Archive for September, 2008

Successful exit built on the strength of Sales Process Optimization

September 26, 2008

This week another Altus Alliance client had a successful exit that was reported on Forbes.com. The following is an excerpt from the beginning of the article.

Media Recovery, a leading Datacenter products and services company, has acquired ISSI Data (www.issidata.com), a privately held company headquartered in the Seattle, Wash., area. ISSI Data is a recognized national reseller and direct marketer of information security and storage infrastructure solutions.

The acquisition of ISSI Data will enable Media Recovery to harness the power of a strong inside sales operation and an expanded online catalog sales business.

From the time that Altus partner Bill Lawler joined the firm we saw the opportunity to build a practice we refer to as our Sales Process Optimization practice that has a major effect on Inside Sales operations. ISSI was one of the first clients where we saw the impact of optimizing the sales process from lead generation through acquisition, development and retention of clients’ sales organization. As the examples at the aforementioned link demonstrate, optimizing the sales process can have a dramatic effect on revenue and profitability. We are thrilled that ISSI has had a successful exit particularly in the midst of a tougher climate for exits.

ISSI was a great example of how Altus engages with a client to tap into the breadth of Altus’ expertise. Dave Jones was the original partner helping with business development. During that time, he brought in Dave Chase for a day to tap his knowledge around Internet marketing and lead generation and again when Chase helped on a 6-week Sales Learning Curve Assessment project. Later the baton was handed off to Bill Lawler to address the areas identified in the assessment which manifested itself as one of the first Sales Process Optimization projects.

Originally, we thought of the Sales Process Optimization practice as strictly a complement to our Sales Learning Curve and Outsourced Business Development practices that would apply later in a company’s lifecycle as was the case with ISSI. Instead, we have found that startups at a much earlier stage in their development are interested in ensuring their end to end sales process is optimized from day one. For example, NextNewsNet is a digital media startup in the local Internet media arena that is applying the Sales Process Optimization methodology as it prepares to make its first sales call. NextNewsNet’s team and advisors are some of the most seasoned and well known people in the Internet media business who know driving down the cost of customer acquisition is vital from Day One. It’s much cheaper to get it right from the early days than reengineering later.

When is the time right for Renaissance vs. Coin-operated Sales?

September 19, 2008

The Wall Street Journal recently reported the news of sales executive Joanne Bradford joining Yahoo after a brief stint at Spot Runner reminded me of Mark Leslie’s commentary in his seminal paper on the Sales Learning Curve published in the Harvard Business Review. In that paper, he described three sales phases — Initiation, Transition & Execution — of a company’s market entry and the accompanying sales talent that fits with the phase. The sales talent needed at the Initiation phase is more akin to a Product Manager function than a pure sales role.

Joanne is one of the top two sales executives I’ve ever worked with. She was certainly what the doctor ordered when she came into Microsoft early this decade after a long tenure at Business Week when Microsoft was in the Execution phase. I have no doubt she’ll make a major impact at Yahoo as well. Not knowing what happened at Spot Runner, I can only speculate that it may have been a similar situation to countless sales reps and executives hired before into startup world with storied sales careers only to find it isn’t a fit at the startup phase of a company.

For a founder that isn’t steeped in Sales & Marketing, it is appealing to hire a Sales leader that fits the profile of someone who has many plaques on their office walls with etchings of “President’s Club” that speak to their sales success. However, these are executives that are accustomed to being surrounded with a well-defined market and product to meet that market. Further, they are used to the full complement of sales collateral, systems engineers, sales support, defined sales compensation model and the like common in the Execution Phase.

Unfortunately, as Leslie states “It’s both unrealistic and potentially dysfunctional to assign large sales quotas in the Initiation phase”. He goes on to say what their priorities ought to be. “The members of the sales team should be encouraged to focus instead on learning as much as they can about how customers will use the product.” The byproduct of hiring the former President’s Club member is frequently great frustration as the sales exec finds he or she can’t earn the money they expected as there are too many issues with the product and go-to-market strategy. He outlines what is needed at this phase as follows:

The types of skills needed during this phase differ from those needed to sell more mature products. They include a facility for communicating with many parts of the organization, a tolerance of ambiguity, a deep interest in the product technology, and a talent for bringing customers together with various functional teams within the company. Salespeople must be resourceful, able to develop their own sales models and collateral materials as needed. We think of this kind of person as the “renaissance rep.”

Later, in the Transition phase, sales management should focus on developing a repeatable sales model, refine market positioning and more. Leslie talks more about the type of sales rep needed at this point.

The original renaissance reps should continue to focus on learning. The people hired at this stage — we call them “enlightened reps” — should be comfortable contributing to a still-evolving sales model but do not need to have the analytical and communication skills of the renaissance reps.

At this point, the executive team should assess whether they are confident that they have sufficient traction and a proven, repeatable sales process. If they are confident, that is the time to rapidly scale the sales organization. Leslie expands on this…

In this phase, when the formula for success has been developed and all of the support requirements for sales reps are in place, the company needs more traditional salespeople — what’s known in the industry as “coin-operated reps” — who require nothing more than a territory, a sales plan, a price book, and marketing materials to bring in orders.

The common mistake of hiring a coin-operated team when a renaissance reps are needed is a costly and time-consuming mistake that delay success. Counter-intuitively, this “go slow” approach is the fastest way to achieve success.

Related Article: Altus Alliance Partner, Dave Chase, wrote an article entitled “Go Slow to Go Fast” on the Sales Learning Curve for the leading Internet Marketing site iMediaconnection.

Demo tips from a seasoned pro

September 5, 2008

Demos are vital for any startup whether you are trying to raise money or close a sale. Collected below are the insights of a veteran of demos — Jason Calacanis.

For the past 10 days I’ve sat through 200 company demos for the TechCrunch50 conference. These demos are mostly done over the phone for 10 minutes using the phone and web conferencing software like WebEx or Adobe’s wonderful new “Connect” service.

After doing 2,500 minutes of demos (40 hours) this year and many more last year for the conference, I’ve learned a lot about what makes for a great demo and what makes for a horrible demo. Since demoing your idea is a key to your success as an entrepreneur, I thought I would share everything I know in a few simple bullet points.

These tips are applicable to presenting in front of an investor, a partner as well as a demo style conference. Of course, every situation is different so consider these loose guidelines.

Background: The TechCrunch50 conference is taking places on September 8-10th in San Francisco and you can find more information here: www.techcrunch50.com. Mike Arrington of TechCrunch.com and I started the event last year as a place where fifty startup companies could launch their products without having to pay a fee (i.e. the incumbent conference called DEMO charges $18,500 to launch a startup company–that’s really low/abusive in my book). Google, Microsoft, Yahoo, Sequoia Capital and a bunch of other fine partners have joined us in hosting the event.

I have listed his tips below. If you want the full commentary, go to the article on Techcrunch where he expands on each tip.

1. Show your product within the first 60 seconds

2. The best products take less than five minutes to demo

3. Leave people wanting more.

4. Talk about what you’ve done, not what you’re going to do.

5. Understand your competitive landscape–current and historical.

6. Short answers are best.

7. PowerPoint bullet slides are death

8. How to use this new device called the phone.

9. How to handle questions you don’t know the answer to

10. Always confirm the time of your meeting/call, and always be 15 minutes early.

Jason went on with some more tips in Part Two. He set up Part Two before going into his additional tips.

Last week, I camped out at Sequoia Capital on Sand Hill Road and did rehearsals with most of the 50 companies that are presenting–in fact, launching–new products at the TechCrunch50 event next week. These 50 represent the top 5% of the companies that applied to our demo-style event. Truth be told, the top 150 companies were all qualified to be on stage–if only we could have a five day event with two tracks. -)

These are the best of the best, and most of them came into “first rehearsal” with a demo that I would rate a seven out of ten. (Yes, I’ve come up with a rating system for these presentations, but that’s another email).

Actor Ashton Kutcher did his rehearsal last week, and I have to say it was kind of ironic to be sitting there giving presenting advice to someone who’s been in, and created, a large number of movies and TV shows. As an actor, Ashton obviously has the ability to draw you in, but presenting a product in this format is a very, very specific skill. He picked it up quickly.

After coaching hundreds of folks over the past two years, I’ve developed 18 solid rules. You can see the first 10 rules over at TechCrunch, which reprinted the previous email with permission here. These extra eight are very detailed and speak to some deeper techniques for capturing people’s attention and transferring your enthusiasm for your product to them.

These eighteen rules are just a framework, and are based on demoing at a conference. However, the rules can apply, to various degrees, to presenting your product to investors, partners and potential employees.

11. Show Don’t Tell

12. Use inclusive words, live in the present

13. One driver, one navigator

14. How to handle technical issues

15. The Setup

16. Horrible ways to start your presentation:

17. Describe your product five times

18. Change up your style (i.e. shift your tone)