Enterprise Sales | Startup School

Summary

In this insightful talk, Pete Kuman, a YC partner and alumnus, offers a step-by-step guide for software startups to close their first enterprise customers. He emphasizes the importance of the sales funnel, from prospecting to implementation, and shares tactical advice and lessons learned from his time at Optimizely. Kuman dispels the myth that technical founders can't sell, highlighting the advantages they possess. He stresses the significance of understanding customer problems deeply and providing solutions, not just products, to build long-lasting customer relationships.

Takeaways

• 🚀 **Startup Selling Belief**: Founders of early-stage startups are capable of selling their products, especially if they have technical backgrounds and a deep understanding of the product and the problem it solves.
• 🔍 **Sales Hypothesis Importance**: A clear sales hypothesis helps in identifying potential customers and focuses the prospecting process, making it easier to find companies that might need the product.
• 📋 **Prospecting Tools Utilization**: Tools like industry lists, filtering criteria, and platforms like Builtwith can be instrumental in narrowing down the target list for prospecting.
• 🤝 **Warm Introductions Favorability**: Getting a warm introduction or generating inbound demand can be more effective than cold outreach, as it increases the chances of securing a meeting with a prospect.
• 📧 **Cold Email Personalization**: Personalizing cold emails and ensuring they are concise and clear can increase the likelihood of getting a response, and they should be something the sender would be excited to receive.
• 🚫 **Avoiding Anti-Patterns**: Founders should avoid talking to anyone who will take their call, as this can lead to wasting time on bad customers and not getting valuable feedback.
• 💡 **First Call Focus**: The initial call with a prospect should focus on qualification and understanding the customer's problem rather than immediately pitching the product.
• 🎬 **Demo Storytelling**: A successful product demo should tell a story that demonstrates how the product solves the customer's specific problem, using personalized elements to connect with the audience.
• 💰 **Pricing as an Experiment**: Pricing involves a degree of trial and error; startups should use early conversations to gauge customer reactions and adjust pricing strategies accordingly.
• 📉 **Avoiding Undervaluing**: Underestimating the product's value or offering it for free in exchange for feedback can be detrimental; higher prices can indicate a product's worth and seriousness of the customers.
• 📝 **Procurement Process Understanding**: Recognizing and understanding the procurement process within a company is crucial to avoid surprises and ensure a smooth transition from agreement to purchase.
• 🛠️ **Implementation Ownership**: Founders should treat the customer implementation as their responsibility, actively managing the process to ensure the product is used effectively post-sale.

Q & A

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

Pete Kuman's talk focuses on guiding software startup founders through the process of closing their first enterprise customers by discussing successive steps in the sales funnel, including prospecting, outreach, qualification, pricing, closing, and implementation.

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

Sales is the number one concern because it is a critical skill for early-stage startup founders to master in order to successfully sell their products to other businesses, and it is often a challenging skill to learn, especially for those 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 building a product for other businesses, you are capable of selling it yourself, and it's likely that you will be the only person capable of doing so initially.

Why might hiring a talented salesperson not be the best approach initially?

Hiring a talented salesperson initially might not be effective because sales before finding product-market fit is fundamentally entrepreneurial, requiring vision, credibility, and a tight feedback loop with the product builders, which is a role better suited for founders.

What advantages do technical founders have when it comes to selling their products?

Technical founders have the advantage of being experts in the problem they are solving and the product they are building, as well as having conviction in their product's ability to solve the customer's problem, which are important factors in effective sales.

What is the purpose of a sales hypothesis?

A sales hypothesis clarifies who you should be talking to by stating which customers have a particular problem that your product can help solve, making the prospecting process more targeted and efficient.

Why is it important to identify the right humans at potential customer companies during prospecting?

Identifying the right humans ensures that you are reaching out to individuals who are likely to be interested in and have the authority to make decisions about purchasing your product, increasing the chances of a successful sale.

What is the main goal of outreach in the sales process?

The main goal of outreach is to get the attention of potential customers and ideally schedule a meeting with them to discuss your product further.

Why is it a mistake to talk to anyone who will take a founder's call without being selective?

Talking to anyone who will take a call can lead to wasting time on bad customers who are easy to talk to but not actually interested in buying the product, which gives a false sense of progress and can be counterproductive.

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

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

How should a founder approach a product demo?

A founder should approach a product demo by telling a story that shows how their product solves the main character's problem, personalizing the demo for the audience, and avoiding a simple feature tour.

What is the key to delivering a great demo?

The key to delivering a great demo is to make it feel like a good story with a clear flow, personalized for the audience, and including 'magic moments' that surprise and delight the audience with the product's capabilities.

Why is it important to ask questions during the qualification call?

Asking questions helps to deeply understand the customer's problem, which is essential for providing a relevant solution and demonstrating that you are listening and care about their specific needs.

What is the biggest mistake founders make when it comes to pricing their products?

The biggest mistake is often underpricing their product or making it free in exchange for feedback, which can devalue the product and not accurately test the market's willingness to pay for the solution.

How should a founder approach the procurement process with a potential customer?

A founder should ask questions to understand the procurement process, work to streamline it where possible, and maintain constant communication with the customer's champion to help navigate any obstacles.

Why is implementation considered a crucial part of the sales funnel?

Implementation is crucial because it is the phase where the customer actually starts using the product, and it is the founder's responsibility to ensure a smooth transition from product to solution, which can lead to long-term customer satisfaction and retention.

What is the final step in the sales funnel according to Pete Kuman?

The final step in the sales funnel is when the customer is habitually using the product, indicating a successful implementation and the potential for a long-term customer relationship.

Outlines

00:00

😀 Introduction to Enterprise Sales for Startups

Pete Kuman, a group partner at YC and a YC alumnus, introduces his talk on closing enterprise customers for software startups. He outlines the sales funnel steps: prospecting, outreach, qualification, pricing, closing, and implementation. Kuman emphasizes the importance of founders being capable of selling their products, especially in the early stages, and shares his experiences and lessons learned from Optimizely. He also discusses the common misconceptions about sales and the advantages technical founders have in selling due to their expertise and conviction in the product.

05:01

🔎 Prospecting and Outreach Strategies

The script delves into the first two steps of the sales funnel: prospecting and outreach. Prospecting involves identifying potential customers and creating a list of companies and individuals who might need the product. Tools like industry lists and 'builtwith' can help in this process. Outreach aims to get the attention of these prospects, ideally by having them reach out to the seller. The speaker advises against cold emailing without personalization and warns against the anti-pattern of talking to anyone available rather than focusing on potential customers who align with the sales hypothesis.

10:01

📞 Qualification and the Art of the First Call

In this section, the focus is on the first call with a prospect, which is crucial for qualification. The goal is to determine if the prospect has the problem the product solves, the budget, and the decision-making authority to purchase. Founders are cautioned against immediately pitching their product and instead encouraged to ask questions to understand the prospect's needs. The speaker highlights the importance of listening and tailoring the sales approach to the individual rather than treating companies as monolithic entities.

15:03

💰 Pricing Strategies and Negotiation Tactics

The script discusses the complexities of pricing a product, especially in the absence of a one-size-fits-all formula. It suggests asking probing questions early in the sales process to gauge the customer's budget and the problem's cost to them. The speaker advises against undervaluing the product and emphasizes the importance of using pricing conversations as learning opportunities. They also note that higher prices can indicate a product's necessity and seriousness to the customer.

20:04

📝 Closing the Deal and Navigating Procurement

The paragraph covers the process of closing a deal, which involves more than just a single conversation. It includes understanding the procurement process of the customer, which can involve security, privacy, legal, and compliance reviews. The speaker warns against being surprised by the complexity of this process and recommends asking questions to anticipate potential hurdles. They also stress the importance of keeping legal documents simple and leveraging the customer as an ally in the procurement process.

🚀 Implementation and Ensuring Customer Success

The final paragraph discusses the often-overlooked aspect of implementation, which is critical for customer success. The speaker shares experiences from Optimizely, where they realized that selling a product is not enough; ensuring the customer implements and uses the product is key. They suggest treating customer implementation with the same priority as an internal project, involving detailed plans, task ownership, and regular check-ins. The ultimate goal is for the customer to habitually use the product, leading to long-term success.

Keywords

💡Enterprise sales

Enterprise sales refers to the process of selling products or services to large organizations rather than individual consumers. In the video, the speaker focuses on the intricacies of enterprise sales for software startups, emphasizing the importance of understanding the sales funnel and the steps involved in closing enterprise customers.

💡Sales funnel

The sales funnel is a visual representation of the customer journey from initial awareness to the final purchase decision. The script outlines the successive steps in the sales funnel, including prospecting, outreach, qualification, pricing, closing, and implementation, which are crucial for startups looking to secure their first enterprise customers.

💡Prospecting

Prospecting is the initial step in the sales process where potential customers are identified and a list of companies that might need the product is compiled. The script mentions the use of tools and hypotheses to make prospecting more efficient and targeted.

💡Outreach

Outreach involves getting the attention of potential customers and scheduling meetings with them. The speaker in the video discusses various strategies for outreach, including cold emails and leveraging inbound demand by creating content and engaging in forums.

💡Qualification

Qualification is the process of determining whether a prospect has the problem the product solves, the budget to purchase, and the decision-making authority. The script highlights the importance of asking questions during the first call to qualify prospects effectively.

💡Product demo

A product demo is a presentation that showcases how a product works and how it can solve a customer's problem. The video emphasizes the importance of personalizing demos and telling a story that aligns with the customer's needs, rather than simply listing features.

💡Pricing

Pricing refers to the strategy of determining the cost of a product or service. The script discusses the challenges of pricing for startups, suggesting that founders should ask questions to understand the customer's budget and use early pricing conversations as learning opportunities.

💡Closing

Closing is the final stage of the sales process where the sale is confirmed and the contract is signed. The video describes the potential complexities of closing enterprise deals, including procurement processes and the importance of not being surprised by unexpected hurdles.

💡Implementation

Implementation is the phase where the customer starts using the product. The speaker points out that many founders mistakenly believe this is the customer's responsibility, but in reality, it's crucial for the startup to ensure a smooth transition and address any issues that arise post-sale.

💡Sales hypothesis

A sales hypothesis is a proposed explanation or assumption about who the ideal customer is and how the product can solve their problem. The script uses the sales hypothesis as a starting point for prospecting, helping to clarify the target audience and focus sales efforts.

💡Inbound demand

Inbound demand refers to the interest and engagement generated from potential customers who find the company or product through their own efforts, such as searching online or engaging with content. The video encourages founders to create technical content and self-served demos to attract inbound demand.

Highlights

Pete Kuman shares a step-by-step guide for closing enterprise customers, focusing on the sales funnel from prospecting to implementation.

Sales is a learnable skill, even for founders with technical backgrounds, and is essential for early-stage startups.

The importance of being able to sell your product as a founder, especially before hiring a dedicated salesperson.

The role of vision, credibility, and experimentation in sales before finding product-market fit.

Technical founders have advantages in selling due to their expertise and conviction in the product they are building.

Prospecting involves finding potential customers and creating a hypothesis about who needs your product and how it solves their problem.

Using tools like Builtwith to identify companies likely to suffer from the problem your product solves.

The strategy of getting prospects to reach out to you instead of relying solely on cold outreach.

The effectiveness of warm introductions and personalized cold emails in outreach.

Avoiding the anti-pattern of talking to anyone who will take a call, which can lead to wasted time on bad customers.

The importance of qualifying prospects during the first call to ensure they have the problem, budget, and authority to buy.

The misconception that selling to companies who buy quickly is always beneficial, regardless of their suitability as customers.

The role of demos in convincing prospects that your product can solve their problem, rather than just showing off features.

Pricing strategies for startups, including the importance of asking questions to understand the customer's budget and needs.

The danger of undervaluing your product and the benefits of charging higher prices to gauge customer demand and seriousness.

Managing the procurement process effectively by understanding the customer's buying process and involving the right stakeholders.

Implementation is not just the customer's job; founders must treat it as a high-priority project and manage it actively.

The importance of ongoing communication with the customer throughout the sales process, especially during procurement and implementation.

The sales funnel does not end with a signature; it concludes when the customer is habitually using your product.

The value of learning from sales experiences, making mistakes, and continuously improving your sales approach.

Transcripts

[Music]

my name is Pete Kuman I'm a group

partner at YC and a YC Alum I was

co-founder and CTO of optimis Le in the

winter 2010 batch in this talk I'm going

to walk step by step through the process

of closing your first Enterprise

customers I'm going to do that by

focusing on successive steps in the

sales funnel prospecting Outreach

qualification pricing closing and

implementation I'll do my best to

include lots of tactical advice and

counterintuitive lessons I picked up

while I was learning how to sell at

optimized Le I'm going to focus on

Enterprise sales for software startups

but this talk should still be broadly

useful to any founder getting started

with sales regardless of the size of

your customers or what you're selling

why am I giving this talk well first I

know there's demand for this sales is

the number one concern during the the

batch for most of the founders that I

work with at YC second I know from

experience that sales is a learnable

skill my co-founder Dan and I both had

technical backgrounds we knew how to

build a product but we didn't know how

to get people to use it we figured it

out through trial and error and that's

the first big lesson I want to impart

today if you're the founder of an early

stage startup and you're building a

product that you're hoping other

businesses will buy you are capable of

selling it that's the good news the bad

news is that you're probably the only

person capable of selling your product

that is if you aren't able to sell your

product yourself at first chances are

you're not going to be able to hire

somebody else to do it for you now if

you're anything like we were you're

probably thinking there are lots of

talented salespeople out there wouldn't

it be faster to hire one of them than

try to do it ourselves after all that's

what you probably do with any other role

like designers or lawyers or accountants

the problem is that sales before you

find product Market fit is very

different from sales after you find

product Market fit sales pre pmf is

fundamentally entrepreneurial it

requires vision and credibility with

customers and lots of experimentation

and a tight feedback loop with the

people building the product this is a

role for Founders so does that mean if

you're a team of technical Founders

building a product you should go find a

business co-founder to do sales well you

probably don't need a business

co-founder to sell either I've worked

with many technical Founders who turned

out to be great at selling in some cases

very much to their surprise so why is

that well if you're a technical founder

building a product you have several

advantages that will give you a big leg

up in selling first you're an expert

both in the problem you're solving and

the product you're building and second

you have conviction you sincerely

believe that your product will solve

your customer's problem expertise and

conviction are surprisingly important in

sales this is especially surprising to

people who mistakenly think that selling

is a dark art full of psychological

tricks sales isn't about tricking people

it's fundamentally about helping people

solve their problems and Engineers are

great at doing that anyway now that I've

hopefully convinced you that you're

capable of selling your product let's

talk about how to do that like I said

we're going to go through the step in a

typical sales funnel together let's

start with prospecting prospecting means

finding potential customers the output

of this step is a list of companies you

think might need your product and the

specific humans at those companies you

think might buy it there are lots of

tools you can use for prospecting but

before you start you need a hypothesis a

sales hypothesis goes something like

this customer X has problem Y and our

product will help them solve it a good

hypothesis makes prospecting Easy by

clarifying who you should be talking to

for example at optimizely our initial

hypothesis was something like this

marketers at small and medium Tech media

and e-commerce companies want to run AB

tests on their websites but they can't

because offthe shelf experimentation

tools require users to write code

optimizely will enable them to run AB

tests without writing code and once you

have a clear hypothesis like that you

can get to work on prospecting start by

identif identifying companies that are

likely to suffer from the problem you're

solving one way to do this is to buy

industry lists of all of the companies

in a given sector and then use some

filtering criteria to qualify those

companies and narrow your target list

for example at optimizely we used a tool

called builtwith to figure out whether

prospects were using analytics tools and

JavaScript Frameworks because those were

signals that a company was relatively

sophisticated and cared about their

website once you have list of companies

you'll need to find the right humans at

those companies and their contact

information there are tools that make

this easier this video was recorded

during the winter 24 batch and many

Founders in the current batch are using

Apollo and Linkedin sales navigator for

that now that you have a list of leads

that is specific humans that are likely

to buy at the companies you're selling

to you'll need to get their attention

this step is called Outreach the goal of

Outreach is usually to schedule a

meeting with your prospect most Founders

think of cold Outreach as the primary

mechanism for doing this but the easiest

way to get a meeting with a prospect is

to get them to reach out to you even if

you're planning on using a sales Le

approach you should still do everything

you can to generate inbound demand

launch early and often create technical

content like videos and blog posts that

prospects can find while searching for a

solution to their problem build

self-served demos that people can share

find online forums where your customers

hang out and establish yourself as an

expert by answering questions there's no

one way to do this but the better you

get at grabbing your customers attention

and getting them to reach out to you the

more efficient your sales process will

be on that note if your customers all

hang out and Industry conferences you

should be there too find a way to get a

list of attendees ahead of time and set

up lots of meetings in advance once

you've identified a specific Prospect

you want to talk to start by trying to

find a warm introduction if you can look

on LinkedIn for shared connections and

ask for an intro sending cold emails is

usually the least efficient way of

getting prospects attention but it can

still be effective if you approach it

the right way start by writing each

email by hand make your email short and

to the point and make the ask clear you

should also make it clear why you're

reaching out to each recipient

specifically humans have built-in spam

filters and if your email looks like it

was sent to thousands of people it's

going to get deleted on this last Point

there's a handy rule of thumb to keep in

mind for cold emails only send emails

that you yourself would be excited to

read if you wouldn't be excited to get

the email you're about to send your

prospect probably won't either before we

move on I want to spend some time

talking about a particular anti pattern

I see with a lot of YC Founders many

Founders start by talking to anyone who

will take their call and the problem

with this approach is that it selects

for the people who are easiest to talk

to not the people who will be be great

customers so if you're not disciplined

about it you'll end up wasting all your

time chasing bad customers that are easy

to talk to I see YC Founders make this

mistake all the time and I get it when

you're starting a company it's hard to

get people to pay attention to you cold

emailing is a demoralizing grind so it's

tempting to go after the people who will

talk to you even if they won't ever buy

your product and the reason this mistake

is so dangerous is because talking to

bad customers gives you the illusion

that you're making progress when you're

not you'll get lotss of great product

feedback from people who think they're

doing you a favor but because you're not

actually talking to someone who needs

your product this kind of feedback is

useless at best and counterproductive at

worst in practice I see Founders make

this mistake in two ways first by trying

to sell enterprise software to startups

now if your product solves a problem

that companies only have when they get

big like for example an HR information

system then trying to sell it to

startups is a waste of time but Founders

still do it all the time because other

startups are much easier to talk to than

busy big company Executives and the

second is trying to go bottom up with a

product that needs to be adopted top

down and that's a little jargony so let

me illustrate it with an example imagine

you're building productivity software

like notion your product can be adopted

bottom up meaning that individual

employees or teams can start using it

independently without having to

coordinate with anyone else inside the

company and in this case talking to

individual contributors or their direct

managers is totally fine but what if

you're building building software for

large hospitals in order for a hospital

to start using your product you're going

to need a lot of different teams to

coordinate with each other so you might

need the CIO to sign off on your

security and compliance and you need

their software team to integrate your

product with their in-house systems you

need the doctors to enter billing codes

at after each appointment and you need

their Ops Team to manage Collections and

so on and so on and in this case talking

to an individual doctor won't be useful

you need to talk to a senior leader like

a CFO or a CIO to do a deal now there's

a meme that YC says you should sell to

companies who will buy quickly even if

they aren't good customers this is a

misconception you should try to find

companies that will buy quickly but you

shouldn't spend time trying to sell to

companies that don't actually need your

product or won't be good customers you

need to find people who have the problem

you're solving and the budget and

decision-making authority to buy your

product we'll spend more time on this

point later let's get back to our sales

funnel so you've managed to get your

prospect on the phone your job on the

first call is not to sell your product

that comes later in the first call we're

just trying to do two things first we're

trying to qualify our Prospect by

figuring out whether they have the

problem we're trying to solve and the

budget and decision-making authority to

buy the product and second we're trying

to schedule a follow-up call for a

product demo now many Founders face

plant in the first call by diving

straight into their pitch these Founders

are making one of the biggest founder

sales mistakes not asking enough

questions and they make this mistake

because they misunderstand how sales

work they think of the company they're

trying to sell to as a big monolithic

entity and they think of the sales

process as adversar

where it's their job to come up with a

perfect pitch that will break down their

targets defenses but outside of some

used car dealerships that's not how

sales works in the real world in the

real world you're almost always selling

to an individual human not a big

monolithic entity and that's good news

because humans are easier to understand

than organizations and that turns out to

be really important in the real world

sales is not adversarial it's about

deeply understanding a customer's

problem and help helping them solve it

and great salespeople spend most of

their time listening because that's the

best way to understand someone's problem

they ask all sorts of questions what

made you decide to take this call tell

me about this problem how long have you

had it how bad is it who else does it

affect how do you quantify the impact

why haven't you solved it already what's

your budget for solving it how does your

organization buy software who makes the

buying decision who else will need to

weigh in on this decision now sometimes

when you ask questions like these you

discover that your prospect doesn't

actually have the problem you're trying

to solve or they have it but they don't

care enough about it to buy a solution

or they don't have any budget or any

number of other reasons that they won't

actually be a good customer for you and

if you do that that's great you just

saved yourself and your prospect a lot

of time and you can focus your energy on

other prospects that are more likely to

buy now if on the other hand it turns

out that your prospect does have a

problem you can solve you're in luck

you've earned the opportunity to show

them how your product works the next

step is a demo most Founders think of a

demo as a chance to finally show off

their product in my experience thinking

about it this way is a Surefire way to

deliver a bad demo that's because your

job in a demo is not to show off your

product it's to convince your audience

that you can help them solve their

problem and one helpful trick I've

learned is to think of your demo as the

script for a great movie a great script

always starts with a recap of who the

main character is that's your user and

the problem she's trying to solve this

is your chance to demonstrate how well

you were listening during your first

call if your audience believes you

understand their company and their

problems they're going to take you

seriously when you talk about how to

solve them when you're ready to show the

product resist the urge to take your

audience on a feature tour where you

walk from screen to screen showing them

everything your product can do instead

tell a story that shows exactly how your

main character solves her problem and

this is the point great demos actually

feel like good stories they have a flow

where each step leads to the next and

every feature you show has a clear

reason for being there they usually have

one or more magic moments where you

surprise your audience with how easy or

delightful something is and great demos

are also personalized for the audience

this is where you get to use all of the

information you collected during that

first call tailor the demo to their

company use their logo their website

their customers uh the names of the

people on their team the more you can do

to help them visualize exactly how your

product would work in their company the

better I'll give you an example from the

early days of optimizely when Dan and I

started building we booked demos with

all of our competitors and every single

one of them used a website to show what

it was like to use their products to run

AB tests and we thought this was really

lame so we spent weeks building a

feature that made it easy to demo our

product right on our customers websites

instead of a dummy website and I knew it

was worth it when I saw marketer eyes

light up when they watched us change

things on their landing page that would

have taken them months to do on their

own so if you do a good job your

prospects and their team will come out

of this meeting convinced that you can

solve their problem and if that's the

case it's time to talk about pricing I

get a lot of questions from Founders

asking how to price their products and

the truth is there isn't a simple

formula for doing this so if there isn't

a formula how do you pick a number well

fortunately you can ask questions

earlier in the process that will make

your job easier here like how much is

this problem costing your company how

many people are responsible for

maintaining your in-house solution

what's your budget for solving this

problem how much are you spending on my

competitor and it's okay to wait to

share your pricing until you've had a

chance to ask these questions in fact if

your product requires lots of work or

customization to implement you probably

shouldn't quote a price until you

understand exactly what your customer

needs in any case even if you asked all

of these questions upfront the reality

is that pricing involves a lot of

guessing in the beginning and the advice

that I give to startups is to think of

each pricing conversation you have as an

opportunity to run an experiment in

which you test a price point and then

learn from your prospect's reaction to

it in the early days of optimizely we

had published self-serve pricing for

customers who just wanted to swipe a

credit card for a basic version of our

product and an Enterprise plan that

required you to go through sales we

didn't publish pricing for the

Enterprise plan which gave us the

flexibility to try a different price

each time the pricing mistake that

Founders make most often is charging too

little for their product or even making

it free in exchange for product feedback

Founders do this because they're worried

about charging too much they think

they're going to scare customers away

one of the most surprising things I

learned was that when a customer really

wants your product it's hard to scare

them away by quoting a price that's too

high for example I remember my

co-founder Dan coming out of a sales

call and telling me that he'd worked up

the nerve to quote the prospect $10,000

a month for our software and the

prospect ended up talking us down to

2,000 a month and then buying our

initial quote was 5x what they were

willing to pay and they still bought in

fact higher prices can help you figure

out whether customers actually need your

product the cison brothers famously

charged more for stripe in the beginning

than their competition did the fact that

they were able to sell their product

anyway was compelling evidence that they

were on to something and it helped them

focus on the customers who were most

desperate for a solution high prices

make customers more serious this brings

me to another important point about

pricing remember that the most important

conversations about pricing will happen

without you in the room your prospect

will need to convince others in the

organization that your product is worth

the price you're asking you can make

their job easier by giving them slides

or a PDF one pager that explains how

your pricing works it's usually a good

idea to include an overview of your

product and the benefits of using it in

case your prospect needs to talk to

people who aren't familiar with it in

any case don't spend too much time

thinking about pricing in the beginning

pick number ideally one that makes you a

little uncomfortable and pay attention

to how your prospect reacts it's okay to

let them negotiate you down remember in

your first few sales you're optimizing

for learning not unit economics now that

you've agreed on a price it's time to

close the deal closing is not a single

conversation it's a bunch of things that

need to happen from the moment your

customer decides they want your product

to the moment they actually buy it big

companies especially ones in highly

regulated Industries have formal

procurement processes that usually

include stuff like security and privacy

reviews legal reviews and signoff from

compliance teams it's less formal in

smaller companies but you should expect

at a minimum to go through a redlining

process with their legal team the

biggest mistake that I see Founders make

at this stage is getting surprised and

discovering that what they thought was a

done deal is in fact not done at all and

may take weeks or months of additional

back and forth or fall through

completely now the way to avoid getting

surprised is once again to ask a lot of

questions asking your prospect upfront

how they buy software and who needs to

sign off will give you a clear picture

of the hurdles you're going to have to

overcome in order to get a signature you

should do everything you can at this

stage to move through the procurement

process quickly ask explicitly if there

are steps like filling out a security

questionnaire that you can get started

on early and execute in parallel and

keep your legal documents as simple as

possible I recommend starting with the

open- source templates published by YC

company common paper keep timelines and

scope of work out of the legal contract

if you can and put them in an order form

or a shared project tracking document

instead and most importantly remember

that your prospect who at this point has

become your Champion is your biggest

Ally you should be in constant

communication with them and when you

need help getting something unstuck you

should ask them first remember they

can't solve their problem until you get

through procurement so they're heavily

incentivized to help you make it happen

now that you have a signature

congratulations it's time for your

customer to actually start using your

product this is the implementation and

it's the last step we're going to talk

about today and I'm going to lead with

this the single biggest mistake that

Founders make is thinking that

implementation is the customer's job we

made this mistake more than once at

optimizely in fact we closed six figure

deals with customers that were excited

about product and then we discovered a

year later when it was time for them to

renew that they hadn't run a single AB

test with optimizely and this was

confusing at first why would a customer

who is willing to pay so much for a

product fail to use it at all in this

case the approximate cause is that the

marketing team who bought our software

couldn't convince the software

engineering team to help them install it

on their website the real cause though

is we didn't do our jobs we thought our

customer was buying a product so we sold

them one and left the rest up to them in

reality our customers were buying a

solution to a problem and all of the

work required to get from product to

solution was our responsibility we

learned to start asking marketing

leaders about the work required to

implement optimizely very early in the

sales process we started building

detailed implementation plans with

marketing and Engineering leaders well

before a contract got signed and in fact

if we weren't able to do that we

wouldn't sign a contract at all and the

trick we learned was to treat the

customer implementation the same way

that we would a high priority project

inside of our own company by project

managing it so we put together a shared

road map we made sure that every task

cuted owner we set up regular check-in

meetings to hold everyone on our side

and theirs accountable for getting it

done your sales funnel only really ends

when your customer is using your product

habitually and when you get to that

point congratulations hopefully you have

a customer for life all right we've

covered a lot today from prospecting to

doing your first call delivering a great

demo pricing closing and finally

managing the implementation of course

there's so much more to learn about

sales and the best Founders devour

everything they can on the topic if you

want to go deeper I recommend Peter

kazi's book founding sales it's a

fantastic resource and it's free online

but like most most of the hard things

about building a company the best way to

learn is by going out and doing the

thing so if you only remember one thing

it should be this just get started

you'll make mistakes but with enough

attempts you'll figure it out and

selling will start to feel natural

pretty soon you'll discover that you've

acquired a new superpower you'll find

it's useful not only in getting

customers and revenue but in fundraising

and hiring too and soon enough you'll be

the one giving advice like this to new

Founders thanks for watching

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