Geoff Ralston:
Alright. Good morning everyone.
Audience:
Good morning.
Geoff Ralston:
We are halfway through Startup School. Can you believe it? Already. Wow. Yeah. Or more correctly, we will be after this week. And this is going to be a great week of talks, lectures conversations. Today, we have Tyler from Clever, who's going to give a talk on how to sell, to begin with. And afterwards Harj and Ammon from Triplebyte are going to talk about how to build an engineering organization. Two pretty important things if you want to build a successful company. I will start off quickly with my usual administrivia. We will shortly be sending out a midpoint feedback form for you guys to fill out. We really would appreciate getting as many responses as possible. This is our form of talking to our customers, you all, and getting feedback. We're always trying to improve Startup School, we hope to do it every year and make it better every year. So please tell us what you think and what you think we should change. Adora and I were talking a little bit about updates. And I've talked to a bunch of people live, and some on the forum about updates and what makes sense for updates. And just to put it bluntly, think hard about your metrics, the ones you're using. Do not use bullshit metrics. What is a bullshit metric? It's a metric that doesn't really measure the road to success for you. It's something you're making up. Any startup that you're building is an enormous, complicated, difficult, crazy task. And no matter what you're doing, if there is no milestone on the way to achieving that enormous task, then you're kidding yourself and it's not really a step on the way to success. Those milestones are more than anything for you. For you to measure that you're making progress towards your goal. So don't make stuff up because you think that's what we want to hear. Or just because you're bored, they won't help you. Okay. As always problems et cetera, email to startupschool@ycombinator.com. And with that, I think, Tyler, we are ready to go. So, my good friend Tyler Bosmeny, from Clever.
Tyler Bosmeny:
Hey everyone. It's an honor to be here, speaking with you today. Thanks for having me. My name is Tyler Bosmeny. I'm the CEO of a company called Clever. And I wanted to talk to you about something that I think is one of the most fundamental and important things any founder needs to master, which is sales. And before I get started and share some of the things I've learned and picked up over the way, I thought it might be helpful to share my own personal journey to sales as something that I've come to learn and just really appreciate and respect as a craft. When I was in school, when I was in college, I was a math major. My graduate degree was in statistics. I was the last person I ever thought would ever do sales. And so my own journey to getting here was I was working on the college newspaper, I joined the college newspaper, it seemed like a fun thing to do. I had some friends who were on it. And one of the roles they had open was they needed somebody to run the advertising for the newspaper. And so I was spending in college hours a day, figuring out how to sell ads to local businesses, so we'd have enough money to print and put out the paper every day. And doing this for several years, if you know anything about college newspapers, you know one of the things, the biggest determinant of how much money they make every year is how well the economy is doing, because lot of the ads are for recruiters. But I just happened to be there during some very good years. And when I was leaving the advertising sales team, we set records for The Crimson and so we sold a lot of ads. And so I thought, "Okay, this is interesting, it's an interesting craft." And then as I was getting ready to graduate school, getting ready to graduate go off to college, excuse me, go to work. I'm doing math, I'm thinking, you go off to finance, do a hedge fund something like that. A buddy starting a company and he says to me, "Tyler, I need you to come join because you're the only person I know who knows how to do sales." And let me tell you I was offended. This was not how I saw myself. This was not you know what I imagined doing after school, but I was also really intrigued. And I was really good friends with this guy. And I said, "Why the heck not?" So I ended up going on a very different path and joining his startup building a sales team, we were selling to newspapers across the country. And if you've ever worked with or thought about newspapers before, you can imagine they are very hard customers to sell to. And so I really cut my teeth and have a lot of fun, frankly, over many years figuring out how to sell into this market. And we sold to a lot of newspapers. Then fast forward a little bit and I come on to start Clever and one of the co-founders started through Y Combinator about six years ago. And if you don't know anything about Clever, we're a single sign on platform used in schools, and today, over half the schools in America use Clever and so we've really done a lot of selling and really had to figure this out once again in a different context. And so, I was thinking about, what would be most helpful to talk about, what I'd most want to hear in your shoes, or what I most would have appreciated knowing when I was first starting to cut my teeth on sales. And so that's what I want to share with you today. It's just things I've picked up along the way. Some observations I've had, and hopefully some practical tips that you can take home and implement, as you get your startups off the ground running sales. Sales has a lot of mystique and a lot of lore around it. Or at least it did to me when I was thinking about sales early in my career. When we think about sales and we think about sales people, a lot of us picture Don Draper, we picture these people who are so charming, so impossibly funny, who they always have the right line at the right moment to win the deal, they're of course, incredible golfers This is how sales is portrayed in every movie, in every TV show. And so a lot of people go through life thinking that this is what sales is about. And because we build up this mystique of what sales is, and the types of people who can do sales, I hear founders say very often things like, "Well, right now we're just building the product. And once it's finished, then we'll go and hire the sales people." Well, guess what? Hire the sales people. That's you. And that looks nothing like the mystique and it looks nothing like the lore in my experience. This is my co founder, Dan and the early days of Clever when we were doing sales. Here he is on a broken chair, in a three by three call room. I think he's eating a bagel, because he probably didn't have time for breakfast. That's what sales looks like, could not be further from the Don Draper imagery that a lot of people think of. So sales is you. And Y Combinator, I remember when we were going through the program, Paul Graham got up on the stage, and he said, "You should be spending every moment of every day doing one of two things, building a product, or talking to users." And talking to users, a big part of that can be selling. So this is a core responsibility of every startup founder, is not just building the product, but also talking to your users understanding their needs. And as you learn that is really a big part of what selling is. So this is a core responsibility for founders. A lot of founders think, "Well, I haven't done sales before." And that's true. And they say, "Well, I'm not good at sales yet." And that could be true too. But one thing I've learned, is that as founders you also have some very unique advantages that can make you actually incredibly powerful at sales and very potent. And the two advantages that I've noticed, one, is just your passion. You are more passionate about the product that you're building and selling than anyone in the world. Because otherwise, you probably wouldn't have irrationally quit your jobs and moved in with your parents, or whatever you've done to start this company. So one is your passion. That is so powerful in sales. And the second thing you have is industry expertise. You know this problem better than anyone, you know why it needs to exist, you understand this problem more deeply, hopefully, than anyone. And so these two things, even if you've never done sales before, mean you can be incredibly effective. And so don't think otherwise. Early on with Clever, one of the things we did that really worked for us was I had two co-founders. So there were three of us, and we just decided that one of us had to own sales. It was so important that we needed one person to be thinking about this every day. And so that ended up becoming me. My other two co-founders were focused on building the product and implementing the product and we decided this was important enough that I decided I was going to peel off and spend almost 100% of my time selling this product, starting from before it was even built. So from that point, from early enough on, think about who in your company is really owning this and it should probably be a founder and it should probably be as much of a full time job as you can spare. So now I want to talk about how sales actually works, and if you know anything about sales, Sales 101 is a lot of people talk about it like a funnel and there's different variations of this funnel. I have a really simple one that I put up here step one of the funnel is finding prospects, prospecting, these are leads who might even be interested in buying your product, who might even be interested in taking a call. From there you have conversations. Okay, so you figured out they're interested but you got to have a lot of conversations to figure out, "Is this the right product for them or not?" Third is closing. Okay, they actually want to buy the product. How do you not snatch defeat from the jaws of victory and lose the deal, you have to go through a closing process. And if you complete all of those things, then hopefully you're in the promised land. And you have revenue, and you have your first sales. And so this is how I think about the funnel. And what I'm going to do now is just walk you through each of these stages and share how I've approached these in my career and some tips that have worked for me along the way. So your mission in the first stage of prospecting is to figure out who will even take your call. And one of the things that for me was really helpful to understand is well, you're going to hear no a lot, you start talking about a new product to people and you're just going to hear a lot of nos. But one of the things that was really helpful for me to understand is you have this technology adoption curve. This was put out by a guy, Everett Rogers and the 60s. And it starts on the left, you have your innovators, and you have your early adopters of new technology, your early majority, your late majority, your laggards. These are terms that people in Silicon Valley throw around, that I've been hearing for years. But what I didn't know was that the inventor of this framework, this technology adoption lifecycle, Everett Rogers, he described it as a bell curve. And he actually went through the effort of quantifying the area under the curve in each of these different segments. And one of the things you notice is looking at this, the innovators segment is just 2.5% of the population. That means 2.5% of companies will even consider buying a product from a startup that is unproven, with no revenue. And when you realize that to some founders, that's kind of depressing, wow, that's a very small percent of the market. But when I found this out, I actually found it massively motivating and massively invigorating. Because all of a sudden, it makes what you have to do really clear, you have to talk to a lot of people because you have to find that to 2.5%. It's a numbers game, means you're going to have to reach out to at least 100 companies to find just two and a half on average, who are even potential buyers for your product. You're basically playing a version of, Where's Waldo, where you are looking for the very few companies who might be in this innovator segment. And so expect early on sales is not reaching out for 10 companies, reaching out and doing sales is a lot of grinding and it's a lot of effort in order to get the result you want. When it comes to actually starting these conversations, I found there's three things that worked for me. So in terms of finding those innovators, the first thing that has worked well for me is using my network. The second, which is a little surprising to people is conferences, and I'm going to talk about that. And the third is cold emails. These are the three ways in which I find prospects. I'm not going to talk about my networks. I think most people understand that. But I can tell you many of the earliest deals I've done at every company I've been at, have been through people I've known, friends of friends. So do not underestimate your network, especially if you know the industry. You might think it's not very big, but you probably know a few people and those people might know a few people and so spend some time thinking about your network because you might find some really great sales opportunities that come through there, and those are the best. You don't need 100 people in your network to get to sales, you can usually deal with much fewer. But let's talk about conferences because I think conferences are the most underrated aspect of sales and one of the least understood aspects of sales. When I say conferences, a lot of people think I'm talking about this, CES or E3 and going to some place where there's 80,000 people, and it's basically more like a rock concert than anything else. And when I say conferences, I'm talking about something very different. Usually they look like this. Usually it's a bunch of executives or people in a hotel room, cooped up for a couple days, oftentimes, you know, in places like Milwaukee or Kansas. And let me tell you, this is such a powerful way, these conferences are such a powerful way to meet your users. You have to go where users are. And many times if you're selling to a business or to a corporate buyer, this is where users are, they go to conferences, they're there with their peers, they're learning. And that's where you should be to. Now, let me say a few words about how I've approached conferences in the past. Because this really is where so many of Clever's initial partnerships and customers came from. One, figure out what are the big industry conferences for your product and your startup. Usually, there's not just one, usually there's like 10, and you have to work to figure out what they are. Ask people in the industry, "What conferences do you go to? Which ones are on your radar?" But there's usually quite a few and definitely more than one. Two, pick a few that you're going to attend, buy a ticket, sometimes they're expensive, thousands of dollars, sometimes you don't even need a ticket, it depends on the event. But figure out the conference and decide you're going to go hopefully weeks or months in advance. Three, get the list. This is such an important part of making conferences like this worthwhile. Find a way to know who's going to be there, write to the organizers, write to sponsors, maybe it's on the website. But figure out who's going to be there in advance. Don't just show up at a conference and think you're going to network your way and meet everybody. Although if you can pull that off, by all means, do it. It's just not something that everyone can do. But when you have the list of who's going to be there, then you can email people in advance, and say, "Hey, I'm going to be at this event, I noticed you are too, I'm working on this thing. I'd love to show it to you. Can we find some time to chat?" And don't just do it with a few people, do it with as many potential buyers or prospects as you can. My goal when I go to a conference or when anyone from Clever goes to a conference is that we have our entire days booked up in 30 minute increments. Because we've done so much effort in advance of the conferences, trying to line everything up getting these meetings and they end up becoming the most productive day of the year when we actually go, and we actually get to have all of these conversations and have all of these buyers and I get to the end of a night, even the first night at a conference, when I yeah, just been doing one day ... And let me tell you every time I am exhausted, and I am also so energized because there's nothing that's more fun than meeting with customers and meeting with potential buyers and hearing their reactions to what you're building. So I cannot emphasize enough how important conferences have been in every company I've worked in sales at, and I highly recommend you explore this. So that's conferences. The other and frankly the probably more common approach is cold emails. People don't really cold call too much anymore. Maybe you can make it work, but cold emails I mean, I still do that today. And a lot of people don't know how to write cold emails, they don't know how to reach out to someone in a productive way. I know this because I'm on the receiving end of so many bad cold emails, we probably all are. They're really long, they're not personalized, they're not actionable, they're boring, they're irrelevant. So don't do that. But if you don't do that, well, then what do you do? How do you have a cold email strategy that's effective? In the early days of Clever, in the early days of other startups, we would sit down and we'd send, 10, 30, 50 emails to cold prospects. And it would look something like this. And I actually found an old email and I put it up here so you guys can see it, you feel free to copy it, but it is the simplest thing in the world. You'll notice it's short. It's to the point it's personalized. It's actionable, "Hey, my name is Tyler. And I'm the CEO of Clever this is what we do. I thought this might be relevant for you because of XYZ reason that's personal to you. Even if you're not in the market, I'd love to chat with you about this, which is true. Do you have some time this week or later this week? I'm free I'm free now or I'm free at this time." Super simple, this will probably get read as opposed to some of the paragraph long diatribes about why my product is the best and why you're crazy for not using it and before we even met. All you're trying to do is get a call with somebody and actually meet them. And so we'll send out cold emails. It's very effective, but make sure you do it right. Make sure you're writing emails that are interesting to people, that aren't too salesy, that are personalized and that are genuine. And remember, all you're trying to do is get a conversation, get out of that prospecting phase and into stage two, which is conversations. So let's talk about stage to stage two. Okay, you've gone to conferences, you've done cold emails, you've worked your network and now you're talking to prospects. This is exciting. People want to talk to you. They might want to buy your product. This is what you've been waiting for. When this happens, and you get them on the phone, remember to shut up and listen. And when people ask me, "What's your number one sales tip?" When new sales people say, "What's the number one thing I should practice or work on?" If you take nothing else from this presentation, take this. Sales is about listening. I've had the opportunity in my life to shadow some of who I think are some of the best sales people in the world, incredibly successful salespeople. And they look nothing like the picture I showed you on the first slide. They were soft spoken and what I remember specifically was that they were world class listeners. And the reason that's so important is because that's what sales is at its core. People think sales is about just being a battering ram and just hitting or getting your points across, and repeating them over and over until somebody finally breaks down and buys your product. And let me tell you, that doesn't work. And what does work is building relationships with people understanding their problems, understanding what their needs are, and then seeing if you can help them with your solution. And in order to make that happen, you have to listen. So most founders when I ... I've shattered a lot of sales calls and one thing I see very frequently as a founder, they're so excited. They finally got someone on the phone, they're hooked. They're definitely going to be the first customer and they get them on the phone and they just talk. And it's understandable, right? You're excited, you're excited about your product, you're passionate about it, you can't wait to show off every bell and whistle that you've spent months thoughtfully building. But it will totally kill your sales deal. What you'll naturally do is talk for 70% of the time on the first call, and maybe leave 30% of space for the other person. The best sales people in the world, when I've seen them in action, it's the opposite. They're listening 70% of the time. And they're asking questions like, "Hey, tell me about the problem you're having. How do you solve it today? Why did you even agree to take my call? What would your ideal solution look like if you could have anything?" They're asking questions because they care, and they want to understand and they want to figure out how to help this person solve their problem, and yes, their product might be part of that solution, but it involves deep listening. One trick I can share on this, is at Clever we use a tool called UberConference. And UberConference is great. But one of the things I love about it, is that the end of each call, it sends you an email, and it tells you how much time you spent talking versus how much time the other person spent talking. And it's funny because I can look at these and it's a running joke. I'll look at these and sometimes you'll talk to someone and say, "I just got off a call. It was great. I nailed it, they're going to definitely buy." And then I'll look at the UberConference call email at the end. Then if it looks like that, I'll say, "I don't think that call went as well as you think." I don't know if we're really ready to make that sale quite yet. And so the number one thing that I hope to impress on you today is sales is about listening. And it's not just about a hacker asking the right questions, it's about genuinely listening. And if you can do that, the rest is easy. It really is. So you've spent all this time prospecting, now you've had your phone calls, you've done a good job listening. And then another thing to know about sales, is there's a lot of steps to the process. Up here, I have a lot of different steps that you might go through in a sales process, calls, emails, pricing calls, sending references, talking with different executives, there are a lot of steps to sales. And up here, these aren't just hypothetical steps. What I've put up here are actually all of the steps from one of my very first deals at Clever. This is one deal, and frankly some of the stuff is kind of embarrassing, right? Like met the person, they were interested, I emailed, no response. I emailed them again, no response. I emailed them again, they responded. Scheduled a call, email, no response. I mean, this is straight up embarrassing. And this is from someone who wanted to buy our product. Isn't that crazy? So one of the things I hope to impress on you is, it is a lot of work to do sales well, and it takes a lot of follow up, and you kind of have to have this inhumane willingness to just keep going and push through. This whole lifecycle probably took about two months, it ended up. We ended up closing $100,000 a year customer, but this is what it took. And I talked to a lot of founders who maybe they have a good meeting, they do a follow up email, and they don't get a response. And they're like, "Oh, well, maybe they weren't interested after all. Maybe it's not a good fit." And they disqualify themselves. Well, just remember, this is what a success case looks like, at least if you're doing enterprise sales. And it's not over till it's over. And it's not over till they say no. But sometimes you do have to remind them, "Hey, I'm still here. Hey, are you still interested?" Because probably your buyers have a lot on their mind, that's not you or your startup. And probably they have a lot of other things going on in their life. And so being persistent isn't rude, being persistent can be helpful, if you do it in the right way, and you're respectful. Now, I will say one thing here. Follow up is really good and really important. But what's also really good, sometimes you get a no. And getting those nos can also be really good and really helpful. Because when you're a small start up founder, small founding team, you've got to figure out where to spend your time and energy and you can't have a pipeline of hundreds and hundreds of deals going at one time. You just can't, you won't be able to do it. And so there's actually a lot of value. My friend Steve Garrity taught me this. There's a lot of value to driving conversations to a yes or no quickly. Because nos, you can move on and start filling the pipeline with other people that could become yeses. So I would encourage you to have relentless follow up, be determined. Don't let things drop but at the same time if you get a no, see it as a blessing in disguise because you can move on to the next deal that could be a yes. Okay, so you've prospected, you've had these great conversations with customers, you've made it through the rigmarole, you've gone through all these steps. Now let's talk about closing. This is an area that is weird, it's foreign. So you have to figure out how to close a contract with a customer who's told you they want to buy, it's harder than it sounds. A lot of deals get messed up in here. So let me just walk you through a few things I've learned. One, assuming you're doing an enterprise contract, you'll need an agreement, and then you'll send it over to the company, and they want to change the agreement. It's a process called redlining. And then their lawyers will send it back to you, and you might look at it or your lawyers might look at it, you might have more changes and you go back and forth in this redlining process. So the first step is you need to have an agreement to propose. And by the way, they're going to expect it from you. When they're interested, they're going to say, "Send me an agreement." And make sure that you have something or you've been working on something so that it's not like, "Oh, I'll get back to you in a month." If you don't have something, I've good news which is if you're not aware, YC has an open source sales template, posted on their website, and I worked on this with James Reilly at Goodwin Procter and some other folks including the Y Combinator legal team and YC decided to open source this. So any of you can use it. Obviously you'll probably need to customize it for your needs, and at some point, you'll want to get counsel, but as a basic starting point, there is a free template that you can use for sales in Y Combinator's website. And then once you're going into this back and forth, I'll never forget it. I have seen some founders let this process drag out for months fighting over the dumbest things. When you are at an early stage startup, when you are trying to get your first customers, early customers are like manna from heaven. And if you don't get them, you're not going to go very far, you're done. And yet, I have seen startups in the early phase because they think that what they're supposed to do or someone gave them bad advice, quibble over the dumbest things. So my advice for you is when you get to this step, especially for your first early customers, they're gonna want to put weird things in the contract with indemnity clauses and warranty clauses and get it reviewed by a lawyer, don't sign anything dumb. But your goal is to finish and move on and just keep that in mind. And if you're going through four or five, six revision processes, you're doing something wrong. So figure out how to move this quickly and don't quibble over small things. Get the first customers because that's what you need to keep going. Okay, another closing trap. You got the customer interested, they want to buy, things look great. And they come to you and they say, "Hey, actually, I want to buy but only if you had this one other feature, would I buy." It sounds so promising. You're so close. They just want one more thing, so you can build that thing. It wouldn't be that hard. Unfortunately, once you start hearing this, in my experience, unfortunately, it is more often a pass than anything else. And the thing to remember is unfortunately, building that one thing when someone says, "Oh, I would buy it, except it's just missing that one thing." If you built it, there'd probably be another thing after that, and another thing after that. And you don't want to be in a world where you're building lots of one off things for customers. Now your first customer, second customer, do what it takes folks. But very quickly, you get in a world where you start hearing this and you realize it's not a good thing. And so two ways I've seen of solving this, one is, well, if you really want the sale and you really want to hold them to their word and have that commitment, say, "Okay, well, I'll build it if you agree to buy the product." Which means I can't demo it for you today, I can't show you reference customers on this thing you want, but I will build it for you if you sign up and if you've spent the time listening and building the relationship and they trust you, that can work.The other thing is you say, "Look, we're going to build what customers need, and we're going to wait till we hear from more customers." And oftentimes I find even in that case, if they still want the product they'll buy it even without that one feature and hopefully end up building what they need anyways. But at least then you're not building something for just one customer. Third closing trap, free trials, you get so close to someone, they're so interested, they're your perfect first customer. And then they say, "Yeah, we just like to try it for 60 days. Folks when you are starting your company and when you are out there trying to make your startup work, you need things like commitment, you need validation, you need revenue, and guess what? A free trial doesn't get you any of those things. And so at every company I've been at, I've never worked at a company where they did free trials. We just said we can't do it. We're spending a lot of time out here trying to find the right customers for our product, just spending a lot of time building the right product, we're not going to give it away for free on the hopes that maybe you'll decide you want it. But we flipped it around and said, "But we want to be reasonable. And we know you're taking a chance on us, there's risk. So we only do annual agreements here. That's how we operate. But if for any reason you're not satisfied, in the first 30 days, you can opt out of the agreement, and there won't be any penalty, you can cancel." And having it that way, where the default is they're a customer, but if something goes wrong, they're still protected, actually it's kind of both parties meeting in the middle and it solves for their concern that they're taking a risk on someone new, while solving for your concern, which is that you need commitment and validation to keep going. And way better to be in a case where they default is that they're a customer than the default is, well, you need to renegotiate something in 60 days from now and you're right back where you started. So to the extent you can avoid the free trial trap. So that's closing. So now you know how I've approached prospecting, how I approached the conversations, how I've approached closing, happy to answer questions on these when we break, but just end on some final parting thoughts. What I've described here is the enterprise sales process I've used going from zero to 1,000,000. First million in revenue, this is the exact process we've used multiple times and it's worked. But not every company, every company is different. And one of the things that I love to encourage founders to think about early is what kind of company and specifically what kind of sales motion are you going to have in the long term? Kristof [Jents] who's a VC, has this really incredible blog post. I just love how memorable it is. But he says, "There's five ways to build 100 million dollar business from a sales perspective. If your average customer pays you $100,000, well then you just need to find 1000 customers and you're done. Or if your average customer pays you $10,000, then you need to find 10,000 customers and you're done. Or on the far end, and so those are your elephants and your deer, on your far end, you have these flies and they only pay you $10, but you need 10,000,000 of them." And so it helps to think about it as you're starting to think about your sales motion, "Well, how much are my customers paying, and therefore how many of them am I going to need to have and what sort of sales motion is going to be sustainable for my business?" Because the way you're selling your product today, is you're flying to people, you're meeting them at conferences, you're doing everything. I described this very kind of high touch high energy sales process, but your customers are only paying you $10 a year, or $100 a year or $1,000 a year and you're going to have to repeat that 10 million times. It's impossible. It's impossible and it's way too expensive for you to build your business that way. On the other hand, if you are successful in building a low touch sales model where you're able to do things, scalably, maybe you're selling to small businesses, of which there's millions, maybe you have some way that people doing self service and sign up, well, then you can be over on the right side of this graph. And you can have a lower price product. But the price of your product and your sales motion are inextricably connected. And that's something that took me a little while to understand, but I thought this graph really helps make clear, is depending on how much are you able to charge for your product, and depending on how much people are willing to pay for your product, that'll change how you approach sales as you're building your company and building your sales team. So those are some lessons I've learned along the way doing sales. I wanted to end and just say good luck out there. You guys are figuring this out. It's the most fun time of your company, you get to have these really energizing conversations with tons of users and figure out if they're potential buyers and good luck, because you'll always look back on this as one of the most fun parts of your journey. So thanks for having me. And I think we have some time for Q&A. Yeah, why don't we start here.
Speaker 3:
Yeah, thank you very much for the talk. Quick question you mentioned about follow ups and so forth. What would be the appropriate time between emails and just so you don't seem overbearing and how long do you think it would take for a typical follow up?
Tyler Bosmeny:
I'd say on average maybe a little under a week. So if you email someone, they don't get back to you, I think it's polite and not over eager to nudge five, six, seven days later. Yeah. Over here.
Speaker 4:
Hi. My name is [Shreys] , I'm the co-founder of [inaudible] . And I always had this sales thing at one point throughout your process did you feel like you were pestering the customers? Because you can't ... You put it a nice way, "Oh you got to keep on going. You got to keep on asking, you got to keep on sending them." Along the process, did you ever feel like you were pestering your customers or not?
Tyler Bosmeny:
Yeah, so the question was, do you ever feel like you're pestering your customers when you send them follow up emails? I like to think that if they haven't told, then you're within your rights to follow up, a reasonable number of times. If you're talking about emailing someone eight times and they haven't gotten back to you, I mean take a hint, right? But I think if they haven't told you know and especially if you had an earlier conversation where they were interested, assume the best, assume they're busy, assume that they've got other things going on. You might not be their top priority. But there's nothing wrong, especially if you're doing it on a weekly cadence or something like that. And your emails are thoughtful and personalized. I have never once in my life been annoyed by somebody sending respectful follow ups, as long as they seem thoughtful and personalized. Don't forget that part. If it's just like I'm getting mail merged every week with another template. I mean, nobody likes that person. Yeah, over here.
Speaker 5:
Hey Tyler. Any thoughts on early on when you're trying to get [inaudible] ?
Tyler Bosmeny:
Yeah, I would say you don't learn about product market fit from ... Oh, sorry. The question was, when you're getting these nose in early sales conversations, how do you know it when they're just not an early adopter and how do you know when you should be reading signs of product market fit or lack thereof? And my answer to that is, I don't think you discover product market fit from the nos, I think you only discover it from the yeses. So I think when you get nos, there's a lot of reasons people could be giving you nos. And I wouldn't even necessarily believe the reasons that people give nos. Because in the same way that you can't trust when VCs give you no, the reasons is, there's just ... People have struggled to be upfront and honest, and everybody wants to be polite. Where you get to product market fit, and when you know have something is when you start hearing yeses. And so you just have to try, and if you can't get any yeses, well there's your signal that you don't have product market fit. And if you can get yeses, there's your signal that you do have product market fit. And I think that's all that matters. Yeah. Here.
Speaker 6:
Hi, So while early on and you're prospecting for your first clients, you need to get your first signed agreement for your products. What is the importance of reference customers in terms of, would you prefer going after big brands, big names, even if they require far more work than going for companies that are [inaudible] we can close a deal [inaudible] ?
Tyler Bosmeny:
Yeah, that's a great question. It is how should you prioritize big companies, which would be amazing names and logos, if you had them as reference customers or small companies, which might be faster. I think about the advice YC gives for investors, which is to do a breadth-first search, meaning optimized for speed and optimize for, I would say talk to all those companies, talk to the big company, talk to the small company, but then you'll know which ones can can move quickly and not. And optimize for speed. A customer is better than then no customer. And the big companies are never the great references, you imagine necessarily. I would go for who needs your product the most and who will move quickly. And the reference stuff and the logo stuff, I don't think you have to worry about that in the early days. You're just looking for validation and customers. Yeah. Over here.
Maryanne:
Hi, Maryanne, [inaudible] . I'd like to hear about your pricing journey. We are interested customers but we're beginning to now get nervous about the pricing. So, wanted to hear about your journey, [inaudible] did at sales at the UCLA [inaudible] .
Tyler Bosmeny:
Oh, nice. Oh, great to meet you. So your question was about the pricing journey. Yeah. And how to set pricing? That is a hard question, because it's so specific to every company. I'll tell you what we did at Clever. We guessed and you get feedback. It's actually kind of neat. You get feedback from the market pretty quickly and in the early days, you can iterate. Patrick McKenzie likes to talk about how most startup founders need to charge more, and will usually guess too low. So maybe one strategy for guessing would be to guess a number that seems reasonable to you and if you can close that sale, try doubling it the next time and if you can close that sale, try doubling it again. It's really hard to know what customers will pay. But I'll tell you that original deal I mentioned for $100,000 that we closed very early on. Why was it $100,000 and not half of that or double that? It was just us doing a little bit of this and guessing. But we got feedback and iterated from there on the pricing model. So I think you just got to try things, be bold, whatever you say, you got to believe it, "This is the right price for our product, there's no other price that would be fair for this thing." But then quickly, be willing to iterate as you get that feedback. Yeah, no problem. In the back there. Yeah.
Speaker 8:
Yeah. What do you suggest for subscription-based businesses like [inaudible] ?
Tyler Bosmeny:
I'm not sure I understand the question.
Speaker 8:
For the subscription-based startups.
Tyler Bosmeny:
Yeah.
Speaker 8:
[inaudible] . Any new customer, if you just rely on the marketing, they don't have [inaudible] and then rely on marketing or how [inaudible] ?
Tyler Bosmeny:
Yeah. So the question is, if you're talking about a $50 price point for a product, early on in a company's journey, how do you bootstrap a sales effort around that? I mean, if you're talking about a $50 product, even $50 per month, basically you probably shouldn't do any of these things. And you shouldn't set invest in a marketing function, because you are going to need so many customers and you can't do it in a high touch way. So, I look at things like demand generation and email campaigns and self service signup flows and referral codes and things that companies at that small price point have to do to be scalable, or raise the price of your product to support true sales, either way. But that's probably how I'd approach it.
Speaker 8:
[inaudible] .
Tyler Bosmeny:
Yeah.
Speaker 8:
So there's nothing on your website, so to get the first customers-
Tyler Bosmeny:
Why isn't there anything on your website?
Speaker 8:
[inaudible] .
Tyler Bosmeny:
There's no product. Oh, other than the product. That's something. Okay. Sometimes founders do this, he said, "But what if there's not enough case studies on our website for people to come buy?" A lot of founders think, they know it's never enough. Whatever they have is never enough to get people to buy. If they had one more reference account, if they had a few more case studies. That's what it would take for people to buy. Guess what? If you go on the Wayback Machine for clever.com from 2012, we didn't have any case studies, we didn't have any customer testimonials. All we had was a page that described the product and that was enough to get. For people who had the need, they didn't care about any of that. They were like, "Oh, finally, someone's build a solution to my problem. Great. I will run through walls to get it." And we didn't, maybe we have some of that stuff five, six years in, but we certainly didn't have it at the beginning. So, yeah, over here.
Speaker 9:
On your way from mathematician to expert salesperson, what's resources did you find the most useful?
Tyler Bosmeny:
Sorry. One more time.
Speaker 9:
On your way from mathematician to dope salesperson what resources did you find the most useful?
Tyler Bosmeny:
Oh, what resources? Yeah, the question's what resources have I learned in doing sales? Well, first there's no substitute for doing it. I've read a number of books on sales. I've watched things online. 95% of what I've learned has just come from trying it over and over again. And actually, it really appeals to the math and statistics side of me because you kind of get to EB test everything. Yeah, you try something new in a conversation, "Oh, that didn't really work. Okay, I'm going to try something again." You just get to iterate over and over and over again. And so that is the number one way to learn sales. There are some books, there's this one that I love, it's called, How I Picked Myself Up from Failure to Success in Selling. It's from the 1950s and it's written in this hokey, corny way. But it so beautifully encapsulates the journey of learning sales and some of the hustle and things that I was describing as part of it earlier. So that's one resource I've recommended to founders. But really, you just got to try it. Okay, last question. Yes, you look like you have a question.
Speaker 10:
So you told us about how you started [inaudible] your sales, but can you tell us about your first few hires? Or your [inaudible] sales team, how did you promote them, [inaudible] ?
Tyler Bosmeny:
Sure. Hiring salespeople, first of all, you have no business hiring salespeople until you've done a lot of sales on your own. Could be good. And the reason is not just because of what I was saying earlier about how you know, good you are, it's because you won't even know what kind of people to hire until you've done a lot of sales on your own. You won't know what the core skills are. Is it traveling a lot? Is it a lot of phone calls? Is it a lot of like really good emails? You just won't know. Once you have done sales for a while, the good news is you'll know exactly the kind of people that you should hire and typically that's how I've done it. So I've done sales by myself for three, six, nine, 12 months, made it repeatable to a degree. And then there's literature out there about what you want your first sales reps to look like, and oftentimes a term that's used, Renaissance sales rep. And that's kind of differentiating from the coin-operated sales rep. Coin-operated meaning they need everything, they need every piece of collateral, every playbook, every script but then they can go out and execute on it just relentlessly. On the other side of that spectrum you have the Renaissance reps, what you needed to start up. And these are folks who don't need a lot of direction, don't need a lot of playbook and they just love figuring things out and probably your earliest trap, even at Clever today were renaissance, but bigger companies will have much more on the other end of the spectrum. And so you want to look for those renaissance players who really love to learn, oftentimes they'll have some industry expertise, but maybe not too much. You probably don't need the person as your first salesperson who has just ... You probably don't want someone ... Don't be too blown away by 50 years of experience. Not that that's bad, but you can probably get away if you have the hustle and the grit. That's what's most important at this stage, more than experience and so, yeah, those are the things I look for. So a lot of energy, a lot of passion, kind of that renaissance sales rep mentality and then pattern matching to what I've been doing in the sales process if they have those skills. Great. Thank you. Thanks guys.
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