Sales Theory for Technical Founders

Sales is hard, period.

While we know that digital is the future of business and developers and engineers will remain in high demand, what is often understated is the need for quality sales talent in the technology industry. Founders of early stage startups know this to be true because, as Peter Thiel says, “look around, if you don’t see any salesmen, the salesman is you.”

The majority of tech founders take on a sales role themselves, and the biggest mistake they can make is not giving the process the respect it deserves. Gone are the days of the used car salesman who pushed lemons to unsuspecting customers; armed with Carfax reports, black book values and a thorough backlog of Google ratings for the dealer, you cannot “pull a fast one” if you tried.

The game used to be controlling information of the product and presenting it as better than competitors. It is now a process of curating relevance amid a sea of information and tailoring to your specific prospect’s needs. Prospects walk in knowing your competitors, their prices and that everybody “stands by their service”. In the new world where mechanical processes are being automated at an alarming rate, one of the last human value-added jobs left is sales.

For founders, you are in a fight and need revenue quickly, the quickest way to achieve it is to personally take on a full-time sales role. While you will necessarily fail and embarrass yourself many times, understand that getting results in sales is a learned process. Based on experience, I recommend reading the following three books in order, and then completing the prescribed exercise before every meeting you take to rapidly aid your progression into a competent salesman.

Many of this will seem painfully simple to a smart engineer type like you, but just understand, most of what works in life is simple but not easy. This is literally a matter of life or death, for your business.

  • Influence: The Psychology of Persuasion: Robert Cialdini

The absolute base level beginning of sales theory is to understand what universally causes humans to be susceptible to influence based on our genetic predispositions. Specifically, there are six universal principles that will lead someone to act on your recommendations. I will not list them here as this is a book everybody should read cover to cover. Berkshire Hathaway VP and all around very smart guy Charlie Munger considered this book essential reading for everyone, gave a wonderful speech at Stanfordbased on its research, and even awarded the author Robert Cialdini with a share of Berkshire Hathaway A stock for the “great service he has done for humanity”. That unit’s current value is $290,450.

  • Pitch Anything by Oren Klaff

Oren Klaff is a highly accomplished Investment Banker who attributes his great success to his ability to successfully pitch investors a deal by cutting through the noise and getting their attention. The human brain is evolved over millions of years such that we do not engage the smart and actively thinking part of our brain (neocortex) until after we have satisfied more base level, reactive parts of our brain (midbrain and crocodile brain). The crocodile brain, as he refers to it, needs to be satisfied before any higher-level thinking occurs (fight or flight – do I trust this person?). Followed by the mid brain social functions (do I like this person? Are they credible?). Finally, a person may be ready to engage in the “nuts and bolts” of your pitch, but most likely that is take home work for due diligence.

Many salesmen skip the steps and thus their well thought out plans and data are rejected by the defensive crocodile brain of their prospect. Read this book to understand the layers you have to advance through in order to even have your pitch heard, and you will greatly increase your chances of a positive outcome.

  • The Challenger Sale by Matthew Dixon, Brent Adamson

Many people think that being friendly, polite and willing to “bend over backwards” is the key to winning customers. This is undoubtedly true, but very misconstrued out in the marketplace. You will find out in the world that many people can like you as a person and see all the logical benefits of what you are pitching but that will not be enough to act. This book will teach you that to win someone to your idea or product you have to challenge their current thinking in a shocking manner.

We see this in everyday life, for a host of reasons people procrastinate or simply don’t do what they know they should. This book by no means advocates being annoying or pushy, but rather teaches those who are naturally polite and non-confrontational how to deliver their message in a way that promotes action.

Homework:

As mentioned, this is painfully simple, but sometimes simple just works. I write three headings on a piece of paper and fill them out before every meeting I go to. They are structured so that you are following a narrative that is pleasing to the person that you are talking to and making sure your key points get across by solidifying them in your mind. The three headings are as follows:

Warm it up: You want to establish rapport as quickly as possible. Do you know the same people? Do you have common interest? In many cases you are making an educated guess about what this person’s personality is like and what you two can relate on. Stay in this mode as long as they want to, until they bring up your pitch. You have now earned their attention.

Present Problem: What is wrong currently with what they are doing? You need to create tension here. You are there for a purpose which is to make them understand the severity of not acting on this problem. If you don’t have an answer here, you don’t have a pitch.

Offer solution: Present succinctly how you will take care of the problem with confidence. Establish expertise and show that you are capable of solving their problem through experience. If you can’t do this, again, you don’t have a pitch.

After you understand the base theory of the sales process and have a good habit of creating a narrative that people can follow easily, the rest is attitude. Rejection is painful and it gets to everybody. Knowing that everybody goes through this (and that your competitors are probably quitting when the going gets too tough) helps push you through some lean months.

All of your business dreams are on the other side of a tough early sales process, I hope to see you there soon.

Attitude Bonus: See these influencers for motivation and discipline training

Instagram: @edmylett, @grantcardone, @garyvaynerchuk

Podcast: The MFCEO project with Andy Frisella (warning: language!)

Books: Zig Ziglar or Tony Robbins

Employee Benefits for Startups

If you are a start up founder beginning to hire beyond your original team, you know my next statement to be true: there is a war for tech talent in Canada.

Our government has come through on its promise to invest in innovation. As a result, we have become a magnet for skilled workers coming from overseas or up from the States. Software engineers and developers demand recruiting and retention strategies amid a sea of competition. How can early stage start ups stand out with a limited budget?

While each situation is unique, I have observed a noticible pattern: around your third to sixth hire you will likely have your eye on a candidate with experience at a large firm. This is often the time when your recruitment strategy switches gears towards providing a sense of stability to non-equity employees, particularly those who are older with families. A benefits plan will make sense at this point, and will be a great supplement to your compensation plan going forward. 

Early hiring can be difficult on a bootstrap budget. When implementing your benefits plan, like everything in a startup, you have to be strategic and resourceful.  Below are a few practical tips for avoiding the pitfalls of start up compensation strategy and ensuring the package you offer has legs to grow.

THE MOST COMMON “INTRODUCTORY” PLAN DESIGN

This can be a hard answer to get from an insurance broker as it is necessarily an iterative process to arrive at the design you want. However, in an effort to provide some value up front, this is what we most often see:

  • Extended Health Insurance: 80% covered for prescriptions and paramedical. Maximum of $300 per personal per paramedical practicioner (massage, physio, chiropractor etc.)
  • Dental Insurance: 80% covered for routine cleanings, checkups and basic procedures to a maximum of $1000 per employee per year
  • Life Insurance: Flat $50,000 and matching Accidental Death and Dismemberment
  • Vision Care: This depends whether it matters to your team, it is inexpensive to add later.
  • Disability Insurance: Most do not include this on an introductory plan, especially if the group is young. Disability is a bit more custom and requires information about occupations and salaries. We highly recommend adding it as soon as your budget allows.

OR

  • Health Spending Account/ Wellness Account: Great option for cost containment, but 100% employer paid. Although it works best as a supplement to traditional insurance, when budget is an issue and the group is young, it can make sense to allocate a large portion of the funds to an HSA/Wellness Account.

MOVING PRICE TARGET

It is important to note that benefit plans renew once a year and your renewal price is tied to the company’s specific usage level. This operates much like car insurance; if they pay out more in claims than they have taken in premiums they will request an increase. Claims are often higher than expected. Here are a few potential surprises, and how to prevent them:

  1. Everyone starts off by overusing the plan: Particularly with an employee base where many have never had a plan before, they will use it just because they can. A simple explanation of how the price increases work can help curb this behaviour, and is often overlooked by founders until it is too late.
  2. You want to ensure you have stops in place that will prevent overuse. This can come from a deductible or simply cost splitting the plan with employees. You can institute a percentage coverage (as opposed to covering the full bill) and impose annual maximums. Once you have an idea of how your group will claim, then you enhance the coverage.

PITFALLS TO AVOID

DO communicate with the team about what you are putting in place and why. You need to achieve employee buy-in and cooperation on the plan, or else it will be a deduction from their paycheque that they resent right next to taxes.

DO monitor usage consistently. We check in every 3, 6 and 9 months to ensure claims are reasonable and offer changes to course correct.

DON’T rush into a top of the line package. Start small and grow steadily to ensure you never have to “pull back” on benefits employees were counting on. I have delivered notice to teams that had their benefits cancelled; those are the days I want to forget.

An introductory plan is exciting for your start up because it unofficially signals that your team is growing into a cohesive unit. With some common sense maintenance, you can make sure you are attracting top talent for years to come.

If you would like more detailed advice on your own benefits package, please reach out to us or use our online quoting tool built for small teams to quote, collaborate and apply for insurance online. 

The Start Up Guide to Building a Great Company Culture – Part One

“Culture eats strategy for breakfast” Peter Drucker

What is Culture?

Many of us have held entry level positions in the past. Can you recall your level of engagement with work at the time? Do you recall commiserating with other employees at lunch break? Complaining about management? Parodying the hollow corporate initiatives that were foisted upon you?

In a start-up with a close-knit early team, everyone is all-in. By necessity you must believe in the mission to take a risky job with a significant pay cut and no guarantee of success. Generally, the entire early team has equity in the company. Engagement is not an issue at this stage in your development.
However, as a business grows, people become more detached from the mission. Processes become more rigid, employees with less autonomy are hired, people don’t have skin in the game. If you are lucky enough to experience major growth, you may find employees wind up detached and cynical as well

Much is said about the importance of having a strong company culture, but how do you build one with intention from the ground up – and maintain it through periods of growth?

First you must decide on your core values, which form the DNA of your company. These must be fundamental and specific to your group. Processes, markets and even products may change over time – but “putting the customer first”, for example, will not. 

Then you must work to live these values everyday. They will be consulted when ever faced with a decision, and the leaders of the company must be their strongest proponents. They must set the example. 

Below are several strategies used to maintain a strong culture by some of the elite companies in the world. These can serve as goals and guideposts for a growing startup in the hiring stage. 

Hire like your life depends on it (because it does)

Case study:

airbnb

If a culture is the shared beliefs, values and ethics of a group of people, then certainly the most important step towards creating a great culture is to select a great group of people. You must take great care selecting your early hires as they will be the ones hiring the next generation of employees. This trickle down effect can work greatly in your favour, or terribly against it.

An extreme example of rigorous early hiring is Airbnb – led by the culture obsessed CEO Brian Chesky. Here is how he approached their very first non-founder hire:

Chesky combed through thousands of applications. He spoke with hundreds of applicants. After four grueling months, they finally found their guy.
Why did Chesky spend so much time hiring a single engineer?
“I think bringing in your first engineer is like bringing in a DNA chip to the company,” Chesky said in a speech given at Stanford in 2014. “If we [were going to be] successful, there were going to be a thousand people just like him or her in that company. It still wasn’t a matter of getting somebody to build the next three features we need to ship for users. There was something much more long-term and much more enduring which was, ‘Do I want to work with one hundred thousand more people like this?’”

https://inside.6q.io/the-importance-of-company-culture-at-airbnb/

The temptation to hire fast and cheap is alluring as you scale, but companies that last know that early hires have a trickle down effect – and thus are the most important decision you can make for long term impact of your company.

Airbnb core values: 

  1. Champion the mission
  2. Be a host
  3. Embrace the adventure
  4. Be a cereal entrepreneur (be sure to read about Airbnb’s early funding strategy, making politically themed cereal boxes)

Source: https://careers.airbnb.com/

A tremendous talk on culture from Brian Chesky here, make sure to check out 30:00 for an example of when values guided Airbnb through a time of crisis:

Keep that same Energy

Case Study: 

Working at a startup is a marathon, not a sprint. The early team is highly susceptible to mental health issues and burnout due to risk, isolation and work level. Thus it is important to make sure you put measures in place to make sure your team is taking good care of their health to be able to operate at a high level for the long term. 

Salesforce lives this idea with an initiative they have called Camp Pono, a wellness philosophy based on the Hawaiian tradition of living in balance. The core tenets are: Nourish, Revive, Move and Thrive – which led them to implement a great employee wellness package:

  • $100 a month for wellness – all employees are encouraged to spend this money on things like a gym membership, meditation app, massage or cooking class.
  • Sleepio – After a slew of recent research on the detrimental effects of a lack of sleep, Salesforce sponsored an app that applies Cognitive Behavioural Therapy to improve employee’s sleep rituals and patterns. 
  • Mindfulness Zones – Every Salesforce office is equipped with a room where employees are encouraged to meditate to help reduce stress and reactiveness and make decisions from a relaxed state of clarity..
  • Wellbeing HQ – an area installed onsite in many Salesforce offices, where fitness and cooking classes are hosted, meetings with a dietician, massage and personal training services are all at an employee’s disposal.

Salesforce core values:

  1. Trust
  2. Customer Success
  3. Innovation
  4. Giving Back
  5. Equality
  6. Wellness
  7. Transparency
  8. Fun

Investing in your employee’s health has traditionally been considered a daunting expense (we can’t have people meditating all day!). But armed with a strong set of core values that you have carefully hired for, you can expect a strong ROI on this investment. 

Sources:

https://www.salesforce.com/blog/2016/03/best-place-to-work-salesforce-2016.html

Design for your desired outcome

Case Study:

A pioneer of innovative company culture, Google maintains a data driven process towards making employees as happy and productive as possible. Not only in organizational design, this extends to the physical design of their office. 

At Google there is a designated team called “People Analytics” which exists to observe employee social/ cooperative patterns at the office and drive better outcomes. Their work has lead to some very interesting insights and opportunities to improve efficiency:

Lunch Lines: You know by now that Google offers free meals and snacks to all of its employees. So what’s the optimal lunch line? At what point is it too long where people waste time and too short where people don’t get to meet anyone new? What’s the prime happy medium? According to Google it’s about three to four minutes. Any longer and they may waste time, any shorter and they don’t get to meet new people.

Lunch Tables: If you want employees to meet each other, make the tables long. This will expose them to more people who they can get to know.

Diner Booths vs. Conference Rooms: Laszlo [Bock] and his team have found that dinner booths work better than conference rooms for facilitating creativity. David Radcliffe, the man in charge of creating the perfect work environment, says that:

“Casual collisions are what we try and create in the work environment. You can’t schedule innovation, you can’t schedule idea generation and so when we think our facilities around the world we’re really looking for little opportunities for engineers or for creative people to come together.”

For Google, these “casual collisions” make for innovation opportunities. For another company, remote work may be more productive. Optimal design is subjective to each company, but careful thought about the outcomes you want to create and subsequent data collection will allow you to find what is right for you. 

Google core values: 

  1. Focus on the user and all else will follow.
  2. It’s best to do one thing really, really well.
  3. Fast is better than slow.
  4. Democracy on the web works.
  5. You don’t need to be at your desk to need an answer.
  6. You can make money without doing evil.
  7. There’s always more information out there.
  8. The need for information crosses all borders.
  9. You can be serious without a suit.
  10. Great just isn’t good enough.

Sources:https://neilpatel.com/blog/googles-culture-of-success/

https://slate.com/technology/2013/01/google-people-operations-the-secrets-of-the-worlds-most-scientific-human-resources-department.html

https://www.google.com/about/philosophy.html

When thinking about the core values of your own company, ask yourself the following questions:

  • What is our vision for the future of our business? How clear and convincing is it?
  • What makes us who we are? 
  • Who do we buy from and why?
  • What about our business could be different in 5 years? 10 years?
  • What values do we want to remain the same, forever?

When you have a strong conviction about who you are and where you are going, you can proudly work to live your values – for the long term.

This is the kind of culture that will build a successful team for any company.