It’s hard to get honest feedback. Hearing, “It’s interesting” is not really validating a product. There’s a scale of comments with or without value. Entrepreneurs need to judge if the feedback is valuable and stay skeptical. – Pete Koomen, Optimizely Co-Founder and CEO
Choosing a problem to solve is one of the most vital decisions your startup will make.
If you choose a weak problem, you’ll quickly find out when you try to sell, but unfortunately, the difference between an average and a significant problem is much harder to make out.
You might be able to build a successful business solving a lesser problem for your prospects, never quite realizing the amount of money you’re leaving on the table.
Prioritizing problems is an essential exercise. In the end, you might decide to pass up on a significant problem for lack of passion or interest, but at least you will have chosen a problem in full awareness.
Beyond scoring problems, there is no magic formula to help you select the problems your company wishes to solve.
You need to draw a line in the sand and decide which problems to address. Be mindful that intuition, passion and the entrepreneur fit should also play a role. Your team is a critical part of your business’s success.
You were able to turn a buying influence into a coach to help you identify the stakeholders and build a compelling product, but it doesn’t seem to lead anywhere.
Other business stakeholders seem skeptical of your assessment of the situation; they sing a very different tune from the one your coaching influence sings. They seem to be meeting with you more out of politeness than anything else. What’s happening?
It’s not uncommon for prospects to pretend they have more power, budget or influence than they actually do.
Maybe your coaching influence doesn’t have enough credibility with the other stakeholders or maybe she/he’s not in a position to influence anyone.
Keep your current coaching influence but develop stronger relationships with the other stakeholders. Get another coach on your side. Speak with the economic buyer. Figure out what’s really holding back the deal.
If you find out that your coaching influence has a bad reputation in the company, other stakeholders may resent working on anything that helps him out. If that’s the case, cut your ties with your coaching influence, take a step back and approach the company through another stakeholder.
Good entrepreneurs learn from their own mistakes. Great entrepreneurs learn from others’ mistakes. – Dave McClure, 500 Startups Founding Partner and Investor
There are reasons why nine out of ten B2B startups fail to find a profitable market.
And the great thing about starting a SaaS company in 2016, is that you don’t have to make the mistakes entrepreneurs have made before you.
Founders like Steve Blank, Eric Ries, Bill Aulet and Jason Cohen have written tons of valuable content on improving your odds of success as a founder.
It’s widely-available content yet… the causes of failure for B2B entrepreneurs are often very similar.
Here are the deadly sins I see time and time again:
- Implementing technology that requires too much change in the company;
- Implementing technology that changes too much the way people behave or work;
- Building technology that is too hard to use;
- Building technology that doesn’t deliver on the promise;
- Building technology that should be a feature of an established product, not a solution of its own;
- Selling technology that doesn’t have clear benefits and value;
- Selling technology that can’t avoid comparison to established players the prospects already know very well;
- Selling to anyone, anywhere, regardless of your ideal customer profile.
Don’t fail if you don’t have to. Find mentors, get the best methodology and remain honest with yourself.
You’ll already be ahead of the game if you do all this.
You don’t learn through sales calls, it’s not customer validation. – Jason Cohen, SmartBear Software Founder and CEO
Being too good of a salesperson can hurt your validation process.
Initially, learning and customer references should be prioritized over making money. You want prospects to honestly need and use your product.
Your plan is not to make money from the first clients. Money will be there later, so being generous with your early clients is an excellent idea.
It’s important for prospects to understand that you don’t have a product yet. You’re not just a regular vendor; you’re looking for a partnership more than just a sale.
You want to help them reach their objective, but in exchange, they must understand that you need to have product orders before anything gets built. That process must be clear.
Look, you have to understand that you’re getting in on the ground floor and for that, you’ll always be recognized as our first customer and I’ll always remember that. – Steve Smith, CakeMail Co-Founder
The worst thing you can do is to try to sell. You don’t know what your prospects want, you have no idea what the solution could be, and you don’t even know if the people you’re meeting are people you would like to sell to.
Find out what prospects really need to become clients.
With a good personal network, it is possible to ride relationships and land your first clients without really learning anything. However, riding relationships doesn’t lead to a scalable and repeatable model. At some point, even the best professional networks dry up.
Keep the sales tricks in your back pocket. Learn before selling if you truly want to build a business.
One of the reasons why I love B2B is that products with predictable and calculable ROI literally sell themselves. For a large company, buying a solution that saves $500,000 a month is a near no-brainer.
However, it’s not because your company helps save $6M a year that you can charge that amount. You have to align your pricing with the metrics businesses use and there’s only a part of the pie that you can get.
To overcome the “Status Quo Coefficient” and mitigate the risk of adopting new technology, your product should be at least two times faster, two times better and two times cheaper than the known alternatives.
Your solution must provide must-have value because, even if enterprise customers have good reasons to be unhappy with their technology vendors (due to lack of innovation, price gouging, poor support or other reasons), their daily activities run on those technologies.
You must reduce risk, provide exceptional value for each of your buying influencers and convince them of the urgency of fixing the problem. Risk — or the perception of risk — reduces the perceived value of your technology.
Convincing a company to change technology is hard. Training costs, inefficiency costs and risks must be factored in. For that reason, solutions that don’t disrupt business operations are the easiest to get adopted.
DJ Patil, Ex-VP of Product at RelateIQ (Acquired by Salesforce in 2014) coined the term “Zero Overhead Principle,” which states that no feature may add training costs to the user. Solutions that respect this principle are way easier to implement.
Put all the chances on your side. Increase perceived value and reduce risk to get a fair shot in the enterprise market.
If you’re small, admit that you’re small. You look small by acting big. People can see straight through that. – Chris Savage, Wistia Co-Founder and CEO
If you don’t have a PhD or haven’t been blogging on your target industry for the last five years, don’t worry; there are many other ways to build personal credibility.
Many types of accomplishments can be leveraged to gain credibility with prospects.
Perhaps you worked on major accounts or high-profile projects, perhaps you wrote a book or you’re an active member of the local community, or perhaps your contributions to open source are being used all over the internet.
Some of the entrepreneurs interviewed for the writing of Lean B2B are great examples to follow:
Ranjith Kumaran and Mehdi Ait Oufkir had built a very successful business together before starting PunchTab. The visibility of that startup, YouSendIt (now Hightail), gave them a lot of credibility with prospects.
Richard Aberman of WePay had traction in B2C before going B2B. His team capitalized on a high number of users. It proved that they could handle the scalability and usability of a product.
Laurent Maisonnave was a very active blogger and social media contributor before launching Seevibes, a social TV monitoring solution. Every single community manager working in television knew him or knew of him.
Ben Yoskovitz had been blogging about startups since 2006. In 2013, he co-wrote the book Lean Analytics. His thought leadership on startups and analytics now gives him instant credibility.
There are many ways to leverage your professional or extra-curricular accomplishments to establish credibility with prospects. It might require creativity, but you can always find an angle to give your startup great credibility.
Even if your product has a low startup fee — or if it’s completely free (freemium or free trial) — it has a cost.
Time is an investment. Training and implementation is always needed. Mobilizing a team to use a new solution is a risk.
The early risk for prospective buyers of a startup’s product is not financial; the career or reputation risk is more important. Managers put trust and credibility on the line to convince people to embrace a technology that might ultimately disappear.
Early prospects worry that your team is not going to perform or that the product might under-deliver. They want to be reassured that your solution will do what it’s expected to do.
Although the old adage in big business that nobody ever got fired for buying IBM was a creation of its marketing team, it holds some truth. No prospect will ever want to vouch for your solution at the cost of a promotion or, worst, a job.
Understand the strengths and weaknesses of your product and the implications of signing with you. Reduce the perception of risk, provide exceptional value and convince your buyer of the urgency of fixing the problem.
The last thing you want to sell is a career risk…