When speaking to a room of entrepreneurs, I’ll often ask a simple question, “How many of you are in sales?” The usual response is anywhere from a third to half of the room sheepishly raising their hand. Some have hands-on experience in sales roles. Some have launched and led companies in their past lives.
The truth—which is an eye-opening moment for some—is that everyone in that room is in sales.
An internet search of “most important skills for entrepreneurs” gets you more than 63 million results, and article after article will show a litany of things you must be able to do to launch a successful business. A surprising number of these articles under-weigh or completely overlook a critical skill: selling. If you start a company, are a co-founder, or are part of the early management team of a startup, no matter your title or functional role, you’re in the business of selling.
This article outlines the different ways all startup employees engage in selling, even if it’s not a part of your title.
Working at a startup is a sacrifice—there is so much to do, resources are scarce, there isn’t always a lot of cash in the bank, and there is a high probability of failure at every turn. The founders and early management team at a startup typically take compensation well below what may be commanded at a corporate job. They sometimes may forego a salary entirely for a period. All while working more hours and having a high probability of failure. As a founder or early startup employee, building the right team is critical. You must sell talent on the vision and potential of what you’re building so the team can overcome these challenges.
Raising Outside Capital
As much as some may wish it were the case, investors don’t “give” money to the entrepreneurs they fund. An investment is a transaction. An investor is buying a piece of the company you are selling. According to Pitchbook, through Q3 2023, the median seed-stage deal size was $3MM, and the median seed-stage valuation was $12MM. So, a median deal, not accounting for geographical differences in the market, may represent a seed-stage founder selling ~25% of their business to investors.
Just like your customers expect an ROI from using your product, an investor expects an ROI from the percentage of your business they’re buying. As a founder, you must build an investor pipeline just like you build a sales pipeline, finding the right fit and alignment for what you’re selling: a part of your business.
Last but certainly not least is the things you’ll sell: your product. According to some studies, the average software-as-a-service sales cycle is 84 days, but it’s longer with more significant contract value and almost certainly longer to get your very first customers. Thus, finding a customer must start before you think your product is ready, potentially before you even form your business entity. Get out there and talk to your customers—obsess over their problems, what they need to solve them, and what kind of product you have or need to build to help them. Once you find product-market fit, build the pipeline and team you need to grow.
Still don’t want to be in “sales”? Unless you plan to never make a hire, raise outside capital, or get a customer, you’re a salesperson. But don’t despair. The skills necessary to successfully navigate selling can be learned and applied.
- Do the Research – Know what your future customers, colleagues, and investors want and how you and your business can get them there.
- Be Honest – Sell a vision but be transparent about where you are. It will help you in the long run and ensure you can find the right talent, investors, and customers who are willing to invest their time and money in you today and weather the ups and downs ahead.
- Be Disciplined – We often want to hang on to those “maybes,” the people, investors, or customers that could have a huge impact but aren’t ready to commit for one reason or another. You must be ruthless with your time and cut some opportunities loose so you can focus on those that have a better chance of closing.
- Make the Ask – Many of us fear rejection. We have a great conversation, enthusiasm for the business and opportunity, shake hands, and go on our way. This is a nice activity but does not impact your business. Make the ask so you know where someone stands. Are they ready to join your team, buy a piece of your business, or purchase your product? If they’re not, they’ll tell you why and where you must be to earn their commitment.
Develop and apply these skills. Over time, you’ll grow more and more comfortable in your sales shoes, and you’ll be confident in raising your hand when I ask that simple question.