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.

Outlines

00:00

😀 Introduction to Enterprise Sales for Software Startups

Pete Kuman, a group partner at Y Combinator (YC) and a YC alumnus, introduces his talk on closing enterprise sales for software startups. He outlines the sales funnel, which includes prospecting, outreach, qualification, pricing, closing, and implementation. Kuman emphasizes the importance of understanding the sales process and shares his experiences and lessons learned as a technical founder who learned to sell through trial and error. He argues that sales before product-market fit is entrepreneurial and requires vision, credibility, and experimentation, which is a role best suited for founders themselves.

05:01

🔎 Prospecting and Outreach: Finding and Engaging Potential Customers

The script discusses the importance of prospecting, which involves identifying potential customers and the specific individuals within those companies who might be interested in the product. Tools like Apollo and LinkedIn Sales Navigator can aid in this process. Outreach is the next step, aimed at getting the attention of these prospects, ideally by having them reach out to the seller. Kuman advises against indiscriminately talking to anyone available, as this can lead to wasted time on bad leads. Instead, he stresses the importance of targeting companies with a genuine need for the product and the authority to make purchasing decisions.

10:01

📞 Qualification and the Art of the First Call

In this section, Kuman explains the purpose of the first call with a prospect, which is to qualify them by understanding their problem, budget, and decision-making authority. He warns against the common mistake of immediately pitching the product, instead advocating for a conversational approach that involves asking questions to deeply understand the customer's needs. This approach helps in identifying whether the prospect is a good fit for the product and sets the stage for a more effective sales process.

15:03

💰 Pricing Strategy and the Importance of Valuation

Kuman addresses the challenge of pricing products, especially for startups. He suggests asking questions early in the sales process to gauge the customer's budget and the problem's cost to them. He advises against undervaluing the product and emphasizes that high prices can indicate a product's necessity and seriousness to the customer. Kuman also highlights the importance of providing materials that can help prospects justify the product's price internally within their organization.

20:04

📝 Closing the Deal and Navigating Procurement Processes

The script moves on to discuss the closing phase, which involves formal procurement processes in larger companies, including security, privacy, and legal reviews. Kuman warns founders not to be surprised by these processes and to be prepared for them by asking the right questions upfront. He stresses the importance of keeping the sales process moving quickly and leveraging the prospect, who has now become a champion for the product within their organization.

🚀 Implementation and Ensuring Customer Success

In the final paragraph, Kuman talks about the importance of implementation, cautioning against the misconception that it is solely the customer's responsibility. He shares experiences from Optimizely, where they learned to treat customer implementation as a high-priority project, managing it with detailed plans, clear ownership of tasks, and regular check-ins. Kuman emphasizes that the sales process is not complete until the customer is habitually using the product, and he encourages founders to learn from every attempt, viewing sales as a learnable skill that extends beyond customer acquisition to fundraising and hiring.

Keywords

💡Enterprise sales

Enterprise sales refers to the process of selling products or services to large organizations rather than individual consumers. In the video's context, the speaker emphasizes the importance of understanding and navigating the enterprise sales process for software startups. The script discusses various steps in the sales funnel specific to enterprise customers, such as prospecting and closing, which are critical for founders to master.

💡Sales funnel

A sales funnel is a visual representation of the journey that potential customers go through from the initial awareness of a product or service to the final decision to purchase. The video script outlines the successive steps in the sales funnel, including prospecting, outreach, qualification, pricing, closing, and implementation, which are essential for closing enterprise customers.

💡Prospecting

Prospecting in the sales context is the process of identifying and finding potential customers who may be interested in a product or service. The script mentions that the output of this step is a list of companies and specific humans within those companies who might need the product, illustrating the importance of having a clear hypothesis about the target market.

💡Outreach

Outreach in sales is the act of contacting potential customers to initiate a conversation about the product or service being offered. The video script provides tactical advice on how to effectively get the attention of prospects, emphasizing the importance of not just cold emailing, but also generating inbound demand and finding warm introductions.

💡Qualification

Qualification in sales is the process of determining whether a prospect has the need, budget, and authority to make a purchase. The script explains that the first call with a prospect is crucial for qualification, where the founder must ascertain whether the prospect is a good fit for the product and move towards scheduling a demo.

💡Product demo

A product demo is a presentation that showcases the features and benefits of a product to a potential customer. The video emphasizes that the purpose of a demo is not to show off the product's features but to demonstrate how it can solve the customer's specific problem, using a story-like approach and tailoring the demo to the prospect's needs.

💡Pricing

Pricing in the context of the video refers to determining the monetary value of a product or service offered to customers. The script discusses the challenges of setting prices for startups, suggesting that founders should ask questions to understand the customer's budget and treat each pricing conversation as a learning opportunity.

💡Closing

Closing is the final stage of the sales process where the salesperson attempts to secure a commitment for the purchase. The script describes closing as a series of actions from the customer's decision to buy to the actual purchase, including navigating procurement processes and legal reviews in enterprise settings.

💡Implementation

Implementation is the phase where the customer begins to use the purchased product or service. The video script highlights the common mistake of considering the sale complete once the contract is signed, stressing that the true end of the sales funnel is when the customer is habitually using the product, which requires active involvement from the seller in the implementation process.

💡Sales hypothesis

A sales hypothesis is a proposed explanation or assumption about the target customer and their needs that the product can address. The script uses the example of Optimizely's hypothesis that marketers at certain types of companies want to run A/B tests but can't due to coding requirements, illustrating how a clear hypothesis can guide the prospecting process.

💡Inbound demand

Inbound demand refers to the interest or need from potential customers that comes to the seller without the seller having to actively seek them out. The video script suggests generating inbound demand by launching early, creating technical content, and establishing oneself as an expert in forums, which can make the sales process more efficient.

💡Product Market Fit (PMF)

Product Market Fit is a term used to describe a situation where a product satisfies a significant need in the market and is able to attract and retain a user base. The script mentions that sales before finding PMF are fundamentally entrepreneurial and require vision and experimentation, which is different from sales after PMF is achieved.

Highlights

Pete Kuman, a YC partner and alumnus, shares a step-by-step guide on closing enterprise sales for software startups.

Sales is identified as a learnable skill and a top concern for early-stage startup founders.

Technical founders, despite their background, are capable and often successful in sales roles due to their expertise and conviction in their product.

The importance of having a sales hypothesis to guide the prospecting process is emphasized.

Tools like Builtwith can help identify potential customers using specific technologies, indicating a potential need for your product.

Generating inbound demand through early launches, technical content, and establishing expertise in forums is more efficient than cold outreach.

The value of warm introductions over cold emails for outreach, leveraging LinkedIn for shared connections.

Avoid the anti-pattern of talking to anyone available rather than focusing on qualified leads who are likely to become customers.

The first call with a prospect should focus on qualification, not selling, to understand if they have the problem, budget, and authority to purchase.

Sales is not adversarial; it's about understanding and solving the customer's problem, with great salespeople spending most of their time listening.

Delivering a product demo is about convincing the audience that you can solve their problem, not just showcasing features.

Personalizing demos with the prospect's data and context makes the demonstration more impactful and relevant.

Pricing strategies should be flexible and seen as an opportunity to learn from customer reactions; avoid undervaluing your product.

The importance of having detailed conversations about pricing early in the sales process to avoid surprises later.

Implementation is not just the customer's responsibility; founders must ensure their product is being used effectively post-sale.

Managing the implementation as a high-priority project, with a shared roadmap and regular check-ins, is crucial for customer success.

The sales funnel does not end with a signature but continues until the customer habitually uses the product, ensuring long-term success.

Peter Kazan's book 'Founding Sales' is recommended for founders looking to deepen their understanding of sales strategies.

The key takeaway is to start selling, learn from mistakes, and leverage sales skills beyond customer acquisition to fundraising and hiring.

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

optimiz 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 youd 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 off-the-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 emails 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 our 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

headed 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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