Sales rocks!!

In a startup sales is the only thing that matters!! I like this statement:

“In the early-stage days, building top line revenues becomes a nonstop adventure for the CEO; no other marketing plan should be considered. In essence, sales begin with a sales force of one. It is up to the CEO to get on the road and to flush out discrepancies in the business and revenue models. No amount of marketing planning experts back at the desk can possibly conceive what the CEO will discover on the road…. It is the CEO who needs to go out in the field, press flesh, and be the one person responsible for driving like hell to get the numbers up. This task cannot be assigned, cannot be outsourced, and cannot be buried deep in elaborate marketing plans”. Robert W Price of the Global Entrepreneurship Institute in ‘What is a sale crusader? Do we need sales reps?’

Startups know this already – In Stephan Schmidt developers blog post ‘6 reasons why my VC funded startup did fail’, the first three reason given are “We didn’t sell anything”. The lessons keep on coming – “Traction is the only thing that matters”, from Rich Aberman post “5 things I “knew” (or should have known) before starting a company, but didn’t fully understand until now”. Time and time again I hear founders say ‘the product should sell itself..’, and it needs to but no one is listening, no matter how great the product is. “More startups fail from a lack of customers, than a failure of product development”, Steve Blank

We already know the answer to getting sales. “The Lean Startup Entrepreneur looks like a combination of salesman and scientist.”, Kevin Dewalt describes this as:

1. Curious – an interest in discovering problems and solutions
2. A Listener – Sales is about understanding customer needs
3. Skeptical – Start with hypotheses of customer needs and search for evidence
4. Risk Averse – Risk can’t be eliminated but placing smart bets can mitigate it.
5. And …optimism, determination, and intelligence to succeed in anything

Good old  Dharmesh Shah (On Startups) even gives us the tip on how to build a startup sales team. So, why do people still fail to sell in startups… Sales isn’t easy:

1. Rejection – Sales involves lots of rejection. And of course most of us don’t like to be abruptly rejected, over and over again.
2. Expense – Selling is not cheap. It takes many events, connections and calls to start the sales process. Then a sale requires expensive meetings, which often have to be repeated.
3. Time – Sales take time. The average sale takes six communications before the sale is made. You have to patient and persistent.
4. Belief – Money drives salespeople. However in a startup there is no money. The founders have to rely on their faith and belief in their product/service.
5. Focus – Its much easier to work on a business plan, a marketing plan or develop some code. However there is no escaping the necessity for sales revenues (whether freemium or not!).

There is no choice in a startup, the founders have to be a the fore front of sales and  all staff also have to sell. In a startup you are all selling for survival!! I’ll finish with a concluding quote from Robert W Price post: “Marketing Starts with a Crusader who can lead in the tough times, who can fight the odds and win. They are willing to lay their lives on the line”, Marketing High Technology: An Insider’s View, William H. Davidow

People still buy from People

The marketing, sales and PR mix has been rapidly changing over the last few years. Today, customers are hearing about and evaluating suppliers in different ways. With so many channels the traditional marketing techniques such as TV advertising are no longer working so well. The growth and ease of the Internet has meant there’s less of a need for sales people. Or at least a need for a different kind of sales person and PR message, using social media to get to know customers.

Would you Trust Him? (Danny Devito in the Roald Dahl movie Matilda, 1996)

However, even in this brave new on-line world, the old adage ‘people buy from people’ remains true. Customers want to like who they are buying from and feel that they can trust them. “People ultimately judge only one thing about you: the way the engagement makes them feel”. – Seth Godin. “People don’t buy for logical reasons. They buy for emotional reasons”. The challenge is trust is not quick and easy to gain and it cannot simply be bought.

Customers are no longer listening to the megaphone PR and marketing approach. They now prefer to research themselves and share advice with each other. PR and marketing now pays an increasingly important role as a salesperson. More than ever before PR and marketing has to develop that all important trust. However, how do you trust in a faceless message and person you don’t know.

Blogs and micro-blogging now brings a new way to understand and get to know someone. But it has to be real!! A website has to pre-sell and become a friend.  The question is: how can you trust a blogger or a company website/blog? From all that I’ve leant to become trusted, a blogger needs to be consistent, open, professional and show integrity. Honest as Seth Godin says. The only way is to be real on-line! The draw back with social media is that it takes lots of time and persistence to build social capital (as discussed by Ryan Carson). But then sales take time too – with 8% of sales people get 80 per cent of the sales because they are persistent!

However, I believe for the individual and company to gain credibility, reference points also need to come from other trusted sources. This still relies on traditional channels including independent editorial reviews, peer reviews, customer endorsements, etc. These references remain powerful in an increasingly online world because they are persistent and can be found and discovered by the new clients rather than pushed at them.

People do still buy from people but the process is changing. Blogs, mico-blogging (Twitter) and video’s bring a personal touch to marketing and PR interaction but conversations have to come from the heart. Recent case studies are now showing that Social Media Is The Major Contributor To Lead Generation. So, if you want and need sales as most of our companies do – get blogging, tweeting, videoing right now!!

Going for Business & Tech Awards

There’s lots of local, regional and international Business /Tech awards around (Ernst & Young, Red Herring, TechCrunch50, UK IT Industry Awards, etc). Some cost alot to enter and some only a little. But are they worth winning? And how do you win ’em..

If you not heard my startup Aware Monitoring is through to the final of a local Award competition – Nottingham Post New Enterprise of the Year 2010 Award. We’ll know this week if we’ve won.

Simon & I in the papers (click here for full article)
Source: Nottingham Post & Nottingham University Business School

I recently met David Atherton, the founder of Dabs.com, an ecommerce IT retailer. Dabs  went for a whooping 800 awards and won 200 of them! Dave said ‘they were a great low-cost form of PR and marketing.’ Most people I’ve spoken to who’ve won awards say they are worth winning because they bring:

1. Immediate press attention – The awards organisers and sponsors tend to promote the finalists and winners to the press. Its great free PR.
2. Knock-on press attention – Other publications will take attention if your company wins an award. They’ll want to write about you too!
3. Confidence – The feel good factor is extremely valuable for the founders and  employees moral. Everyone is recognised for  their hard efforts.
4. Success – Everyone wants to be a success. To be finalist or a winner shows your company is succesful, even if it’s not aways the case.
5. Credibility – Prospects and customers want to feel they can trust their suppliers. Awards seems to bring confidence in companies.

In a talk by Doug Ashby he felt that the Awards got in the way of selling to prospects and customers. Doug has won several awards before exciting well from his Mainframe hardware maintenance business. Doug felt the awards bloated the winners ego to the extent where they take their eye (focus) of their business.

A friend of mine, Adam Harris, won the IoD (Institute of Directors) Entrepreneur of the Year Award in 2008. Adam said ‘that you have to put the time and effort into the application to win.’ Sounds obvious, but Adam said ‘most people leave completing the application until the last-minute and rush it.’ Like an important proposal  take your time and get the  applications right. Of course, you need a great story, a business with some strong successes and good writing skills to be noticed.

I took Dave & Adam’s advice and we’re through to  a local award final. Whether we win and it then goes to our heads (ego) is yet to be seen 😉

UPDATE:

We won! Amazing!! It was a truly fantastic evening. We did well to win our category against stiff competition. For our ‘Aware Monitoring wins Award’ company post on the win, click here and for the full Nottingham Post write-up click here.

Innovation sucks!!

Innovation is extremely alluring to companies and startups. It offers so much potential. However innovation  takes mountains of time. You just can’t come up with a Facebook, Dyson or Ford in 5 minutes!! It’s simply not a light bulb moment. It can take 1000’s of  attempts. “I have not failed. I’ve just found 1000 ways that won’t work” – Thomas A Edison. Innovation is a gradual internal company and external market process.  This makes innovation very frustrating for the entrepreneur because the one thing they have in short supply is time! Innovation is awesome but it also sucks!!

Innovation has to build-up momentum and be developed over several or many iterations. This evolution of ideas can be within the same team, company or marketplace. It can even be ideas shared between different markets or countries. That’s the great thing about our modern economy, its survival of the fittest ideas. The key to unlock innovation is for the idea to be at the right time and in the right place.

I’m sorry, but time and time again I hear startups saving we are the next Facebook, Twitter, etc. In reality you need to know where are you in the innovation cycle – that ranges from innovation to commoditisation. Geoff Moore ‘Crossing the chasm’ is always a good book to read on this subject. The position in this innovation cycle dictates your actions, growth and timescales.

The challenge with innovation is that it takes eduction, thus the need for time. The educating of potential customers is difficult because people don’t really like change and risk. Companies, especially big ones, definitely don’t like change and risk. Education costs an awful lot of money whether with mass market consumer items or niche corporate b2b products. The marketing message needs repeating over and over and over again. First mover advantage is great but second mover can be better. Just look at Google (2nd to market) and Yahoo (1st to market) and who came of on top.

The trick is to get into a market niche on an upward curve, get running with the pack (competition) and then gradually innovate. As always it is easier to say than do!! Apple is a great example. The success they enjoy today with the iPhone popularity goes way back to 1993 with the failure of the Apple Newton. Apples’ iTunes which is intrinsically linked to the iPod and therefore the iPhone originally benefited from the downfall of Napster. These innovations have been brewing for many years and between many competitors.

The great thing about innovation is that it has unlimited possibilities. It’s brings the combination of creativity and exciting growth potential. Innovation is awesome but it takes time, money, careful listening to the market and mountains of persistence. One hit innovation wonders are rare and not the norm. All of this can be frustrating for startups because no one is in a rush except the startup and the one things startups are most short of is time.

Startups: Obsessing about your competition

Competition is a good thing. It’s shows there’s a market and “it keeps you on your toes”. However its very easy to become completely obsessed with your competition. An obsession, particularly one which dominates your thinking, is never a good thing. It ends up wasting time, energy and is very frustrating. The thing really to focus energy on is understanding and adapting to your target customer needs.

Its so easy for startups to become completely obsessed with many aspects of the their competition:

1. Price – Since the Web everyone can see each others published pricing. There’s pressure to be cheaper than your competitors because customers can so easily compare  suppliers. Remember customers don’t just buy on price.
2. Features – The Web has also made it simple to compare suppliers features. You can become obsessed with needing every feature your competitor has. It’s so easy to forget the customer when focusing on competitors. Understand which features customers really value.
3. Size – How many customers do they have, what is their market share, what are their revenues, etc. Becoming obsessed with competitor size is very destructive. It leads to land grab at any cost.  Remember the saying “volumes are vanity and profit is sanity.”
4. Buzz – Being obsessed with your competition means your always waiting and watching for every piece of press on them. Great press coverage is important  but its the customers perceptions that really counts. Lots of press noise does not necessary mean lots of happy customers.
5. Location – Over and over I hear people obsessing about location. They constantly compare the benefits of being is a different location. Usually one they’re not in. Don’t get me wrong location is important but getting hung-up over it is no help. Customers are everywhere. Focus on them.

Our startup has got more competition than you can shake a stick at! However it is vital we have competition. They validate the market need and help to grow the overall market sector through a courus of marketing messages. Competitors give a startup a known quantity to position a product against with customers i.e. ‘it’s like…’ They also bring a measure to set yourself against.

However becoming obsessed with your competition is counter productive. Forgetting about them is not a good idea either. They may start addressing a customer need which takes away your customers. In reality it is unlikely  your competition which will kill your startup. There are lots of other challenges that will do that, especially not understanding adapting to your customer needs.

Do-It-Yourself startup PR

Even with today’s social media channels such as blogs, Facebook, Twitter, etc Press Releases remain a popular  form of communication.  PR for a startup is about establishing a new reputation and trying to get people talking about you and your product. However the press are a fickle bunch and tricky to deal with. Getting a mention in a press article or story can be very valuable and worth the effort trying.

We launch our new website monitoring app to the world live on stage next week! I’ve discussed how to launch a web app before. As a bootstrapping startup we’ve needed to keep costs down. I wanted to get a PR freelancer in to help with the launch however cash is becoming increasingly tighter and so we’re running the PR ourselves.

The press are notoriously difficult to get hold of and engage with, however there is a small chance your message may get through. Doing the PR yourself has it positives. The founder’s know the product and are more passionate than anyone else.  Guy Kawasaki is positive about going it alone PR. Here’s a guide to developing and managing a startup Do-It-Yourself PR launch plan:

1. Target audience – Be clear in your own mind who they are and be certain you know where they hang-out i.e. what sites they visit and which blogs, newspapers do they read.
2. Key messages – Decide what they are. Some of this comes back to your marketing straplines and what the company/product stands for.
3. Target press list – Who are you going to contact and what are their contact details. Find out what  excites and interests these journalists.
4. Story – Develop a story that the press maybe interested in. It could be feel good, topical or a current trend. Above all the message needs to show how you are different from your competitors. Find good example press releases and learn how to write one. Here’s a useful article on writing press releases: ‘How to: write the perfect press release for journalists’.
5. Press release – Draft up a press release based on the key messages. Also make sure you have a news and resource page on your website/blog including a range of screenshots and logo’s. Then send out your story.
6. Pitch – Next get on the phone like crazy and pitch the hell out of your story to the press contacts. Entrepreneurial determination makes the difference here.
7. Targets – Set some targets for your PR campaign. That way you keep focused and motivated.

Chris Lee, a PR freelancer for startups, has some further advice on managing your own PR.

Timing is also an extremely important factor. Everything including your message and press release needs to be prepared the week before your launch and press contact made during the launch week. Good luck. Your message may get through.. The press are tricky to deal with, however if you don’t try you never know. Remember “Who dares wins” 😉

What the heck is startup brand identity?

We’ve been thinking about startup branding for a while. I recently touched on branding when I posted ‘Do startups really need branding straplines?’ and concluded that top level marketing straplines embody the vision of the startup. This brings clarity of purpose, consistency of understanding and direction. It seems to me that ‘brand identity‘ is a vague and fluffy term.  However branding is not just for the big boys. It’s also great for startups. Brand identity helps brings credibility to a startups customer, investor and partner relationships.

“It’s the Real Thing“

Startup branding certainly isn’t anything like coca-cola with their big budget corporate brand personality. However  both big company and startup branding is about personality. Branding is very, very, very important for the big companies. It’s worth an awful lot to these giants. It is also really important for tiny little startups like our new web monitoring service. Branding sends out a consistent recurring and reliable message of what the company and product stands for. Customers love consistency. They want to know what they are going to get and they will be satisfied. This builds brand and product/service trust.

In a startup brand personality means the founder’s personalities. Like it or not its about  the founders character’s!  The startup is a reflection  the founders values, beliefs and the way they behave. Startups have the ability to be much more human and friendly than the big faceless corporations. This means startups can use their founders personalities to their advantage. They can be so much more human, personal and engaging.  This is particularly effective in the new world of social media. However startup founders need to have a clear message on what they stand for and who is their the target audience. The founders also have to live and breath the brand for it to be real.

My friend Aaron Fulkerson, the CEO of MindTouch, has taken branding
to the extreme by tattooing the company logo on his leg!!

Most business relationships, whether B2B or B2C, are based upon trust. Potential customers need to know that a supplier will deliver on their promises and they will be around in the future. The challenge for startups is  that branding and trust takes time to build up.  If the founder chops and changes  messages or brand personality too much this trust will not buildup. It takes patience and persistence on a single course to buildup branding identity. This is what makes it so valuable for both the big companies and startups alike.

7 ways to price SaaS and Web Apps

With Web 2.0 Ad funded sites going out of fashion subscription based services are on the rise. Setting the right pricing for your SaaS and Web App service is a difficult decision. It is also a critical choice. Get it wrong with high prices and you could be losing out on sales. Running with very low prices may result in too many low profit customers.  The secret is in knowing your customers and competition.

“Haggle properly!” (Life of Brian)

The seven ways to price SaaS and Web Apps:

1. Cost Plus – Conventional wisdom says price on variable sales costs. However this is more of a resell/retail approach. Operational costs per  additional SaaS/Web app customer tends to be very low. It’s the customer acquisition and developing new features that requires the high investments.
2. Match the Competition – Don’t worry about the costs. Price the service the same as your competitors and move their customers across to your service.  Unfortunately this strategy offers limited differentiation and thus customers won’t move. If you don’t have any competitors check that there is a market in the gap.
3. Undercut the Competition – Start a price war and storm the market! This may grab the attention of some budget conscious customers. Unfortunately if it does work the impact does not last long.  This strategy also leaves less money for acquiring new customers and future product developments.
4. Price Higher than Competitors – If your service is very similar to your direct competitors charge slightly more than them. Then focus on being a quality service. However you’ll have do something much better than your competitor. Find a feature or service level that the customer really values and your competitor is weak at.
5. Differentiate – Build a very different feature set and charge much more than your competitors. The challenge is you’ve got to have an outstanding service that fits a need. Your business message also needs to be very strong to justify the higher price.
6. Hide Your Prices – Many modern SaaS services such as  TactileCRM and Freshbooks, etc publish all their prices. Some, like  Echosign, have a salesforce to sell the service. Others let the service sell itself. If you don’t publish your pricing your salespeople can upsell  the service levels when the customer comes calling. Pricing is often hidden this way in the corporate world of software.
7. Segment – Offer several service level to suite different customer types. Huddle and DNS Made Easy offer and range of service levels for small businesses and corporate customers. The pricing on these service levels varies a great deal.

Like I said it’s not easy. A mixture of the above pricing strategies may be the  answer. A lot of the decision relies on knowing the market well i.e. the customers and the competitors. Choose a price strategy early on, test the market, and be flexible. A word of warning: it’s much easier to decrease prices than to increase them. Good luck!

Pitching 2.0+ : A clear, concise & complete message

It’s not as easy as you think getting your pitch/message down to a few very clear and concise words. I’m pitching our website monitoring startup again. This Pitch is part of a national Pitch competition. Click the links to see my last pitches: Understanding Pitching and Learning to Pitch. We’ve been short listed based on our application form. All the hard work we’ve been putting into our Website messaging is really starting to come through. Our message must be improving.

Churchill. Good with words.

Like a marketing strapline a pitch needs to be boiled down to a very few key words. It says what your company does and what you stand for. This message is then developed into longer pitches to include more and more detail as required. 3 second, 30 second, 3 minute pitches, etc. Its a bit like a pyramid of descriptions with the shortest and simplest pitch at the top. This structure brings consistency and clarity. Ultimately the culture of a startup is formed around the principle messages and values formed by the founders. In this way employees, customers and investors understand what your company stands for.

How we get on today at The Pitch competition is important but its not critical. Its the journey that’s the useful part. Improving, testing and refining our message is the reason to pitch. Although the £50,000 worth of prizes would be nice. This practice is preparing us and our message for potential customers. After all The Pitch panel will not be buying our product, customers will. Keep pitching – practice makes perfect 😉

5 ways to Launch a new Web/SaaS App

Here at Aware Monitoring HQ we’re moving rapidly towards launching our website monitoring service.  But what is the best and most effective way to launch a web/SaaS app. I’ve trawled through the Internet and talked to several of my startup friends for ideas. To get some practical launch hints and tips my co-founder Simon Oxley and I met-up with the founders of one of the UK’s and worlds top 50 startups – Huddle.net.

Huddle started providing on-line shared workspaces in 2006 and launched in 2007. Since then they’ve attracted 100,000’s of users, secured two rounds of VC funding (Eden Ventures) and partnered with LinkedIn/InterCall.  The team also regularly presents at US and UK conferences.

An Awesome Launch pad!

Depending on your budget, location, contacts and available time there are several ways to launch:

1. Live on stage!! – Launch big at an specialised startup launch event such as Demo or TechCrunch50. Lots of Tech press and investors will to be there all looking for a scoop on the next big thing.  Andy McLoughlin and his co-founder Alastair Mitchell from Huddle launched at Demo in 2008. The catch is its not cheap. This years Demo costs $18,500! Andy & Ali did get one really good customer though.  Also these events are US only.
2. Shhhhh…. – No razzmatazz, just quietly leak your new app into the market. Its cheap and there’s no high pressure expectations from new users. The bigger the launch, the harder the fall if the users don’t like it. A quite launch means you’ve got time to get the app right with users. However keep your fingers crossed that your target community hears about your new app and the word goes viral. Bloggers can help to spread the word when your ready.
3. Conference bandwaggon – There are a ton of localised Tech conferences where you can launch. Some of them have launch pads especially for startups. To name but a few conferences: Web 2.0 (USA), Le Web (France), Office 2.o (USA), FOWA (UK), etc. These conferences are much cheaper than the big Startup launch events, however the message will not have the same impact with the press or investors.
4. “Read all about it” – Press releases are a well worn route when launching. Target the press you want to been seen in and engage with PR freelancer/company. Or take the cheaper option try and contact the press yourself. Unfortunately they are so busy they will rarely listen unless its someone they know.
5. Stand on preachers corner – Talk to everyone who will listen: friends, family, ex-colleagues, first/secondary degree contacts, etc . Everyone and anyone! Forums and communities where your target users hang out are also a good place to engage. But DON’T sell to them or they’ll kick you out. This options cheap and targeted.

With or without a bulging budget its hard to be heard above all the startup noise. Although there are 65% less new startups right now. Which ever way you launch one of the most important things to remember is engage with real could-be customers as early as possible. Customers ultimately equals profits, whereas Tech community does not necessarily. Here is a good (but long) talk on launching/early customer engagement from a wiley old Valley Tech startup vet, Steve Blank.