By Henrique Dubugras, Brex CEO
True innovation is driven by aggressive targets. Not by slides and ball pits.
I am not talking about innovation of a product or idea. I am talking about a type of innovation that is often overlooked: innovation of internal processes. I never cease to be amazed by the number of problems that people are solving with and within technology. However, I am always surprised to see how many companies with very innovative product ideas still use outdated methods to conduct their daily operations.
How Not To Innovate
I’ll use recruiting and sales as two examples. Most companies still recruit through “spray and pray” LinkedIn mass messages that are often overlooked. For sales, they sell via online ads that don’t stand out. Then, they hope that ping pong tables and colorful bean bags will act as magic talismans that will enhance imagination and trigger innovation in the company. (I have nothing against ping pong or bean bags! They do help attract employees, but they don’t solve your problems). In contrast to all of these tactics, I have never seen so much creativity happen so fast than when we established our first quarterly targets. Because I like specific examples and think that you do too, I will tell you how this process worked in more detail for these two areas.
When we started Brex, we also started off with the obvious recruiting and sales tactics. LinkedIn and online ads were our tools for recruiting and inbound sales, respectively. We were still in our beta phase and there was no information about us online yet—which made these tasks that much harder. However, once we were able to get a potential customer on the phone or a prospect through the door, our conversion rates were very high. Our problem? Getting them to pay attention to us and take that call.
Our Famously Aggressive Quarterly Targets
Once the Brex team was large enough, we employed a tactic that we learned at our previous company, Pagar.me. We set our famously aggressive quarterly targets. These very high numbers set the bar high for individuals and teams, but we backed them up with industry benchmarks (to show that they were humanly possible) and with high compensation rewards (to show that they were worth it). Two weeks after the target setting meeting, the team realized that they would not hit the new targets if they stuck to old methods. Soon, creative solutions started popping out. My favorite ideas were handwritten letters for recruiting and a Brazilian chocolate campaign for sales.
Instead of sending 5,000 Linkedin messages, the recruiting team selected 500 profiles that we thought would be an excellent fit, did some more extensive research on their backgrounds and wrote 500 handwritten letters that we had delivered over the course of a few weeks. The letters were personal and kind of mysterious. We were trying to get these candidates’ attention, and we definitely did. One thing that worked for us was to specifically target the candidates and messaging to South Americans, whom we thought were most likely to resonate with our story and background. The conversion into actual interviews was six times higher than when we were using LinkedIn only. It was a manual process, but we got invaluable talent that was crucial at that phase of our company, and continues to be today.
Chocolatey, Delicious Sales
Sales followed a similarly thoughtful strategy. Rather than just blast online ads for “corporate credit card,” which has $20+ CPC and is clearly too broad so it doesn’t convert, the sales team mapped the coworking spaces in downtown San Francisco, did some research on concentration of target leads and the hours of the week these spaces were the most crowded. For two weeks, they had boxes of artisan Brazilian chocolates delivered to companies in the coworking spaces and followed up with an email. Once again, unprecedented conversion rates. The cool thing about this campaign is that it didn’t just catch the attention of the companies that received the chocolate. It also sparked the curiosity of others in their coworking spaces who did not get one—which was great for driving word of mouth.
In my experience, aggressive targets forced us to innovative aggressively. The more creative our approaches to common challenges, the better the result. Stretched targets drive this. Innovation is born from necessity.
Is your startup ready to get creative? Apply to a Techstars mentorship-driven accelerator, and #domorefaster.
Interested in learning more about the Brex Corporate Card for Startups? Learn more here.
Welcome to Mentor Mondays! Today, Suranga Chandratillake is back sharing his wisdom on why founders need to sell. Suranga is a GP at Balderton Capital, the founder and former CEO of blinkx, and a mentor with the Techstars Berlin Accelerator.
Some roles at a startup attract a lot of attention.
It goes without saying that everyone wants to be a ‘Founder’ and, whether a Founder or not, other jobs high on the hip list include CEO, Lead Engineer, Head of Product, and any job title that includes the term ‘Growth Hacker.’
However, a role that is consistently under appreciated is that of sales. Too often the ‘Head of Sales’ is given a lowly status that carries a slight whiff of pariah.
This is a huge mistake.
Speaking as an entrepreneur: selling is the single most important thing that a Founder must be able to do.
Speaking as a VC: I couldn’t consider backing a team where there wasn’t at least one natural-born-killer salesperson on the founding team. In fact, on many of the best teams, there’s more than one.
What Selling Actually Means
In my mind, there are three key components to sales in the broadest sense of the word:
- First, is the creation of a narrative that enables an audience to instantly connect with and understand the values and journey of a company, while providing a basic introduction to the product (or to whatever is being sold).
- Second, there’s the actual delivery of this narrative in a variety of contexts to a variety of people – from during an elevator ride to a crucial new hire or during your three week IPO roadshow to detail-oriented investors.
- And, last but not least, there’s the closing – asking for and getting engagement as a result of your delivery of your company’s narrative.
And by engagement I mean anything like making an actual sale to a client, securing investment from a VC, persuading a top-level hire deciding to join your company, or something completely different. Just anything where you’ve had to sweat to persuade a valuable party to choose you ahead of the competition.
How Selling Fits into the Job of a CEO
One of the things that makes selling so important (and therefore so useful) is that it is critically important to multiple stages of a company’s growth.
1) Early days – hiring
In the early days of most companies, one of the hardest things that any Founder faces is hiring. Chances are that you can’t afford to pay big bucks – or even average bucks. And you don’t yet have a successful company, brand or product that people want to be part of. All you have is your ability to sell the vision.
I have met many aspiring Founders who have a great idea, and ask us for initial funding so they can hire a technology person to implement it. To me, anyone who has to have money first doesn’t get it. A great founder convinces someone great who already has a well-paid job to give it up, and start a new madcap adventure. I want to see that a founder has already convinced someone to make an irrational decision – as behind every irrational decision, there tends to be a great salesperson.
2) As you grow – raising capital
This is the point of the story when you come to see me, or one of my peers. Most successful technology companies take at least one round of funding during their growth. Even if a company could be bootstrapped throughout, the competitive nature of their market often means that extra resource allows them to grow more quickly, and to win the race.
Selling is key in raising capital both because you have to sell the investor you are trying to land (obviously!), but also because any good investor is going to be closely watching your ability to sell. The fact is, most investors know that you will have further rounds of investment in the future, and/or an exit of some sort. They will also know that Founders with great selling skills will be better at doing those things, and will get a premium on the company when it sells (no, that isn’t fair, but such is life…)
3) As you grow – actual selling
Whatever the model, if you run a for-profit business, someone somewhere pays you money.
In the long run, you will employ a large, well-trained sales force to run this process, presided over by Sales VPs and Chief Revenue Officers. Alternately, if you offer an entirely self-service product, you will develop a complex system that allows people to manage their spending on your platform. But, before any of that, someone (read: you) needs to figure out exactly who is going to buy, what they are going to buy, how much they can be charged and, most importantly how they will be sold.
To hone in on this, ask yourself this question:
What is the core driver that gets a sale done in your business? Without understanding that, you have nothing. The task of identifying and crafting this core proposition is a key responsibility of the CEO and other commercial founders.
The best way to begin to understand your core driver is to get out there. Knock on doors and pick up phones, and try to sell a bunch of different things in different ways. Warning: most of your methods will fail. There will be embarrassing meetings where people say no (or, more likely, they just avoid following up). There will be hours wasted in Starbucks and corporate reception areas, waiting for someone to turn up, only to get an email an hour late saying they can’t make it after all. Suck it up – you wanted to be a Founder, right?
4) At scale – keeping it all together
When your company grows, it increases in complexity. Hundreds of people, tens of offices, a thousand different drivers and intentions and agendas. Over time you will have drift. Even the best system for corporate goal management will fail. Even the best designed leadership mechanisms can be undermined by a particularly negative member of the team. At this point it falls again on the Founder to be equal parts ambassador and leader. Move between all the groups equally, listen to the views, take everything on board, juggle competing visions and, ultimately, bring it all together with a clear narrative on where the company goes next and close everyone sufficiently that they put aside previous differences and follow your lead.
Sound tough? It’s tougher. Personally, I think this is the hardest type of ‘selling’ that a successful Founder will have to master as they build an organization. Unfortunately, it is also the most unavoidable and most important.
5) The end game
And then, at the end of it all, you will likely take your company public on the stock market or sell it, or both. Again, you are looking a long and super critical sales process.
You will run into all manner of rules and regulations, you will work with lawyers who will fact-check every word you want to use to sell the business (I remember three six hour legal sessions as we put together the prospectus for the IPO at blinkx!).
Of course, the substantial business that you have grown will speak for itself to a certain extent, but the premium you attract, and the smoothness with which the deal goes off, will both be depend on your ability to sell.
There have been many successful companies who started out with only technical founders. There have also been some that started with no technical founders at all. Other great companies never had a founding marketer, and many more didn’t start life with a lawyer or an accountant on the team.
But what every great company starts with is someone who can sell. If your team has been downplaying this skill, start focusing on it. If you don’t think you’re very good at it, start learning. If you’re leading, you’re probably selling.
I have some enterprising friends. Not a day goes by that someone isn’t launching a fitness blog, a recipe channel, a consulting practice, or a new startup. Every week I get requests asking me to “please like my Facebook page” and “send this link to everyone you know”! Many of the requests from my friends are not relevant to me nor will I ever be a target customer. I’ve even liked a men’s weight loss page just to support a friend (I never looked at that page again).
As a wantrepreneur starts a business, he/she just wants visibility. “Like my page” validates their idea, but doesn’t guarantee any sales. When we first started #entrepreneurfail, we were guilty of this!
Entrepreneurs on the other hand do not target their friends unless the people match their customer profiles. They do not focus on the mere number of followers on social media but rather the tangible sales. Entrepreneurs start building deep relationships with potential customers from day 1, instead of through superficial social media clicks.
Have you ever begged a friend to like your social media page? Let us know in the details below.
This was originally created by Kriti Vichare for #entrepreneurfail: Startup Success.
What’s the most important role as an entrepreneur? What’s the hardest thing about being an entrepreneur? What’s the one thing that defines a startup vs. just an idea?
You’ll be surprised to know all three answers are the same: SALES!
Why are sales so important?
- They validate the viability of your business
- They initiate the cash flow to invest in the growth of your business
- They beget more sales with referrals
Why is seeking sales so scary?
- The fear of rejection is founded in reality. Some experts say for every 50 leads, only 1 may come through.
- There are many unknowns, unlike other parts of a startup where the work is more concrete.
- Your startup may cease to exist sooner than you’d like.
Let us know what you think? How important are sales to your business?
This was originally created and posted by Kriti Vichare for #entrepreneurfail: Startup Success.
All else being equal, people buy from people whom they like.
As a child, I was focused on results.
I remember playing tag in elementary school at recess: I was naturally fast, but not the fastest.
Jason would beat me. Always. This was not the result I was looking for.
“Just run faster, and you’ll win,” I thought.
I kept playing as hard as I could. I envisioned the results that I wanted, and I spent all my recess time running. Always.
I got one of the results I wanted: I got faster. I became the fastest kid on the block, easily. And when I returned to school for 5th grade, I knew it was my time.
No longer would I come in second– first was mine for the taking. It was time to show up and be a ferocious competitor.
I continued to compete after elementary school, as well, and enjoyed a series of management jobs following business school– one of which was in purchasing.
In this position, I had “sales people” calling on me all the time, and these “sales people” were always trying to be my friend first. Always.
I studied my business strategy with fervor; my knowledge of what was needed was dialed down to a science. I found the nuances of business, sales, and infrastructure to be intriguing– and competitive.
Generally, I knew more than the “sales people” did about their own product, and stumping the sales representative with the right question was easy… But it also made me look like a jerk, and that was not my intention. I wanted to flush out the truth of each sale that I encountered, and I wanted to participate competitively. I love exploring, discovering, competing; training to go “faster.”
The result I searched for in my meetings was a salesman who actually understood their product– and the business they were selling it to– and could tell me more about it than I already knew.
The prospect of being that salesman to others sounded like a fun challenge; something new I had never done before. I left managment to become the salesman of my own dreams, and found myself once again studying the successes of others… learning as much as I could about packaging.
Soon, I knew more about the products and businesses than people who had been working in my industry for years. How easy! I was going fast!
Then, through failure, I was brought back to a playground lesson.
I learned that sales is about loyalty, rather than being faster, or smarter, or more competitive than the next person. All else being equal, people buy from others whom they like. This is part of who we are as humans. A salesman must seed the trust necessary to grow loyalty in others– and only then, can they reward the loyalty of others with great results.
You don’t inspire trust with data, evidence, logic, or having a lower cost and being the fastest. You do it by making people feel great… not by being a jerk.
So did I ever become the fastest kid on the playground?
I only tied for the fastest.
Did I win 50% of the time?
When Jason was “it”, people would entrap me so that he could catch-up and tag me. When I was “it” people would get in my way so I couldn’t catch him.
Then, twenty years later, it hit me: people liked Jason more.
My page views doubled last week.
Originally I would have patted myself on the back and celebrated a bit, but not this time. I’ve learned that I was focusing too much on “vanity metrics”.
I first found out about vanity metrics from The Lean Startup by Eric Ries. Some examples of these superficial metrics include indicators like registered users, number of downloads, and raw pageviews. They are easily concocted and manipulated, and often don’t correspond to the figures that really matter. Some examples of these actionable metrics include engaged users, customer acquisition, revenues and profits.Too often new entrepreneurs fall in love with their vanity metrics – myself included. In addition to raw page views, I was constantly comparing my site to random external companies, looking endlessly at metrics like my Alexa ranking. The false sense of success is an #entrepreneurfail. The key lesson is to not focus on the surface metrics that sound good, but instead to focus on concrete indications of business growth.For those of you who aren’t familiar with Snow White, this comic was inspired by the Queen who was so vain, she needed reassurance that she was the most beautiful, even though it wasn’t true! Don’t get caught in the same trap!What are some examples of vanity metrics you have fallen in love with? To read more about actionable metrics, check this article.
This post and comic were adapted from #entrepreneurfail: Startup Success.
It’s an epidemic out there in the entrepreneurial world.
Anyone out there suffering from CAPS (Customer Acquisition Procrastination Syndrome)? Symptoms include the eager urge to work on ANYTHING and EVERYTHING except finding customers to build a new business. Your doctor (or mentor) doesn’t need to tell you that building a business is contingent on finding paying customers, yet new entrepreneurs often dive into the more fun, less important tasks first!
Here is a list of symptoms that show that you may be suffering from CAPS. If you are an entrepreneur that has done any of these before or instead of finding customers, you may need intervention:
- Are you tackling social media completely manually? Or consuming it constantly?
- Do you have a constant, burning urge to check your stats: Facebook likes, Twitter followers, email list subscribes and unsubscribes.
- Do you find yourself running errands ALL. THE. TIME?
- Are you bogged down by clerical tasks instead of growing your business?
- Did you find and rent a fancy office space, before you had clients?
- Are you on a hiring binge – before you have actual work for the new talent to do?
- Did you throw a red carpet launch party, before actually finding a customer?
- Spending all day browsing email newsletters, reading blogs, watching videos, and skimming books?
- Did you spend months creating a fancy logo, slick business cards and a fancy feature-and-content-filled website before you were certain about the product you were offering and the customer you were offering it to?
- Are you letting daily stimuli sway your day instead of spending the day focusing on building actual leads and customers?
- Are you feverishly attending random networking events in the hopes you will meet the right people that may help spread the word about your business?
The only cure for this severe ailment is to find your first paying customer! And after that, rinse and repeat as often as you can, every day.Have you procrastinated in finding a customer? Please share your experiences in the comments below!
This was originally posted on #entrepreneurfail: Startup Success.
If you have to beg…you’re probably not working on the right leads.
Planning, executing, and closing the sales for your venture are arguably the most important tasks in starting a business. Too many new entrepreneurs (myself included) decide to go for the gold, and aim directly for customers, without putting in all the work it requires at the beginning.
Here are the biggest mistakes and #entrepreneurfail examples that new entrepreneurs make when working on marketing and sales:
- Targeting anyone and everyone and not focusing on a niche: I recently mentored students creating business plans. One student was targeting all women ages 12-65. Would a pre-teen girl want the same product as her grandmother? Probably not! The key is to imagine an ideal customer profile and then find him/her (instead of convincing everyone to become the ideal customer).
- Focusing on leads that are not able and willing to pay: I would love to provide free services to everyone I could, but that wouldn’t result in a sales funnel. Qualifying leads for ability and willingness to pay is key.
- Providing no compelling education in marketing or lead magnet: If you have no way of identifying “hot leads” how will you make any sales? Some examples include ebooks and videos.
- Forgetting to reach out to people you know to see if they can refer qualified leads: I often forget about my own networks when we start searching for clients. Even if my contacts are not my ideal customer, they may know someone who fits the bill!
Was it tough knocking down that first lead? Tell us about your experiences it in the comments below.
Enjoyed this post? It was originally seen on #entrepreneurfail: Startup Success. Find others like it!