“A-B-C. A-Always, B-Be, C-Closing. Always be closing. ALWAYS BE CLOSING.” Alec Baldwin’s classic line in Glengarry Glen Ross defined what it meant to be a salesperson for millions of moviegoers (or at least casual YouTube watchers) the world over. But I’m here to tell you that Alec had it wrong – or at least he was only half-right – when it comes to enterprise sales. In their infancy most sales cultures look nothing like what you might imagine from watching Mr. Baldwin.
As a bright-eyed and bushy-tailed B2B startup with a hot new product on the market your first few sales are likely going to come from people you already know – friends, family, former colleagues and employers. These people already know and trust you and aren’t likely to be particularly hard sales.
Next, you sell “to the Valley,” by which I mean other startups. These generally aren’t particularly tough sales either. Startups by their very nature tend to be founded and led by early adopters who are eager to push the envelope and try out new technology. For example, when People.ai was approaching Y Combinator Demo Day we had people come up to us and voluntarily offer to buy our product – even if it wasn’t clear that their use case was a fit.
Farmers v Hunters
What that means is that your early sales culture tends to be dominated by “farmers.” To cite HubSpot “sales farmers are better at managing and growing current accounts.” They stand opposite sales “hunters,” who “excel at prospecting, generating leads and closing deals.” At the beginning it makes sense for most of your reps to be farmers. You’re getting a decent amount of buzz as the new kid on the block and most of the people you approach for deals are likely to be friendly.
Another benefit to being a young startup is that you don’t have to close too many new customers to demonstrate growth. Going from zero to one customer requires far fewer leads than going from 90 to 100. In short, as a young startup the resources you spend on outbound activities are generally minimal. You typically already have most of the leads you need and don’t have much money to spend on advertising, PR, events, etc. Your salespeople become essentially advance order-takers as they handle incoming leads and nurture existing customers. But as the old adage goes – “all good things must come to an end,” and eventually the music stops.
From Feast to Famine
While the exact timeline varies, every startup eventually runs out of “easy” leads to pursue. There’s only so many friends, former colleagues and YC batchmates you can call until you have to do the hard work of outbound prospecting. This can be a traumatic time for a startup and its sales team, and not every company survives. Working off of the classic adoption curve, one can imagine that this typically happens somewhere in the “Early Adopters” phase.
When I spoke to Ray Carroll, the VP of Sales at Engagio, about his experiences in the industry he remarked that “I’ve been on teams that have experienced challenging periods of transition from an inbound-focus to an outbound-focus. In early-stage companies there’s often a time where the initial buzz has worn off but they aren’t yet known quantities. The inevitable transition period typically involves a dramatic rethinking of companies’ approach to sales, and that often involves changes to the team’s composition.”
New World Order
This process happens at every B2B company. Many farmers aren’t equipped to handle the changing sales dynamic and are replaced with hunters – salespeople who relish the thrill of the chase and have the scars to prove it. Hunters are critical to continuing your organization’s momentum because good sales hunters are those rare individuals that have the skills and the desire to go out and successfully prospect new customers.
I asked Joshua Adragna, Director of Sales at Mattermark, for his perspective and he noted that “outbound sales can be a brutal process. It’s people who have to have a great deal of self-motivation, drive and tolerance for rejection that are likely to succeed in an enterprise sales environment. That’s a far cry world from the bubble in which many startups begin.”
None of this is to say that all the farmers disappear – every organization needs to invest in a strong customer success team that’s 100% focused on helping existing customers succeed – and some farmers will always stick around. But it is to say that a company fails to prepare for the inevitable change in their sales environment at its own risk.
What do you think? Has your experience with enterprise sales mapped to mine? Please let me know in the comments below!