Mar 9, 2016
As startups grow and evolve so does their sales team and along with each stage of growth comes different challenges. While each business is different, it is possible to be better prepared and take advantage of the learnings from other businesses, so that you can scale your sales team faster, better and stronger. Here’s an outline of the four key stages of a startup from inception to scaling, and the challenges they face along the way.
Stage 1 – Inception
Sales People:
0
Customers:
0 to 10
Product Stage:
Idea or prototype
Challenges:
Without any salespeople, at this stage, the business is just learning about the size of its opportunity and what its customers (or potential customers) may actually want. This is the customer discovery stage according to
Mark Birch, Investor & Entrepreneur
, with founders focused on building the product and determining if there is any interest in it. Many of the challenges from a sales perspective revolve around finding someone who is interested in your product, and in demonstrating to your potential customer your
passion for the product
.
Stage 2 – Testing
Sales People:
1 (most likely a founder)
Customers:
2 to 5
Product Stage:
Testing and validating the product
Challenges:
At this stage, you know you’re onto something but you’re still testing whether your solution is valid. While you may have only a few customers, your resources are tight so that’s all the business can manage at this stage, but you still want to get your product out to as many people as possible. So according to Terry Kelman, Director of Sales Enablement & Training at Senstay, “talk to anybody you will talk to you. Sell your product for any price you can get.” This may mean you’re giving your product away for free or make it Open Source to encourage testing.
It’s also critical at this stage to get feedback and open a conversation with your customers where possible. Think of it like market research which can be performed using analytical tools, that help you
discover symptoms in your sales process
(or product) and identify where the issues lie.
Stage 3 – Sales Acceleration
Sales People:
2 to 3 (with perhaps one sales manager)
Customers:
30 to 200 (depending on the type of product)
Product Stage:
Testing and validating the product
Challenges:
With only a few salespeople, but the opportunity has proven, the real challenge according to Birch is, “to build a base of loyal, passionate and successful customers to establish credibility while preparing the startup for full-on growth.” As many customers at this stage are early adopters, they provide a source of low hanging fruit for salespeople.
The sales team is still quite unsophisticated in its approach according to Kelman. Prospecting is akin to a shotgun approach and the focus is on selling features and functions rather than customer value or needs. As resources are scarce at this point in the business’ development, “the types of skills needed during this phase differ from those needed to sell more mature products. Salespeople must be resourceful, able to develop their own sales models and collateral materials as needed,” observe
Mark Leslie and Charles Holloway
.
Stage 4 – Revenue Explosion or Scaling
Sales People:
10 to 100
Customers:
As many as possible
Product Stage:
Refining
Challenges:
The biggest issues for startup sales teams tend to arise at this stage. Perhaps the business has just closed Round B funding and investors want to see rapid growth. All bets have been laid and it’s now time to show the results, so most businesses start to hire. As Kelman points out, “What investors don’t understand is that a big increase in the sales force brings big problems for the sales manager”.
This is where startups need to ramp up what Leslie and Holloway call ‘The Sales Learning Curve’, with “the more a company learns about its product, market, and sales process, the more efficient it becomes at selling, and the higher the sales yield”. Sales managers need to look at how they hire, train and scale. As
Professor Mohanbir Sawhney
of Kellogg School of Management explains, “executives need to embed expertise into the company’s processes and structure to lessen its reliance on a few key people.”
This is where sales training and enablement become a key factor that can make or break a startup. With strong training, agile processes and good collaterals, the business can rapidly bring on board new sales reps,
build trust in customers
and potentially have them selling at a rate that meets investors expectations. Another alternative that Swahney suggests is to “tap partnerships to access capabilities, technology, and customers.”
Regardless of how the startup decides to scale, the needs of their sales team will change considerably. Find out how to prepare your business to scale your dream sales team.
