Why Startup Founders Can’t Outsource Their First B2B Sales
Many B2B startup founders try to outsource sales to “experts” very soon.
In a way, that’s understandable: If you have no IT background, you wouldn’t presume to tell your software engineer how to code your product. So why would you try to sell your product yourself if you have no experience in sales? The difference is: As a founder trying to get a B2B business off the ground, it is your responsibility to get customers to buy your product.
There are three reasons why a sales focus is essential for founders:
1. No sales = no startup
The survival chance of your startup depends on a pass-or-fail question: are there paying customers? Naturally, if your startup is just launching, you won’t have full-order books yet. In the early stages, it might also make sense to collaborate with your customers, in exchange for their investment in co-development or the data and access they are giving you.
At some point, though, there’s no way around it: You need a paying customer. Nothing else – not a great product, not an amazing team, not a pile of awards – is proof that you are on the right track. By definition, having someone who buys your stuff is the one necessary condition required to running a company. And to get companies to buy from you, you need sales.
Without founder sales, there’s no product discovery. And without product discovery, there’s no product/market fit. Alex Meyer, Co-Founder & Partner, 42CAP
2. The secret window into your customers’ brains
Without sales, there is no way to know what your customers actually think about your product.
As you are building your product, you want to make it as useful as possible for your future customers. But how do you know what is useful to them?
No matter how much you think you know about your customer (for example, from your own industry experience), you will only know the full picture if you enter into an actual conversation with them. And no conversation is as effective as a sales conversation – talk is cheap, but a sale is proof that you’ve struck a nerve.
This is an essential part of why sales is so important (and in our view: why it’s so much fun!) particularly in the early stages of your startup. The conversations and interactions you will have during the sales process will deliver key information that you can use to develop your product and technology. In the later stages, the information helps you with strategic planning, expanding and diversifying your growing company.
In B2B, there is no alternative to founder sales. Today, we have hundreds of employees and I’m still in on every OEM sale. Not because I want to micromanage it, but because I need to know what keeps the customer awake at night. Otherwise, I risk losing touch with the market. Gregor Stühler, Co-Founder & CEO, Scoutbee
3. Investors love startups who can sell
Without sales, it’s hard to gain the traction necessary to convince investors of financing your startup.
Like other investors, we have a long list of criteria such as team quality, market size and type, and product execution when we’re evaluating an investment in an early-stage startup. What we are looking for is proof that your startup has the potential for fast growth.
The one criterion that trumps all others is customer traction or – even better – revenue traction. If you can prove that you are successful in selling your product to paying customers, you are well on your way to a “yes” from investors.
Why you can do sales regardless of your background
Early sales is different because it’s all about establishing a continuous feedback loop between your business model, your product, and your customer. Like a spider in the web, only you are in the central position necessary to successfully sell in the beginning. Only later on will you need a sales organization to scale what you have begun.
Sales is such an essential area of your business. You can’t just hand it off to someone else. As a founder, you have to go through the process yourself to understand it. In the beginning, sales is a very entrepreneurial activity. How do you find someone with a need? How do you get their contacts? Bastian Nominacher, Co-Founder & Co-CEO, Celonis
If you’re like most startup founders, you will have no experience in sales from university or your previous career. You’re in good company: Like many founders who end up doing a lot of sales for their startup, we also did not start our careers in sales based on any sales-specific academic background.
We hadn’t even been especially eager to get into sales. In Europe, sales doesn’t always have the best image. At the very best, some salespeople are admired as “sales wizards” – natural charmers who can mystically woo customers into buying anything. But for the most part, “sales reps” are seen as annoying pests who see sales as a game of grit: if you just knock on enough doors, you can sell sand in a desert.
Only once we got into the field, we changed our view on the profession completely. That’s when we found out that reducing sales success to charm or grit, however, disregards one fundamental truth:
Salesmanship can be learned like any other discipline.
Over time and with experience, what appears like intuition reveals itself to be a logical result, based on established principles and truths. Sales is more math than magic.
Selling innovation to enterprise customers (business-to-business or B2B sales) is one of the toughest nuts for startup founders to crack. This text builds on the book Fast Forward: Accelerating B2B Sales for Startups. In their book, authors Matthias Hilpert, Investor, and Martin Giese, Business Angel and Startup Coach, share their insights from 40 years of operational experience and from interviews with 32 internationally successful founders from companies like Celonis, Northvolt, and Peakon.