Some Practical Advice For Getting Profitable
Ted Rheingold at Dogster has a great post up titled 10 Tips for Building a Profitable Business. My favorite is #4: Spend at least 50% of your time selling.
Many technology companies assume if they built great product it will sell itself yet that almost never happens. Usually we’ve found that incorrect assumption is a rationalization of people who love building product, but secretly loathe the business side of running a business. Such a strategy is a great way to lose a lot of money. So constantly ask yourself, are we spending 50% of our time selling? I bet you’ll always realize you’re focusing too much on the product and not enough on finding customers that want it. (Of course the inverse is true. If you love selling you need to make sure you spend at least 50% of your time building product or your sales effort will be for naught.)
In most companies, too few people sell too little of the time. If you are a member of the senior executive team of a company that is trying to become profitable, are you spending 50% of your time selling and generating revenue? If not, why not? And, if you have a board of directors, are your board members selling also?
I think it s a brilliant analysis of the issues with driving a startup into profitability. As someone who is building a product and hoping to get backing to launch, I acknowledge that my weakness is definately in the Sales area. I can talk the talk, I can present, and I enjoy it, but I can't do the follow through and the business backing. I do so love the code though, and I think I have a great product, but as you say, just having a good product isn't enough.
I'm always looking for advice about how to find a good team, particularly pre-funding. I have several folks who have volunteered time to work with me (one of which I consider a world-class technologist), so in that way I feel fortunate – but how do you build a product to completion and also build up a business case and seek out funding?
Such a challenge.
Brad- being a "sales" kinda guy, i love this. During the dotcom bust, I came to appreciate pretty quickly that the further you are away from the "dollar," the more likely you were to not have a job anymore. After I got beat over the head with that for a few years, I decided that I'd get as close to the dollar as I could handle — I'd start generating them.
If you're an entrepreneur and you're like I was (you think "selling" equates to being a used car salesman), break yourself of that. Selling is fun, helpful, informative, etc.
Plus, once you learn to love "the close" – you'll find yourself addicted. And then you'll spend 90% of your time selling.
(note: if none of this rings true, you really are an engineer and better find a "sales guy" to be CEO and quick.)
Eric – I'm just beginning to "get" the sales thing. Like you, I've always equated it to used car sales. Of course, I'm also a huge introvert; gotta work on those people skills. It'd be cool if you could blog about how you came to love "the close."
That is a Great post! Much better written than I could do. Coming from Wharton, I've been on every Dean there that we don't talk about selling! Its like an Engineer not talking about building! Its too easy to get academic and not think about it…classic those who do, do, those who don't teach (sorry professors) It was the biggest lesson I learned in the real world and I should have learned it faster……I had a huge lawn-mowing business as a kid because I SOLD. Use us for vacation….hey now that you're back just use us one more week……customer for life. In most businesses people forget its easier to sell than it is to raise money!
I like every other post including the one about office space/furniture. The second I have somebody come to our office and not admire this mis-matched furniture I know they are a loser.
couldn't agree more – and yet – the marketing & sales functions are often not given the respect they deserve in startup land- hmmmm
Absolutely agree. But, commit to selling, decide that "sales" isn't a pejorative, get out and talk to prospects – and you're only halfway there. The next trick is to build a sales process that makes you both efficient and effective at selling, and able to manage the sales function like you manage the rest of your business.
This post should get twittered Brad. The best way to get product knowledge is to (drum roll please) talk to clients and prospects. One to find out what they want, two to hear what other providers are doing, three to find out what not to do. Plus talking out your value proposition with real people – not your board or staff – makes it real, real fast. Get out and talk to customers and prospects. If 'selling' makes you feel dirty, just think of it as a form of small focus group product research!
Viewing time as an investment is valuable to becoming profitable as well. All of the time and effort put in are for gains, just as in investing in a stock or bond.
late to the game on commenting on this — but one of the reasons I love being a burger franchisee alongside being a tech entrepreneur is that the lessons from one definitely apply to the other
I fully expect to have you on my next meeting with Cisco!