Sales as R&D

After years of talking to start-ups and fellow seed stage investors, I have noticed that the smart ones understand that in a startup environment, the selling process doubles as a research and development process.  In my mind, learning how to sell a new product is one of the defining differences between a technology startup and an established business. 

Great startups not only invent a new product, but also invent a way to sell that specifically benefits their product or service. As Geoffrey Moore points out, most great startups are innovative when it comes to their products and  when it comes to how they market.

I would add that startups can benefit by implementing the same steps for a new sales process as they would for a r&d process.

How do I propose you find the overlap? 

• Like product R&D, don’t invest too much too quickly.  Innovation is an iterative process. Be sure to budget for the time to experiment.
• Like product R&D, don’t put all you eggs in one basket.  You will likely need to experiment with pitching to different market segments, different occupations, and different demographics.  Staff accordingly
• Be ready to commercialize, but don’t commercialize prematurely.  Once you think you have a grasp of your target market and resonating value proposition, scale the sales team.

Many engineers I talk to have the misguided “if we build it, they will come,” approach to sales.  To this I say: Bull.  In 1999, I had the chance pleasure of meeting most of the Google sales team in a hotel bar.  Let me tell you, they weren’t talking about algorithms.  While the PHDs at Google deserve a lot of credit for building a great product, we can’t forget that the innovations of the sales team developed for the company.  They are very responsible for getting Google to where it is today.

"Discovering" how to sell your product is as important as coding your software. No one likes to hear "no i won't buy from your company" any more than they like to that their code won't compile, but both are important vital parts of the development process.

Comments

[Mark LaRosa]

Jeff,

This is a GREAT post. I'm going to re-blog it on my start-up sales blog. As someone that started a company (and began my career as a programmer/entrepreneur), I completely subscribe to this idea.

In my start-up sales work now, I am always telling the companies that they need to focus on what people will pay for - and need to make sure that features being built are indeed focused on what the market wants. Often what you THINK it wants,is not what it wants (or is willing to pay for).

Prospects and customers can tell you WAY more than what you can dream up in a closed door conference room.

[Lance Cooper]

Jeff ...

"In my mind, learning how to sell a new product is one of the defining differences between a technology startup and an established business."

Most engineers and technology minds don't get this. Their sophistication doesn't seem to encompass the tie between sales intelligence, target markets, and the judicious 'engineering' of a sales process that also provides market intelligence at startup.

Excellent thoughts.

Lance Cooper, President
SalesManage Solutions

[Jeff]

seems like the mountain view office is all about engineering and algorithms… and the new york office is all about adsence and ad sales.

[Joseph]

Gotcha. I wasn't sure if you were talking about the PPC paradigm or some sort of fancy pipelining system. I think the other genius of AdWords is the lack of a minimum buy-in, although I don't know if they were first with that.

All of what I know about Google internal I learned from Glassdoor.com and my MIT friends. Seems like non-engineers are second class citizens in the google world

[Jeff]

Joseph thanks for asking - The Google sales team pioneered the process of selling key word campaigns. In 1998/99 most advertising campaigns were banner buys. Most online ad sales teams were geared to selling display and CPM. Search key words sales had no playbook. Who to sell to and How to sell had to be discovered/invented.

[Joseph]

Can you elaborate on the innovations of the Google sales team? I'm genuinely curious.