We all know it’s a tricky financial market out there at the moment, and venture capitalists’ investment in startups is down. But even in these trying circumstances, there is still major scope for startups, with plenty of good examples of businesses successfully launching in downturns.
In our recent webinar Startup Sales Stories, over 90 business development professionals joined us for a candid and entertaining look into startup life.
Hosted by our MD Corinne, we invited three special guests to join us:
Rory Sadler, co-founder of Trumpet, recently raised £1.5m pre-seed.
Loral Quinn is on the women in fintech powerlist, CEO of digital bootcamp CodeClan, and founded a fintech startup.
Luke Johnson is ex-Ovo Energy and moved with one of the founding teams to join the SaaS startup Payaca as their Head of Revenue Operations.
During the webinar, we asked our panellists three questions:
- What quick tips do you have for how to handle investor expectations versus the reality of startup sales growth?
- We all know startups have limited resources to build sales functions. How would you structure your dream team in the early days, knowing what you know now?
- Can you tell us a story about the time you succeeded or failed, and how it changed your approach to sales in your startup?
Question 1 – What quick tips do you have for how to handle investor expectations versus the reality of startup sales growth?
While our panellists acknowledged the challenging current climate, it was also great to hear their ideas for reassuring investors their money is in safe hands.
Loral’s company isn’t investor-backed, but the way she deals with her board members can equally be applied to investor relations. She feels it’s important to be focussed on educating investors so they can see you know the product in detail and have the right strategies in place.
“You need to demonstrate you have the right mix of channels and that you’re using the right products in the right channels.”
Loral’s recipe for success is structuring things the right way. If you can get retention and engagement right then that drives acquisition, which in turn accelerates the payback period. She also urges not to be afraid of experimenting with different methods, and to show investors that you’re trying these new things in order to attain sales success.
For Luke, having a clearly defined growth plan to lean on is crucial, but he also agrees that experimentation is key.
“You have to show you’re testing channels and approaches. Showing this to investors gives confidence that you’re trying new things and investing their money into finding channels that will work and grow.”
It’s also vital to know your numbers inside and out, so you can demonstrate that your growth strategy is working.
“You’re working with these investors for a reason and should have a strong relationship with them,” adds Rory. “They’ve backed you because you’re the team to drive this forward. They don’t expect it to be plain sailing. What they want to see is how you embrace challenges, and what your plan of action is.”
Also remember that there are other signals to take to investors beyond just new customer numbers. Return to your value proposition and drivers, and see if you’re hitting targets against these.
Rory cautions against hiding away from sharing problems and urges startups to be honest with investors about what’s happening and how they’re dealing with it. He also advises using investors collectively and individually to benefit from their experience and knowledge.
“Vulnerability is a strength and asking for help is incredibly important. Being honest and transparent is key for a fruitful, long-term relationship.”
Question 2 – We all know startups have limited resources to build sales functions. How would you structure your dream team in the early days, knowing what you know now?
All three panellists agreed that in the early days, it’s vital that sales are founder-led.
“You have a passion you can’t teach, which is why your early adopters go with you and take that punt,” says Rory. “You can’t teach that to salespeople until you’ve created credibility with enough customers and enough investors.”
Luke agrees with Rory on this point:
“The founder is a superpower in the business. They need to lay the foundations for how the product is sold – such as the route you take customers, and how you talk about it.”
But what do you do if your founder doesn’t have a sales background, and is more tech or product based? For Luke, this doesn’t matter.
“A founder knows the product inside out. This puts them in a strong position to talk about it and sell its benefits.”
He advises founders to use the knowledge they already have, which Rory agrees with.
“I’ve seen a lot of founders who haven’t done sales, who think hiring a sales team will solve the problem, but it won’t,” he advises. “You need to bring people on your journey.”
Rory also noted that he sees a lot of companies bringing on a playbook too soon into the process, when the environment is still changing.
“We waited until we’d hire our account execs and then created the playbook together.”
He believes it’s important it is to hire sales people who are after a challenge, not just a salary. Trumpet’s hires join the company with the mindset that they can determine what their future looks like at the company and influence its success. And at Trumpet everyone is encouraged to work with coaches and mentors, so if you’re not from a particular background, you find someone who is and ask for help.
“Sales isn’t rocket science,” says Rory. “You’ve got this far because you’ve been able to pitch your business. As a founder you can’t know everything, so lean on people who do know things and who can guide you through the journey. It’s not easy, but embrace being uncomfortable.”
When the business is growing, that’s the time to take on salespeople. But don’t be afraid to look beyond the norm. At Payaca Luke didn’t necessarily look for people with sales experience, but more those who had the right attitudes around understanding technology and problem-solving.
”The ability to learn is also crucial, and to have genuine curiosity,” says Luke.
And this curiosity needs to reflect the conversations that salespeople are having with customers.
Loral agrees. “As you build your team, you need to build in people with a test-and-learn mentality.”
She also agrees with Rory in hiring people who are comfortable with being uncomfortable.
Loral comes from a marketing background so, for her, messaging and comms is crucial for a startup dream team. As people buy things based on emotion, it’s important to think how you can get buy-in, and create the desire, scarcity and social reward that get people through the sales journey. It’s also important to think about how to build relationships and get leads with influencers and networks.
Question 3 – Can you tell us a story about the time you succeeded or failed, and how it changed your approach to sales in your startup?
With statistics showing that the failure rate for startups is 60%, it’s almost parred for the course for a founder to have a failed business behind them. So what advice did our panellists have from their own experience?
Rory notes that passion is the recurring theme within any successful startup.
“You get through the tough times being passionate. I joined a startup but I wasn’t fully passionate or invested in the space or product. And because going into a startup isn’t the same as joining a well-established brand, if your heart’s not in it then it won’t work out. But that’s led me to where I am today. It’s what motivates me – I know our product is delivering meaningful value and customers love it. It taught me that a startup is much more than a role or a job title.”
Loral noted that one of her previous failures was from trying to do too much. Her previous business had some great investors and was named by Richard Branson as startup of the year, but its reliance on enterprise sales with a very long lead time led to its downfall.
“You take it very personally, as you have a passion for a product that you think will change the world, but there are so many barriers to get through that need to align. So I took those lessons and I’ve done things differently now.”
Luke shared one of the key things he’s learned about startup life in general: the importance of having strong core values for your business.
“I think this is really important, particularly in the hiring process. It’s hard to get hiring right, but if you have these in place then you have a good baseline for what you’re looking for in a person.”
One of Payaca’s core values is transparency, which Luke feels is key for the hiring process.
“Ultimately you want to attract the right people so you have to be honest about what it’s like. It’s great working for a startup as you get to work alongside like-minded people and have a tangible effect on the business’ mission. But it is hard work and you need to put your all into it. So being transparent about the full experience is really important in hiring.”
Question 4. Organic lead generation and finding a mentor
As well as the three main questions, there were then some insightful questions from the audience.
When asked what would be their advice for building lead generation and sales organically, Luke believes being content-led is crucial. You need to be producing really good, relevant content that speaks to your audience. He highlighted how YouTube is a great place to start, as it’s one of the most viewed platforms and has the second-largest search engine after Google. Once that content is out there, it’s then working constantly to generate leads.
For Rory, being consistent with content has been important for Trumpet. The company committed to posting daily on LinkedIn. Only around 20% of their content is actually about the company – the rest is sales tips, tricks and insights.
“It’s a compound effect – the more you’re there, the easier it gets and the more credibility it builds.”
When your content is in place, you need a high-performing website that will help you seal the deal. Loral highlighted the importance of ensuring that elements such as trust, credibility, scarcity and urgency are built into it, so you encourage customers to finish their journey.
“Is it a bargain? Will they have a sense of belonging if they buy it? Do other people like it?”
Luke also suggested checking out communities such as Views Are My Own for learning about further strategies to get your name and brand out there.
When it comes to finding a mentor for your startup business, Rory reiterated the importance of leaning on investors to ask them if they know of anyone suitable, and also going to your communities and asking people. It’s important to find someone who’s had first-hand experience of the challenges you’re facing, and knows how to build up a business from the ground up.
“There’s a concept called the bird in hand principle. Leverage that. You’ll be surprised by the people your network knows, whether it’s friends or family.”
And the final piece of advice shared by our panellists is, perhaps, the most important of all.
“It’s OK to ask for help.”
Something we could all do with remembering as we go along our sales journey!
Do these stories resonate with you? To chat about your current sales challenges in your early-stage business, book in a 30-minute meeting with Corinne.