StartupNorth

Editor’s note: This is a guest post by Kevin Swan LinkedIn Follow @kevin_swan. Kevin has cut his chops doing product management at Nexopia.com before becoming it’s CEO. He moved to the dark side with Cardinal Venture Partners and is now a Principal at iNovia Capital.   Thankfully he is an MBA dropout and that’s why we like him. This post was originally published on April 2, 2013.

Often the startup community attaches itself to buzzwords. We all know them. Growth hacker, lean, gamification, pivot, MVP, viral, ninja, disruptive, etc. I, and you, have been guilty of using them. These terms are not bad by nature and most have real meaning behind them. However, often they start becoming ubiquitous terms that lose their meaning and are sensualized by those using them. I have a new one to add to the list – Hustler.

We all know the Hustler. Relentless in connecting with people, customers, partners, investors, etc. Always at every event, following up on every lead and never taking no for an answer. You give them a lead and they turn it into ten new opportunities for their business. They will iterate through their MVP (whoops, I just used a buzzword) 20 times to reach product-market fit if they have to. They never give up and their tenacity is off the charts.

Like most buzzwords, they start off with good intentions. There is nothing wrong with the Hustler. In fact, I wouldn’t want to invest in, or work with, anyone that doesn’t hustle! But, being a Hustler is not necessarily going to lead to success on its own. In fact, it can have the counter effect of resulting in a very inefficient way of building a company.

The entrepreneurs that I have come to truly respect and admire have a characteristic that hustle can’t replace. The only problem is I don’t yet have a buzzword to describe so I will just use this:

savvy /?sav?/ : having or showing perception, comprehension, or shrewdness especially in practical matters

The best entrepreneurs have an amazing ability to navigate a startup through all the ups and downs, risks and opportunities and challenges it encounters. They are never caught off-guard by a development and always have a plan B. They can spot opportunities and paths to take that most can’t. Having an engineering background I often think about making things efficient. Savvy entrepreneurs are just that – efficient. Where a pure hustler is running around trying ten different approaches to a problem the savvy entrepreneur has a calculated plan that nails it in the first couple attempts. The savvy entrepreneur uses their time, relationships and public appearances very stringently. They don’t take a ‘throw it at the wall and see what sticks’ approach. They are thinking three steps ahead all the time. They know the next steps they have to take and aggressively push forward.

In my experiences these entrepreneurs are not that common. If the low costs, low barriers to entry and ability to iterate quickly have had one negative effect it is the belief that a successful startup can be the result of a bunch of experiments and hustle. Sure this works sometimes, the startup world is built on outliers. But, these are just that – outliers. The majority of successful companies are built by savvy entrepreneurs who know their domains, have an unfair advantage and are always three steps ahead of everyone else.

Kevin Swan

Kevin Swan is a Principal with iNovia Capital. After spending time on the operational side of startups he now gets to work with amazing entrepreneurs across North America. He has led investments in Mitre Media, Allocadia, Granify and Growlab. He also serves on the board of Startup Edmonton and Accelerate Okanagan.

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Editor’s note: This is a guest post by entrepreneur Aydin Mirzaee (LinkedIn, Follow @aydin), who is a cofounder and the Co-CEO of Chide.it creators of  FluidSurveys.com and ReviewRoom. 

 Some rights reserved by paul bica

When founding a startup, everyone involved gets used to being told “no”. They are told no for their ideas, no for funding and no for sales. There are two ways to react to no, either get discouraged and give up, or realize that eventually there will be a “yes” and continue working towards that end goal.

The successful startups are those that both persevere through discouragement and try something different

“You don’t learn to walk by following rules. You learn by doing, and by falling over.” – Richard Branson

Stepping out of a comfort zone and doing things that others might not, is the thing that can lead to success.

This was the case when I founded FluidSurveys.com. FluidSurveys.com is an online survey and form building tool. Back in 2008 when we launched, there were already thousands of survey tools available on the market, including a well-known and well financed market leader, SurveyMonkey. It was the focus on selling to large organizations in the early days that has led to FluidSurveys.com becoming one of the top survey providers in Canada and it’s adoption by customers in large organization in over 50 countries including governments, educational institutions and Fortune 500 companies. These are my six tips on selling to large organizations.

1. Get Customer Testimonials Early On

Most of the time, large organizations are skeptical about buying from a startup for a number of reasons. Validation is the best way to get around this issue. Getting positive testimonials from beta customers who were involved in the product development phase and presenting it to large potential clients is an excellent way to validate the product and the company.

2. Try a Pilot Project

Pilot projects are popular with large organizations. FluidSurveys regularly performs pilot projects with large organization and has had successful sales as a result. “Get the targeted organization on a reduced rate pilot project and have them use your product for 6 months to a year. After that, why wouldn’t they buy from us instead of the competition? They are already familiar with us and our work at that point.”

Essentially you want to have the company use you on a smaller scale first, which is a small step towards the goal of establishing a strong relationship. From there, they are comfortable with the product and they will be able to move to using the product on a large scale, and the big steps will be much easier.

3. Understand the Buying Process

With large organizations, the product user will not necessarily be the purchaser. In Business-to-Business sales especially, there are almost always several people to consider in the buying process:  initiators, users, influencers, gatekeepers, and deciders.

When contacting a company, try to understand who your main contact is. While they may not be the decision maker, they could play an incredibly important role in whether or not your product is purchased.

Another important point to consider is the buying timeline your customer may be on. Consider if they will be more likely to purchase at a particular time of year and how long the process may take.

4. Pitch to as Many People as You Can

As a general rule, the product should not be pitched to just one person. Because there are a number of people involved in making decisions, if they can hear the pitch from you, you can be confident they received the right information

Tip: Avoid talking about price until the key purchasers are present. Rough numbers are fine but the final quote should be given after the full presentation.

I would often have to speak to not only the people within the company that make the buying decisions, but also the managers of the IT department. The reason for this is because large organizations are interested in central management: the ability to control the product themselves instead of having you come into the company. The IT department was an influencer in the buying decision since they had expertise with software products.

5. Consider Tiered Pricing

The way that the product is priced is another key component in landing sales with large organizations. The concern is always pricing too high vs. too low. If you’re priced too high, you might lose a bid to the competition. If you’re priced too low, prospects may not value the product. So what do you do?

Here the advice is to implement tiered pricing. Tiered pricing tends to work best for large organizations because their requirements may vary. For example, access for the first 100 users may cost $200/year and the next 100 users may cost $150/year. This is applicable to all sorts of products, not only software. You have to give the impression that you are not coming up with pricing on the spot and keep in mind that large organizations need all the numbers to plan for budgetary concerns. Prepare this information before you initiate a conversation with a potential client.

6. Address the Bankruptcy Concern

One last hurdle for startups to jump is the bankruptcy concern. Large organizations tend to worry about what would happen to their data in the event that the startup should go bankrupt, or has other financial issues. The best way to reassure these enterprises is to have good measures in place in the event that bankruptcy does happen, and be able to easily explain them to large organizations.

The most favorable way to alleviate these concerns from organizations is to give them the ability to download all of their data at any time or keep all of the data (and possibly the software itself) with a 3rd party (this is called escrow). The agreement and the conditions for the release of that data would then depend on the end situation.

In the end

The key is to be able to answer every question that big customers have. Better yet, covering their concerns before they even ask is a sales tactic that demonstrates your previous experience in working with other large organizations.

These sales tips for selling to large organizations have helped FluidSurveys.com more than double in staff, users and revenue in the past 6 months. Selling to large organizations is the key factor that I attribute to our current product and corporate success.

Aydin Mirzaee

Aydin is the cofounder and co-CEO of Chide.it a software company that empowers intelligent decisions.Using our FluidSurveys and ReviewRoom products, organizations are able to collect, organize and evaluate information in order to make business critical decisions. Chide.it was established in February 2008 and today our software is used in over 40 countries by people from all walks of life. Fortune 500 Companies, Global Non-Profits, Colleges & Universities, Government Institutions and even smaller grass-roots organizations and startups rely on Chide.it software to help them collect and analyze the data they need in order to succeed.

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Bullseye by Joe Prosperi

Within a marketing strategy, it goes without saying that target audiences are a key consideration.

For all the focus on nurturing an idea, addressing a point of pain and developing a product, the ability to achieve traction hinges on the ability to connect with target audiences. Again, it’s an obvious statement.

The trick and challenge is identifying target audiences, their demographics, needs and buying behaviour. For some products, target audiences can be straightforward, while other products appeal to a variety of target audiences with slightly different needs.

For startups, getting a good grasp on target audiences can be a challenge because they may not have the resources to conduct in-depth research – be it through surveys, interviews, focus groups, etc.

It means developing target audiences can be a quasi-guessing game that include a number of assumptions. In an ideal world, these assumption are pretty accurate so a startup’s sales and marketing activities are aimed in the right direction.

It also possible the target audiences that had been identified are either not right or a startup attract customers who weren’t originally identified or seen as a priority.

It is important to continually get as much information about their customers. Who are they? How did they find you? What are their needs and motivations? How did you find you? What alternatives or competitors did they consider?

Getting this information provides valuable insight that can confirm target audiences or deliver eye-opening information about new customers and new sales opportunities.

So how does a startup begin the target audience process?

It begins with creating personas that identify a customer’s age, education, needs, goals, purchase risks, how they get information and do research, and the buying process. This will help you create a pretty good buyer profile. Keep in mind, there can be multiple buyer personas for your products.

Buyer personas provide direction and insight into the ways to reach the different parts of your target audiences. If possible, you can interview people who fall into these buyer personas to test your assumptions and, if necessary, tweak or overhaul them.

The reality for startups is nailing their target audiences can be difficult to achieve out of their gate. But by taking the right approach, you can establish a good foundation upon which to build.

Editor’s note: This is a cross post from Mark Evans Tech written by Mark Evans of ME Consulting. Follow him on Twitter @markevans or MarkEvansTech.com. This post was originally published in Sept 18, 2012 on MarkEvansTech.com.

markevans

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