Day 24: Startup Sales – A Tale of Grit & Trust
As we approach our beta launch in the next couple of weeks, this is a good moment to talk a little about the basics of sales in a startup.
I never felt like I was doing sales in any of the companies we founded. It’s always been just talking to people. But somehow I managed to close over $15M in sales for Cloud Horizon over the years I was CEO of the company. So It’s not like I haven’t been doing sales, I just don’t do it like most sales people do. I guess that’s why It’s called founder sales and most of us have our own unique way of doing it. Because of that It’s been hard for me to figure out how to write about this subject but I have an idea that I think is interesting.
I’m going to write this article from the perspective of a founder and I’ll tell some stories about the different types of sales I did over the years. I’ll tell you about some lessons I learned on rejection, networking and curiosity.
As part 2 of the Day 24 article, I have asked our superstar sales manager from Vacation Tracker to write an article from a formally trained sales person’s perspective. If Daniela were starting a business like Knowlo today, she will explain how she would start acquiring the first set of customers.
And finally, I have asked CofounderGPT to write part 3 of the Day 24 article which will give some ideas on how AI could be used to improve traditional sales.
Hopefully these 3 perspectives will shed some light on this intimidating part of working on a startup.
Call centers: First experiences dealing with rejection
When I was studying at college and university, I worked in a few call centers and sold various things from payment terminal printing paper to beef jerky. All 4 call centers that I worked for trained me how to sell their products over the phone.
These were mostly summer jobs and I hated most of them. But in retrospective, they served a very critical role by teaching me to deal with rejection. Nothing is better at building your emotional armor than having people scream “fuck you” in your face and then hang up on you while you’re trying to sell them something.
When you start, It’s really difficult to deal with the NOs from potential customers. It feels very personal. Like you are the one that’s being rejected and not the product. But if you stick with it for a while, you learn to separate yourself from what you’re selling and then it feels less personal. The point is to keep going because you eventually become numb to the rejection. I can’t tell you when that happens or for how long you have to keep going, that’s probably something different for each person. What I can say is that I’ve seen a few people cross this threshold, including myself. It’s liberating when you get to the other side.
Another thing that became clear to me through those call center jobs is that sales is a numbers game and that the majority of the time, people will not be interested in what you’re trying to sell them.
At the time, I thought these were just crappy summer or part-time jobs to make some extra cash. Little did I know that the lessons I learned from these jobs were going to stay with me all the way until today. And that I was going to be writing about them in the context of our next startup Knowlo.
GE: Communication and maintaining your network
When I graduated from university, a friend who was working at GE Capital recommended me for an Internal Sales Representative position that they had recently opened in their Business Property group. I actually didn’t want this job, I wanted to spend my last summer after university not working. But my mother basically made me take the job because she thought this was a good opportunity. I’m really glad I listened to her because I learned a lot from GE including how to do more formal sales and working on much larger transactions.
One of the most important sales lessons I got while working at GE is from a top account manager on my team who was consistently closing lots of big deals. One day I asked him what his trick was and he told me that his trick is actually really simple: he’s constantly in contact with his network. He was always out to lunch with someone and on the phone for most of the day.
Frequent and consistent communication allowed him to stay top-of-mind with his network. So when a real estate lending deal appeared, his network would think of him and get in touch. If the last contact was 2 years before financing was needed, they probably would not have thought of him. This is actually a really simple and powerful lesson that ended up saving my first company Cloud Horizon in 2013.
Formal business communication is another important thing that I learned at GE. Especially B2B formal business communication. Knowing how to communicate ideas to customers in a clear and articulate way is a skill that has served me well over the years.
Cloud Horizon: Networking and building a reputation
I left GE in 2009 to start Cloud Horizon. My first company started by providing cloud computing consulting services and then pivoted in 2012 to be a web and mobile development agency. We had lofty ambitions and a very aggressive growth plan in our fancy business plan. We were naive beginners so we missed all of our targets by about 100 miles.
Getting those first couple of sales in Cloud Horizon was brutal. We had no portfolio, we weren’t sure what we were selling and we didn’t know how to price it. What’s more, the technology we were promoting was so new, very few people actually knew anything about it. So that made the sales cycle more complicated and it took a lot longer to close deals because we had to educate our customers first.
This is where I learned the importance of networking. Yes, I knew that your “network is your net worth” and I’m sure most people have heard some variation of that. But I only truly understood what that means when I started trying to get some business for our first company. Within this lesson is also the importance of personal relationships and trust. People in your network are more likely to do business with you or recommend you if you have a good personal relationship with them and if they trust you.
After realizing how important networking is, I took any opportunity I could to meet with people and learn about their businesses. Yes, It’s scary to get out there and start meeting people. This is not natural for most people but you need to push yourself out of your comfort zone. You’ll be grateful that you did once you have the network.
All these meetings with people brought about the second really important thing I learned while doing sales for Cloud Horizon: be curious and ask lots of questions.
Because I don’t do sales in the traditional way, I’m not comfortable being pushy and aggressive with people to close a deal. Instead, my approach has always been that I’m genuinely interested in what they’re doing. I’m interested in how other businesses work, what their challenges are and how they are using technology in their industry. I’m a curious person by nature so it wasn’t difficult for me to extend this curiosity towards the people I was networking with. Everyone likes to talk about themselves and what they’re working on so I made it a point to try to learn as much as I could from other business people.
The third really important thing I learned about sales in Cloud Horizon is the importance of reputation. As Warren Buffet likes to say:
How does reputation tie in to sales? Let me tell you a quick story to illustrate how important reputation is.
Several years ago, I got called in for a meeting at a global organization that is well-known around the world. They were evaluating replacing a part of their development team and they wanted to see if Cloud Horizon could help. I offered to do a test project for them and they said it was not necessary. The CTO of the organization literally told me: “Bill said you’re good, so that means you’re good. Let’s start with 2 developers.”
In case you’re wondering, Bill was the person who recommended us. Bill’s reputation was such that the CTO of a global organization was willing to take a chance on us just because Bill said that we were good. The second part of that is that our reputation was such that Bill was willing to stick his neck out for us. And that was because we had built a strong reputation with him.
A good reputation will help you close deals. A bad one will be a major headwind.
I learned many other things while bringing in new business for Cloud Horizon, too many to list out in this article. Over $15M in projects came in through my network and we got the opportunity to meet and work with some incredible people over the years. For some $15M may not a huge amount money. But for us, it helped sustain the business over many years and provided us with the necessary funds to launch our next startup: Vacation Tracker.
How sales saved Cloud Horizon
While we were building Cloud Horizon, we had a few near-death experiences. I think one story in particular is worth telling because it illustrates the power of some of the lessons I have learned over the years.
It was a little over 10 years ago and Aldo had approached us about doing a super interesting project for them. This was the first big brand that was willing to take a chance on us so we worked really hard on the pilot project to try to close the rest of the deal with Aldo which was supposed to be much bigger. The fatal mistake I made here was that I was so focused on closing this deal that I neglected other potential deals and our entire pipeline was basically this one project.
You can probably sense where I’m going with this. Aldo decided to cancel this project altogether and we were left in a bind: the big project was not happening and we had no new projects in the pipeline. With 5 employees, Slobodan and me, I wasn’t sure how we were going to make payroll in 2 months. I really dropped the ball on this and should not have put so much importance on Aldo. Lesson clearly learned. But now what?
Well I remembered the lesson from GE about staying in contact with your network. So I made a goal for myself: one phone call or meeting per day with someone in my network or someone new that I met recently. I religiously did these calls and meetings for 3 months, 5 times per week.
Believe it or not, this one action completely turned things around for Cloud Horizon. Within 3 months, I was turning people away because we were too busy to take on more projects! And all of that was made possible with the simple strategy: 1 phone call or meeting per day with my network.
Selling SaaS: understanding the pain point
Fast forward to 2018, and we’ve launched our first product Vacation Tracker. we’ve been at it now for over 5 years and I can’t say that we have figured out sales for this type of product yet.
In the beginning, though, I was doing all the customer support and demos myself for Vacation Tracker. There weren’t that many and I was able to manage it. I realized quickly that for this type of product, demos was where the sales were happening for us. Or at least, demos were the closest thing that we had to sales.
Over about 150 demos that I did in the first year, it became apparent that customers were experiencing a pain with whatever solution they were currently using. My job in the demo was to connect how Vacation Tracker could remove this pain for them. So asking questions and figuring out the challenges the customer was facing became the beginning of every demo.
Today, we have 3 people in our support team and I don’t really do many demos any more, although I try to do at least one per month. We are not aggressive and pushy like some SaaS companies. We try to asses if there is a fit with the customer, and if there is, show them how Vacation Tracker could be the solution to their problem. Our demos are actually demos, so I wouldn’t call these “sales” calls.
Most of our signups and demo requests have come through our marketing efforts. We just recently started figuring out which sales channels and strategies could work best for us.
I’ve been working with Daniela on this but we are still in the early stages and I’ll have more to say about this type of sales in a future article.
How are we going to do sales at Knowlo?
For now, the main goal of sales in Knowlo is to bring on some beta users so that we can start collecting feedback. The best way I can think of to do that given that Knowlo is a side hustle, is to try to go through my network and through the demos that will come in through the Knowlo website.
Through our networks, Slobodan and I will try to reach out to some other founders and we’ll ask them if they’d be willing to test out our product in their software. Both of us have pretty big LinkedIn networks and Slobodan has a pretty big Twitter network so I’m sure we can come up with some leads to try out Knowlo.
We’re also going to be allowing people to schedule demos so we’ll be getting an opportunity to speak to some potential customers directly. We’ll get to learn more about their pain points and their feedback will guide us on building Knowlo further. This is how we did it at Vacation Tracker and we’re hoping to repeat it at Knowlo.
One more thing…
One of the most valuable lessons that I learned in life, not just in sales, is the importance of persistence. Being relentless in the pursuit of one’s goals. Setting targets and going after them no matter how long it takes to get there. This has worked for me in life and it has worked for me in sales.
So if there is one last lesson I can convey, It’s that you should not give up easily. Be polite and respectful, but don’t take no for an answer!
This story was meant to illustrate some of my experiences with sales and some of the lessons I have learned. The way I do sales is not exactly the textbook way but it has worked for me. Hopefully some will be able to use some of these experiences as inspiration in their own startups or companies. In the future, I hope to be able to get some help from CofounderGPT to do sales for Vacation Tracker and Knowlo.
I didn’t actually do sales today so the time that was spent was on managing Google ads, Facebook ads, working with CofounderGPT to write its article, and syncing up with Slobodan about the product development and CofounderGPT.
Time spent today: 5h
Total time spent: 166h
Investment today: $87.97 USD ($41.40 USD on Facebook Ads and $46.57 for WordPress)
Total investment: $1,230.01 USD
Beta list subscribers: 74
Paying customers: 0
we’ll be providing an update on our AI content series, our Google and Facebook Ads and other activities we’re doing at Knowlo. we’ll also have to look into some Google Search Console issues that we’ve been having since we set it up.