Tag Archives: selling

Dig your well before you are thirsty

I was introduced to this book by Mark Tonneson, my first manager at Cisco. Fresh out of college, I was an eager whip-snapper who would soak up any piece of advice on “getting ahead”. I didn’t read the book, although  Mark bought it for me. It still is in my ‘library”. But the phrase “Dig your well before you are thirsty” has been with me since that day.

Most of us tend to ask for help when needed. Its the “on Demand” way of doing work. I’ll learn something when I need it, until that point of time, learning it is useless. I agree with that principle for knowledge.

For relationships, though, I have always tried to build them way before I’d ever need them. In fact building relationships without the intent of ever using them is a sport of mine. It comes from being interested in people and wanting to know as many people as possible.

As an entrepreneur that principle has helped me more than anything else I have done.

This however, is a story of how I acquired my first customer at my first company. It began 3 years before the customer signed up though. So effectively my sales cycle was “3 years”.

Circa 1995, Rational was hosting an event on Object oriented modelling. It was a free event, sufficient enough excuse for me to show up. The event was to start at 830 am and was scheduled for 2 hours. The venue was the Double Tree hotel in San Jose. I showed up at 815, and was negotiating with the automatic gate (which I felt was unreasonably placed in a position which required you to get down from the car to reach for the button that would give you a printed ticket), which would trigger the proximity sensor to open the gate.

I had to get down. Damm, I hate these poorly designed machines, which don’t really help serve the purpose that they were intended for.

It took me a few minutes to park and make my way back to the entrance. In the meanwhile a few other cars were backed up at the gate, facing the same problem. I was not  “smartly dressed”,  and had on a t-shirt and slacks. I noticed a few more folks struggling with the sensor gate, so I made my way across to that gate, and helped push the button and get the ticket for the first car. The gentleman in the car was in a beige suit and seemed preoccupied with something on his dashboard. He did though, look at me and murmured “thanks”. I was just about to make my way to the entrance when I stopped and realized every one of the cars in the queue would have the same problem.

For the next 3 minutes I pushed the button for 5 or 6 cars and diligently gave them the ticket so the drivers did not have to get down from the car. Noticing it was 825, I decided to make my way to the registration.

The “beige suit” was just behind me at the registration desk. He did a quick double take and asked me if this was the Rational rose event.

I replied in the affirmative and said it was and I was registered for the same event. He introduced himself as Steve and said “I really have to say thanks again, since I did not realize you were helping me even though it was not really your job”. I realized then that he thought I was an attendant whose job it was to “push the button and give the ticket”.

I laughed pretty hard for the next few minutes and we both got talking about my job at Cisco and his. We agreed to keep in touch after the event and “catch up over lunch sometime”. Over the next few months, I would email Steve off and on, sharing some articles and such, and we’d have some email “debates”, that but never really met him for lunch.

3 years later, I left Cisco to start my first company. Steve emailed me a few months earlier saying he had joined Netscape (Actra).

I sent an email to my contact list 2 months after my beta product release, letting them know our product was available for companies to install and try.

The first email response I got back was from Steve. He asked me to come by and give his team a demo.

A month later we started working with the Actra team (Netscape) as part of BuyerXpert product.

You can call it luck. I also call it luck.

I am actually known to be the luckiest guy on this planet.

The only thing I do to get lucky is dig my well before I am thirsty.

“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.