This is a challenge that most entrepreneurs face early on, after they’ve founded a startup but have nothing concrete to sell yet. It’s also a challenge facing anyone who is trying to sell people on an idea that is still just an idea. So today we’ll pass along some of our faculty’s advice on the matter.
The advice comes from a recent The Insightful Leader podcast episode with two clinical professors of innovation and entrepreneurship, Carter Cast and Craig Wortmann ,Kellogg School of Management at Northwestern University .Cast is a venture capitalist for Pritzker Group and former CEO of Walmart.com, and Wortmann is the founder and director of the Kellogg Sales Institute.
Below are some edited excerpts from their conversation.
How to Start Selling Before You Even Have a Product
Q :If you’re leading a relatively new company, how should sales factor into your strategy? What do you need to consider at the very earliest stages of developing your sales strategy?
WORTMANN: “Start now” would be my first bit of advice. One of the mistakes that I made as a newly minted entrepreneur was a really dangerous and sort of arrogant assumption: I didn’t know how to be an entrepreneur, but I knew how to sell.
And it turns out that entrepreneurial selling is fundamentally different than professional selling, because you don’t have anything yet. You don’t have a strategy. You don’t really have a product.
You have maybe at minimum a viable paper napkin with a drawing on it. And now you have to go sell that to somebody? Or you have to raise money on that?
My biggest mistake was I thought, “well, okay, before I start selling, let’s see if we can get this right. Let’s code the software. Let’s make sure it all works.
I know what customers want.” And I sort of metaphorically went in the cave and we built all the software. And then we emerged from the cave and everybody kind of went, “yeah, that’s not what we want.” I said, “what do you mean?”
What I should have been doing is just saying, “hey, customer X, here’s our vision for this. Not sure it’s right. Here’s why we want to do this. And here’s what we think you need.” And then using that 15-second or one-sentence articulation of the value proposition to ask, ”does that resonate with you?” And then iterate, test and iterate.
CAST: One thing I’ve learned partly from you and partly from just being in these entrepreneurial jobs is everyone is in sales.
WORTMANN: Bless your heart for saying that.
CAST: When you’re an entrepreneur, you are in sales. You have to do a very good job of being concise and clear about what you’re selling, which takes real discipline. Craig walked me through a process that I found very interesting.
You start off by explaining your product’s value proposition in a minute, then explaining it in 30 seconds, then explaining it in 15 seconds, then actually doing a tweet and then doing a hashtag, taking it all the way down. Learning to be disciplined in being more and more concise about landing the description of what you’re selling right off the bat is really hard.
Q: In these earliest conversations, are you actually getting a sale or is that not really your goal out of those initial conversations?
WORTMANN: At time zero, there’s so little definition around your company, and your product, and your solution, and what problem you’re solving, and even the value prop, that you’re asking for advice. You’re saying, “hey,” in a very humble way, “may I just talk to you about what I think this value proposition is and see how this lands on you, and whether you would value it in your company, and if it would solve a real problem for you?” That’s what you’re actually asking, but I characterize that as selling. That’s selling.
Q: Okay, let’s say you have your product, or what you think is hopefully going to be your product. You’ve got a really tight budget. What are some of the most cost-effective things that you can do to increase your sales?
WORTMANN: Make lots of contacts with potential customers. And that usually lands on people as some tough love—and it is. The hardest part of any sales process for any company in the world, generally, is the beginning, because you’re looking at a white piece of paper or an empty database and your job is to fill it.
That’s the job of sales, at least at the beginning. If you’re on a shoestring budget, the best thing you can do is to pick up the phone and go to networking events to the extent that you can afford it and talk to as many people as you can.
That is cost-free or a very low cost. And here’s, again, the tough love: so many entrepreneurs, so many huge sales organizations, don’t do that.
Why? Because it’s hard and it’s awkward. Because you’re walking up to people who don’t know you, and we humans, we like to be comfortable. And sales, at least at the beginning, can be dramatically uncomfortable.
Courtesy: Kellogg School of Management