March 7, 2016
I have spent the last 25+ years starting, running, mentoring, and investing in digital technology companies. Just the other day, an entrepreneur asked me a simple question:
“What is the most costly mistake you see first time founders make?”
It took me a minute to think about it, but then it felt like the clouds parted and the answer was so clear: customers.
It’s all about getting customers. You may have a great product, but without customers it’s just a product; with customers it becomes a business. As entrepreneurs, we like to be in control – we can control the technology, we can control the UX, we can control what the product looks like – but none of that matters without customers.
Customers are difficult; they have needs (and each with seemingly different needs), they are too busy to look at your product, they are not smart enough to see the value, etc. – there are a thousand excuses. But, these are all the entrepreneur’s problem, not the customer’s.
So, how do you – as an entrepreneur – get better at solving for this?
Start with the Problem
Every business should start with a well-defined problem that it is solving. Hopefully one with lots of pain for the customer as the more pain you can alleviate, the more they will want your solution.
Validate the Problem
This is where you need to do a lot of customer discovery – talking to customers, understanding where the real pain is and making sure you understand it.
Work on Building Solutions
You should have a series of low-fidelity prototypes that are used to help validate what kinds of solutions customers feel are most effective. This is where the “do things that don’t scale” phrase comes from. It’s not important how efficient you are, just that you identify a great solution to the customer pain.
Communicate the Value You’re Creating
Sorry, but there is no way around it. You need to be able to communicate the value you are creating and, well, that’s called sales. Sure, if you have a B2C product, you may get more leverage out of marketing, but that is just one to many sales; you need to be able to sell.
Entrepreneurs today know how important product-market fit is. We have meetups on lean startup methodology, and talk about our MVPs and pivots; it’s all part of our lexicon now, yet we still have yet to acknowledge just how important the sales process is.
Good entrepreneurs are always selling – they are selling investors, customers, and even potential employees. It’s one of the most valuable skills an entrepreneur can have…and the single one that most do not. Selling takes skill and discipline. Both require a lot of effort and practice. Unfortunately, one article will not make you a sales master. But it might open your eyes to a set of skills that you can acquire and then (hopefully) master.
I like founding teams that have sales in their DNA. It sounds so obvious as I write it, but so few investors filter for it: companies that can acquire and retain customers have a measurably increased likelihood of success. It is that simple. Imagine two startups: one with no sales experience on the founding team, so they hire a hotshot sales person; the other company already has a hotshot sales person as part of the founding team. The first company hires the sales person, but when sales do not start rolling in, what do they do? They fire the sales person; they need to find a better one, obviously. The second company sends their founder out and she can’t sell the product, what do they do? Do they fire the founder? No, the founder comes back and gets development to fix the product. This is a fundamentally different dynamic. This is the feedback loop of successful companies.
So, if you don’t want to make the most common mistake I see first-time founders make, you need to make sales a priority. You, as a founder, needs to embrace sales as your path to success. This might mean finding a great sales person to join the founding team, or you might find it is so important that you want to own it – to become that driving force that separates you from your competition. It’s amazing how real customers and real revenue will change your business.
Need more help? Read how these different entrepreneurs gained their first three customers – and how those initial steps led them to more sales.
Editor’s Note: Troy Henikoff a serial entrepreneur and managing director of Techstars Chicago. Techstars is a three-month, mentorship-based accelerator with 23 locations across the globe. Techstars is currently accepting applications for its next class until March 20th for Chicago (and a few other cities). You can apply here.
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