with most startups the goal is to get a smaller company's "stuff" onto a larger company's platform.  The "close" is identified as the moment the smaller company's "stuff" (read code, tags, API calls etc.) actually gets installed on the pages of the larger company's site.  The mistake most BD and sales people make is to think there is just one sales cycle.  This is simply not true.  Often there are multiple cycles that need to be overcome to win an account and truly shorten the time it takes to get your "stuff" integrated.  For technology sales, even if the product is free as is the case with many tech startups, there are often three distinct sales cycles that need to be identified. 

First is the sales cycle of getting buy-in from the senior business officials.  This process involves standard sales practices of setting meetings, giving presentations and creating a sense of urgency to act.  This is usually not where the delays come that cause sales cycles to extend unnecessarily. 

The second cycle often comes from selling senior ranking product folks who also need to be convinced to act from a platform perspective.  More and more companies are moving to an internal opt-in basis, as business units inside large companies can make their own choices on what to adopt or not.  That said, senior product folks need to "bless" the idea before individual business units can have the choice to opt in or not.  Working through this sales cycle requires a different set of selling points.  The mistake here is to use the same tactics and collateral with product folks as you might use on the senior business folks.  As a general rule, product folks must look out for the enterprise platform, so by nature they are in a more protective mode.  To answer these concerns, materials and pitches that deal with safety, security and stability will greatly shorten the evaluation period.

Third is the sales cycle of getting the actual programmer or developer to integrate the code on the page.  After senior officials and product leads say ok, the last step often lies with the developer.  Often times this is where startups lose control and watch months pass without getting installed or integrated.  It happens to all of us, without exception.  First, a sales or BD person must treat this sales cycle with the same care and attention as they do with the other constituents.  This is where big mistakes are made.  Sales and BD folks tend to think that once they get to the developer level they have the power to "tell" the developer how it's going to go.  This is a blunder that can cost you in months, not days from getting installed.  Second, developers do not want to be sold, and the thought of being contacted by a sales or BD person is most often sickening to them.  To avoid this find out asap the best way to communicate with the developer who may have your "stuff" on their list of todos.  Often times developers do not want to be called, but rather prefer only email.  If you find this out early, you can shorten the sales cycle without doubt.  Third, when you get emails from developers look at the time stamp on the emails.  Often times you will see email sent at off-hours.  This is a clue as to when is a good time to send an email that will be looked at and maybe replied to immediately.  Often times, a simple reminder or inquiry to the progress of an installation is enough for a developer to squeeze your code into the next item on the todo list.  Lastly, don't forget who helped you.  Once installed send a personal thank you to the technical team for installing your "stuff."  Usually there aren't a lot of thanks going around in the back offices of IT or R&D of a big company, so let them know you appreciate the effort.  It will go a long way when it comes time to expand the installation or get recommended to another business unit.

Although there can be three sales cycles within one deal, a sales or BD person does not have to follow the above order.  In fact, one can shorten a sales cycle drastically by starting the deal with a developer level contact or a product person.  These folks have the power to put a piece of code on a page, and this is the first step in proving your worth.  However, tread carefully as this approach does have its risks as senior business people don't like to play catch up so keep this in mind. 

Any other good suggestions please comment and I will post an update on further best practices for shortening sales cycles if warranted. 

Overall this is one of the biggest challenges for BD folks and startups in general and one that I quite enjoy working on.  This is actually a good panel topic for a future talk.  If you are interested in exploring ping me.

Thanks to Yaron Samid, founder of TechAviv for another great event. 

Fisherman & Startups

We had a most busy few weeks over at outbrain.  The market got wind that we closed our B round and we went public on the plans to generate revenue both for our company and network of publishers that range from small bloggers to major media companies.  Both of these events have been the result of great teamwork on behalf of everybody in the company, and with under 20 people everyone played a big role.  For my small piece in business development and in the near term where I will be looking to expand the business development team, there is an interesting observation that I wish to share, and that is the role of the fisherman in early stage startups.  I am not referring to the commonly known act of fishing for fish, but rather to the type of business development talents that are beneficial to startups.  Typically when you evaluate a sales/biz dev person's talents, the first task is to identify if they are a Hunter or Farmer.  In simple terms the Hunter is the consumate closer who is great at closing and hunting business but lacks in skills to grow and nurture accounts.  In contrast the Farmer type is not comfortable predominantly closing business and is better at nurturing exsiting accounts.  Great companies need both of these skill sets but for startups with limited resources neither the Hunter or the Farmer are ideal.  Why?  Because startups often need a closer and a nurturer in one.  Startups, especially those trying to get larger, more established companies to use their services need to close deals but also nurture those deals into strong accounts and references.  This requires a differnet skill set than the classic Hunter or Farmer, and is ideally found in the Fisherman.  The Fisherman is a mix between the Hunter and Farmer.  The Fisherman can hunt or "fish" for new business, but is also mindful to nurture the waters or accounts for future fish/business.  I first learned of this from Robert Kelly who pens a great description of the Fisherman;

"The Fisherman is a model of both patience and well-timed aggressiveness that we need to land new clients.  The fisherman also has the wisdom and respect to cultivate the fishing beds so as to always have a source of food (aka revenues)."   

Well said. The ability to aggressively close business when needed and to grow early wins into great accounts is key for startups.

Fish Where The Fish Are = Sell Where The Deals Can Be Had

Another key skill of the Fisherman is knowing where to fish to be successful.  This is critical in startups because the single biggest force working against business development efforts is chasing deals that do not bear fruit - or fishing where there are no fish.  Getting a prospect to a quick yes or NO, is the best way to ensure time spent is fishing where the fish are.

Releasing The Catch

Sometimes in fishing you have to know when to throw a fish back because it's either dangerous, too small or the wrong kind of fish.  This is the same in business development for startups as the wrong deals can eat into a startups's valulable and limited resources.  In technology, wrong deals that continue to be pursued/brought aboard and not released in time, can eat into a company's development cycles and hinder future growth.  The smart Fisherman knows when to keep a deal on board and when to throw it back.

There are more nuances here in this analogy but seeing that I am a Fisherman in real life both on and off the water, I'll keep the details to anyone who wants to ping me or challenge the thoughts.  In the meantime here's to fishing where the deals are and to tight lines and a fish box full of signed contracts!