The days when tech startups failed because they couldn't get the software to work are over. Today, what matters more is the ability to sell the product, but a worryingly large number of startups haven't got the message. In this interview I talk to Irina Berdisa, an expert in enterprise IT sales, about the sales ineptitude of so many startups, and how to correct it.
Alastair Dryburgh: If we're talking about B2B startups, you mentioned that only 10% or even less of new companies have anyone with serious sales experience. Why is this, do you think?
Irina Berdisa: We do what we know best. So a Microsoft developer opens a company and develops a product; a hairdresser starts a salon and so on. But sales skill isn't industry-specific and irrespective of your profession - engineer, developer, whatever - sales is not your forte. This is the irony of today’s world and also a massive disadvantage.
You see the results of this. I have worked with more than 10 different startups. They are exceptionally good at their job but not at sales. Some build a small sales team, but not enough to scale up.
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Dryburgh: There are still a lot of people who believe "if you build it, they will come" - that is, if your product is good enough you shouldn't need much in the way of sales. What do you say to that?
Berdisa: Fortune reported the “main reason” for startup failures: “They make products no one wants.” A survey of failed startups determined that 42% of them identified the “lack of a market need for their product” as the single biggest reason for their failure.
Of course customers won't ever tell you exactly what they want, but at least you can understand where they really struggle and how you can add value. A lot of software gets built without a really clear of what problem it solves for the customer. I have worked with five startups so far that closed within a year, simply because there was no market for their products.
Dryburgh: At what point does this lack of sales skill start to become a serious problem?
Berdisa: Very early. At the point when you need to pay your bills, at the point when you need to pay for your website development or salaries to people. Basically, when you realize that you have negative cash flows and no income potential this quarter.
Dryburgh: If you are a new business struggling to make sales, it could be because you don't have the right skills or process, or it might be because there isn't a product-market fit. It's obviously very important to know which it is, so how do you tell the difference?
Berdisa: You have to observe how the team works. Most of the time, employees don’t focus on sales, but instead everything else. I also think there is a “selling fear” inherent because of a lack of a clearly defined sales strategy and lack of sales training. Employees need to spend countless hours creating leads and singularly focus on closing. You need to get out of your comfort zone, go to your clients and ask questions. This is the best way to understand if your product is a fit or not.. Practice and perseverance!
Dryburgh: If you could ask three or four questions to assess the effectiveness of a sales function, what would they be?
Berdisa: I would want to see whether they are clear about what they need to do, so it would be very simple questions like:
• Who are you target clients for this quarter?
• What will you be closing this week/month?
• What is your sales target for the year?
Dryburgh: I hear from many fast-growing tech companies that it's hard to recruit enough of the right sort of salespeople, and that inability to do so is one of the biggest constraints on growth. Any suggestions for getting round this?
Berdisa: If you can’t hire professionals, educate your own team.
Sales people (or potential sales people) have a certain aptitude and it’s quite easy to recognize them, even if they haven't worked in sales before;
• They have been ruthless competitors since early childhood (football players, dancers etc.)
• They are greedy, they will go an extra mile for an extra dollar.
• They never stop! They hear no on a daily basis, and for a good salesperson, "No" doesn’t mean no, it means not today.
For me, these things are much more predictive of sales success than the things such as ability to learn or integrity, that many people talk about.
