Category Archives: Sales

“Professionally friendly” – a trend I am noticing in Indian startup entrepreneurs

I used to think this was a great tactic followed only by young women (read: single, good looking, and smart) in India, but Indian entrepreneurs are now catching on to this new form of relationship. So my fellow entrepreneurs, if you want to be successful selling in India, talk to your good looking women classmates from college and learn how to be “professionally friendly”.

Professionally friendly” to me is a business relationship with a person who you want to do business with, but realize that you might have to build trust with to get it done. If you get too friendly they will take advantage of the relationship (like friends do, but you like your friends not business acquaintances) and if you are too professional, they will negotiate very hard and likely delay your deal.

Let me tell you a story first:

I have a good “friend” who’s an entrepreneur. He sells end-to-end software and solutions (his words) to hotels, restaurants and spas to manage their bookings and inventory. His company has been around for nearly 2 years with some decent traction (over 100+ customers). He’s built his business mostly through word-of-mouth.

Initially he found that most of his customers were taking too long to evaluate his product (30 day trials went to 90 or 120 days) and were negotiating very hard to reduce his already thin margins. He realized that his 2 initial customers were friend who were more than willing to pay fair price.

So he changed his sales process: Step 1) Cold call and get appointment. Step 2) Initial meeting and demo. Step 3) Invite prospect to Bangalore Club for a lunch / tennis, etc. – essentially grease the skids.

He found that it reduced sales cycle’s dramatically but obviously all that eating at Bangalore club did a number on his waistline (actually it made a dent in his wallet, but he raised his prices to cover the cost of the meal obviously). Second, this lunch thing clearly did not scale.

So he tried selling 2.0 – now he’ invite 3-4 people together for a double’s tennis match or a group networking lunch and figured they’d meet each other and talk. Worked better in terms of scaling up.

Meanwhile, his first few customers became good friends. Two of them were late on payments and asked for a 3-4 month extension (we are good friends, so please help) since they were “having to fight fires” or were renovating their spa or had some issues at their Chinese restaurant. The 3 month non-payment turned into 6, 2 free licenses turned into 5 and outstanding receivables were slowly approaching 72 days.

He’s found it very difficult to confront “friends” for overdue payments. They invite his family for lunch during weekend (Had their wives call my friend’s wife and told her about the new “diet” version of American chopsuey, which she had to try at the restaurant).

Bottom line – his “lets be friends first and then business partners” is not exactly going on track.

So how can you maintain a “professionally friendly” relationship? <Please> first stop laughing, since I did that for close to 50 seconds, when he told me this story.

I had 3 suggestions for him and I’d love your feedback:

1. Go prepaid – payments need to be made upfront for usage of software, services.

2. Separate selling function from payment collection so you can always say – “I am the nice guy but my finance person asked me to switch off the service till payments were received”.

3. Ensure business contacts are not involved with family – removes the “emotional atyachar” factor.

The 3 biggest causes of stress for entrepreneurs and how to deal with them

An entrepreneur’s life is fairly stressful. Most of it (in my perspective) is self induced, so the best advice I have ever received is “take a deep breath”. That said the first step to reduce stress is to pinpoint the sources of stress.

1. The stress of “expectations”. This causes serious heartburn and is the biggest cause of all stress. Most entrepreneurs believe they can be successful in their own right and when their own “expectations” of self defined success dont match with the progress of their startup, they tend to go into a vicious circle of blame, guilt and introspection.

Expectations from family – parents thought you’d be making good money by now, as opposed to eating Ramen noodles (they fed you much better) and guzzling oodles of Red Bull (drink milk instead).

Expectations from friends – many of whom got a good job at a larger company with a steady paycheck, (mostly) defined hours of work, a “life” after work and health insurance, while you sleep on the bean bag under your desk.

The expectations from friends and family can mostly can be ignored.

The expectations that you set for yourself, comparing your progress to Airbnb for e.g., either in terms of your product, traction, funding or hiring will cause you more sleepless nights. I have seen many folks couch this under the category of “benchmark against the best”, but its hugely unproductive.

“There will be people much better than you and those that will be much worse than you. Deal with it”.

2. The stress of “competition”. I worked at Mercury Interactive (bought by HP) for the longest stint of my professional career in one company (side note, my dad worked at two companies for 20+ years and he claims I worked at 20+ companies in two years). At Mercury, I got to work with an immensely talented bunch of engineers based in Israel. After their mandatory 2 years at the armed forces, they were so “battle hardened” that they LOVED competition. They (David Reichman & Boaz Chalamish) taught me how to really compete in hugely competitive markets. Here is the secret of their teachings condensed in 1 line. You ought to pay me for this in gold, BTW (Feel free to send me a beta invite to your product instead).

Rule #1 – Dont care what they do. Rule #2 – There are no other rules. Rule #3 – What? Are you still looking for more rules? Go back and read Rule #1.

My suggestion, the stress from what competitors could do, would do, will do, should be the least of your worries. I am not suggesting you ignore competition – just dont get stressed about them, because you can largely not control what they do. You can only control your own actions, strategy and plan. Focus on that.

3. The stress of “closure”. We have all been in this position. You email that certain angel investor, advisor, customer, potential key hire, then call them, drop them a voice mail, send them a LinkedIn invite, stalk them on twittter, only to get largely ignored. I send so many emails and get so few responses that if I had a penny for every email sent and 2 pennies taken away for every email I received back, I’d still be super rich.

The best way to counter this stress is to keep going. Develop “Temporary Forgetfulness” – which my wife can attest I am awesome at.

Most of all – “take a deep breath”.

What all does a non-technical co founder do in a SaaS / Mobile application startup?

If you are non-technical co founder at a startup that’s primarily a consumer web / SaaS or Mobile application company, there’s only ONE thing you should be focused on:

A plan to acquire, nurture and grow users (customers) with as little money as possible.

With a caveat – you should not use any of your technical cofounder’s time (once a week update / meeting to discuss progress is okay) to achieve your goal. If you do that, it takes away from building the product.

Dont waste your time on “legal paperwork”, “office space hunting”, “attending networking events” or “talking to lots of people to get advice”.

User acquisition involves multiple steps that you need to do in a disciplined fashion:

1. Understand, document and verify your user segments / audience / customers (demographics, usage patterns, usage behavior, etc.)

2. Put a plan to create awareness with as little budget as possible. Make the assumption that as a startup you will have some time but no money.

3. Document who are the key influencers (bloggers, reporters, analysts, etc.) you need to get in front of and when / where you plan to meet them to talk about your product.

4. Plan a content marketing strategy (blog posts, infographics, surveys, slide share presentations, videos, etc.) that will consistently help you build lots of content to help grow your organic traffic from search results.

5. Learn how to build, manage and grow a community of users to help build a great fan following for your company.

You can call this anything you please – Marketing, Hustling, Selling, Community building, User acquisition, etc.

Each of these are very measurable.

1. How many visitors came to your site?
2. What were the sources of your visitor traffic – blogs, organic search etc.
3. How many are repeat visitors, versus first time?

Nothing else matters. In fact if you do a great job at this, you will be as valuable as your technical co founder.

Essays on the Indian mind – Why the sales person gains no respect in India

Disclaimer: This is an essay for me and my kids (who I am hoping read this). If you have been in India for long, you probaby know everything about the Indian buyer, and why they behave a certain way, you wont get much from this post.

For the longest time, even after India’s independence, the focus was on “self sustained growth”. To a large extent there was mistrust and fear of having to depend on other countries for anything. So importing was largely relegated to “must haves”. Consumption was limited to the bare minimum. India for large parts is a “supply driven economy“, which means supply was of limited constraint. The  “customer” had to do whatever it takes to buy, instead of the “vendor” to do whatever it takes to sell. So selling is a largely undervalued skill.

Side note: It still bothers me to no end that most retailers turn customers away if they dont have exact change or if they want to pay by credit card. 

Even after the liberalization efforts in the 90’s large parts of the economy still remain supply-constrained. There are exceptions – mobile telecom, spas (yes there’s an over supply here), etc.

Then in the late 90’s the IT boom hit. Demand from abroad (largely US) was terrific for outsourced resources, so Infosys, TCS, Wipro, etc. had to focus on securing constant supply of good-enough engineers. Their efforts went on training them, transporting them, feeding them etc. not building sales talent to sell. That’s changed dramatically over the last few years, which is uncomfortable for all the IT outsourcers, except Cognizant.

So the Indian business owner (sweeping generalization alert) looks at most places where demand exists in plentiful so there’s very little effort or energy required to market or sell. (Side joke: The average Indian businessman thinks marketing means going to the market and buying stuff). So they never really gained the knowledge or expertise in marketing, wooing and selling to the customer. There were exceptions – largely in the CPG – consumer product goods (FMCG – fast moving consumer goods) segment.

So, the sales person is largely undervalued. Its very typical to have sales people paid less than 1/2 of delivery heads, or technically savvy operations people. They are literally treated as lower class citizens.

The smartest of the people hence tend to focus on being engineers, doctors, etc. leaving people that “like to talk a lot” focus on selling. The smart ones also picked up MBA’s from top Indian management schools and either end up in financial services or FMCG, but that’s changing too.

That’s the primary reason India does not have a sales culture. Its rare and there are a few exceptions. Those companies tend to be viewed not very positively by most Indians, which explains why they dont attract top talent.

Will that change it the future? I think it has to. The global market for products and technology is forcing most Indian entrepreneurs to start to sell in US, UK, etc. They are now trying to attract top talent for sales and *gasp* pay them top money.

An early trend that I am noticing in B2B startups in India

Something interesting is starting to happen among the B2B companies that are starting / getting funded in India. Companies that have a larger price point (> $1000 per month for e.g.) are all either a) moving to the US (company founder, key employee) or b) they are hiring larger inside sales (telesales) teams and teaching them how to sell outside India. There are exceptions (Visual Website Optimizer) but I am seeing more companies moving to US to seek faster adoption in the early stages.

By B2B (Business to Business) I mean companies that sell to other businesses, either small or large. There are enough documented issues selling in India to businesses, some of which include:

1. An extreme focus on cost by Indian businesses, which results in much lower (or non-existent) profit margins.

2. The inability to find good, trained sales professionals

3. The “request” by many “decision makers” to be paid a kickback, which if not paid, results in unpredictable sales cycles

There have been many company founders (OrangeScape, InterviewStreet, Mobstac, etc.), who all started in India, sold to their first few business customers here in India, but have now either moved to the US or are focusing on the US market alone.

Besides the fact that early adopter companies are largely there in the US, many or all of the issues listed above tend to go away bringing mostly issues of upfront investment on sales resources as the primary barrier to a US only distribution strategy.

So what does this mean for new entrepreneurs looking to start B2B ventures in India?

1. Dont. Seriously. Find easier and more fun things to do than sell to Indian businesses (This is a personal opinion alone).

2. If you still insist on doing that, get an awesome sales director / manager from a kick-ass company to head up your sales efforts sooner rather than later and help create a detailed training plan to hire, train and manage new sales professionals.

3. Look to partner and ride an existing distribution channel that exists. Tally has an excellent list of re-sellers / partners who you might want to talk with.

One last thought – Entrepreneurship is hard. Dont make it harder by choosing a distribution strategy that’s even harder.


5 tips on filtering sales resumes for a startup

This post first appeared in this morning.

Most entrepreneurs & founders will admit that hiring for startups tends to be among the top 3 most challenging tasks. The problem of hiring sales people is more acute in India given that “startup ready” and “risk ready” employees are far and few between. In the initial stages of most startups you tend to hire people with some experience or connections, because they need to get up and running quickly.

The most difficult part of the hiring process I have personally seen in India is the resume (CV) screening process.

Our process at Jivity is similar to most companies. We aggressively try to hire from our network, but that’s often insufficient. I personally believe that most (if not all) resumes are written by only one person in India. After that they are all “copy and paste” or “R&D” – rob and duplicate.

The most important part of the resume filtering process first is to understand the type of sales person you want to hire. Depending on the stage of your company, hire the right person for the role.

There are 3 types of sales people according to me: hustlers, relationship sellers, and process junkies.

Hustlers will get you deals, but not necessarily ones that fit your product or service 100%.

Relationship sales professionals have a good rolodex, but will need a “technical sales consultant” to explain the “details”.

Process junkies are best when you have figured out your sales process, but not great at coming up with new types of customers or new uses of your solution for adjacent markets.

Most companies need to hire hustlers early, then hire relationship sellers and finally at a more mature level, hire process folks.

Here are some of my quick tips for filtering sales resumes if you are hiring for technology startups:

  1. I look for specific and measurable achievements, not a list of activities in a sales resume. That means I will put aside all resumes that say generic things like “generated leads”, “was responsible for many customers”, etc. Instead I look for 3-5 metrics – how much was their target, (you can ask them what was the average selling price of the products they sold during the phone interview if you want to get a sense of their productivity), how many customer (actual number) they sold to over what period of time, what was the level (title) of the person they sold to, in which industries, etc.
  2. Hustlers don’t write professional resumes that are easy to read. They are typically first to find you at events and are willing to introduce themselves. Typically hustlers will stay at a company for 1-2 years max. After that either the company gets too boring for them or they are looking for a more challenging sales position. If you find sentences that say – “was the only sales person at the company”, or “the first BD (business development) resource at the company” or “started a new office in the region” or “landed the first 5 customers” then you are most likely looking at a hustler resume.
  3. Relationship seller resumes will typically have a long tenure in one industry or a location, and (in my experience) will typically have worked at minimum of 2 direct competitors. If the resume includes names of specific accounts (customer names) and specific titles they sold to, then you are looking at a relationship sales person’s resume. Typically the tenure at the company along with the combination of the title of their customer will give you a sense of their breadth and depth of relationship. These people will typically have built a relationship for long enough to help them sell to multiple levels and functional organizations (IT, business, finance, procurement, etc.)
  4. A process-oriented sales person’s resume will typically have a couple of switches from selling to one function (selling to IT vs. business) or type of solution (product vs. services) or ticket size (few big vs. many small). If you find achievements such as “responsible for 3 existing customers and added 4 new customers” you are looking at a process person’s resume. Other things that you will find in a process person’s resume include a listing of many sales methodologies – Spin selling, Target account selling or Complex sale process and a list of courses on negotiation or other management programs they have attended.
  5. Here’s a trick that eliminates many bad sales people. Don’t go by resumes alone. Give them an assignment during the screening call. Ask them to come prepared to present their first 30 day activity plan and their first 15 target customers, customer’s title and make them go over the list of steps and throw a few objections that you believe you have heard from customers which they might have to respond to.

Most companies tend to hire from competitors directly first (if you are in a mature market) or from larger companies in the industry (if you are a disruptive company in an existing space). I personally look for neither. For good sales people in India, I have preferred to hire from smaller companies from other industries where there the value proposition of working for a technology startup is more appealing.