Enterprise Sales | Startup School

Summary

In this insightful talk, Pete Kuman, a partner at YC and former CTO of Optimizely, guides founders through the intricacies of closing enterprise sales. He outlines a step-by-step approach, from prospecting to implementation, emphasizing the importance of understanding customer problems and tailoring sales strategies accordingly. Kuman shares valuable tactical advice and lessons learned, debunking myths about the necessity of a business co-founder for sales and highlighting the founder's unique advantages in the sales process. His talk is a must for any founder venturing into sales, offering practical insights to navigate the sales funnel effectively.

Takeaways

• 😀 Selling is a learnable skill, and technical founders can excel in it through trial and error.
• 🔍 Prospecting involves identifying potential customers and the specific individuals within those companies who might be interested in the product.
• 📞 Outreach is about getting the attention of potential customers, with inbound marketing often being more efficient than cold calls.
• 🤝 A warm introduction is preferable to a cold email, but if necessary, personalized and concise emails can be effective.
• 🚫 Avoid the anti-pattern of talking to anyone who will take a call; focus on prospects who are likely to be good customers.
• 💡 The first sales call should focus on qualification, understanding the prospect's problem and their capacity to buy, rather than selling.
• 🎬 A product demo should tell a story that shows how the product solves the customer's specific problem, rather than just showcasing features.
• 💰 Pricing involves a lot of guesswork initially and should be informed by questions about the customer's budget and the cost of their problem.
• 📉 Don't undervalue your product; high prices can indicate a genuine need and help filter out less serious customers.
• 📝 The procurement process can be lengthy and complex; understanding it helps in setting expectations and avoiding surprises.
• 🛠 Implementation is not just the customer's job; founders should treat it as a project, ensuring a smooth transition to using the product.

Q & A

Who is Pete Kuman and what is his role at YC?

Pete Kuman is a group partner at Y Combinator (YC) and an alumnus, having been the co-founder and CTO of Optimizely, a company from the winter 2010 batch.

What is the main focus of Pete Kuman's talk?

The main focus of Pete Kuman's talk is to guide software startup founders step by step through the process of closing their first enterprise customers, covering various stages of the sales funnel.

Why is sales the number one concern for most founders during the YC batch?

Sales is the number one concern because it is a critical skill for early-stage startups to acquire customers and generate revenue, and it is often a new challenge for founders with technical backgrounds.

What is the first big lesson Pete Kuman wants to impart to the audience?

The first big lesson is that if you are the founder of an early-stage startup, you are capable of selling your product, and it's likely that you are the only person who can sell it initially.

Why does Pete Kuman suggest that technical founders have advantages in selling their products?

Technical founders have advantages because they are experts in the problem they are solving and the product they are building, and they have conviction in the value of their product, which is important in sales.

What is the purpose of prospecting in the sales funnel?

The purpose of prospecting is to find potential customers, resulting in a list of companies that might need the product and the specific humans within those companies who might buy it.

What is the importance of having a sales hypothesis before starting the prospecting process?

A sales hypothesis clarifies who you should be talking to by identifying the customer type and their problem that your product can solve, making the prospecting process more efficient and targeted.

Why is it more efficient to get prospects to reach out to you rather than only relying on cold outreach?

Getting prospects to reach out to you generates inbound demand, which is often more efficient because it indicates that the prospect is already interested in a solution, making the sales process faster.

What is the main goal of the outreach step in the sales funnel?

The main goal of outreach is to get the attention of the prospect and ideally schedule a meeting for further discussions or a product demo.

What is the key mistake that Pete Kuman advises against when talking to potential customers?

The key mistake is talking to anyone who will take a call without being disciplined about targeting prospects who are likely to be good customers, which can lead to wasted time and misleading feedback.

Why is it important to focus on companies that need your product and have the budget to buy it?

Focusing on companies that need your product and can afford it ensures that your sales efforts are directed towards potential customers who are likely to convert, avoiding the trap of chasing bad leads.

What is the main purpose of the first call with a prospect?

The main purpose of the first call is to qualify the prospect by understanding if they have the problem you solve, the budget, and the decision-making authority to purchase your product, and to schedule a follow-up call for a product demo.

Why should founders avoid diving straight into their pitch during the first call with a prospect?

Founders should avoid this because the first call is about understanding the customer's needs and problem, not selling. A good sales process involves listening and asking questions to deeply understand the customer's situation before presenting a solution.

What is the approach to take during a product demo?

The approach should be to tell a story that shows exactly how the main character (the user) solves their problem using your product, focusing on personalized and impactful moments rather than a feature tour.

Why is it a mistake to think of implementation as the customer's job?

It's a mistake because customers are buying a solution to a problem, not just a product. The work required to transition from product to solution is the responsibility of the seller, and successful implementation ensures customer satisfaction and habitual use.

What is the best way to learn sales according to Pete Kuman?

The best way to learn sales is by going out and doing it, making mistakes, and learning from each attempt. Sales is a learnable skill that becomes more natural with practice.

What resource does Pete Kuman recommend for founders who want to learn more about sales?

Pete Kuman recommends 'Founding Sales' by Peter Kazan, a book that is available for free online and provides a deep dive into the topic of sales for founders.