Sales Strategies For Digital Start-Ups
Over the years, I've had the privilege of working with a number of digital start-ups, including launching my own venture that was subsequently acquired. As a consultant on creating and leading effective sales strategies for digital start-ups, I am struck by how many very early stage ventures (and their investors) and looking for mature sales strategies that are inappropriate for the lifecycle stage that the business is in.
The desire for fast sales growth sales is, not unnaturally, frequently driven by founders, who want to show potential investors that they will be the next 'Uber of market X' or the 'AirBnB of Market Y' and are in a hurry to show massive take-up of their service. They, therefore, aim to replicate the mature sales mechanism of tech leaders. Alternatively, investors, looking for a rapid return on their capital may put pressure on the founding team to drive sales over and above everything else.
But, the early stages of each new tech business are unique, and, whilst there is a huge requirement to make sales early on, the objective of greater importance is the acquisition of customers, their retention and the proof that the product or service that is being supplied has an intrinsic long-term value to the marketplace. It is for this reason that in the early stage of the lifecycle that effort should be focused on the product and market fit, rather than on developing the all singing, all-dancing platform.
In the early days, a tech business is actually less about the tech and more on identifying a need and then matching that requirement with operational excellence. Both Uber and AirBNB (and many other Unicorns) undertook a great deal of manual effort in delivering their service in the early days, focusing on why their customers were buying and then doing everything they could to fulfil that need. Early stage customers are effectively taking a punt, you need to understand why they are unhappy with what else is out there and nurture them to help evolve your product or service to meet that gap.
So, here are 3 important points digital startups should focus on in their early sales strategy for building the foundations for their subsequent success:
Find the place/time where there is an opportunity, where the alternative is nothing and the competition does not exist and grab those early adopters.
Work with your early adopters and then nurture them carefully to identify why customers buy.
Listen carefully to your early customers as they will provide valuable R&D feedback on where your product should focus.
Whilst there is a great emphasis in the tech sector on the ability to scale this shouldn't be a primary focus in the early stages, instead, founders should fake it until they have made the jump to large scale adoption. This is because scaling is a problem only when you are growing fast but early-stage businesses have to focus more on learning, and only once they have that nailed, should they then should they look to moving fast.
Unfortunately, the majority of startups fail because they do not master this first phase, they do not get enough customers and they do not listen carefully enough to the early adopters who do come on board.
It's useful as well to note the different skill set that the sales team require in the early stages and the incentives that the business puts in place for their success, and I'll be covering those in a separate post.
Useful Reading - You might like to read this book 'Unlocking the Customer Value Chain' which has some very useful insights for early-stage sales strategies. Available at Amazon
