Closing your first deal is one of the most energizing startup milestones. At the same time, the journey is unpredictable, counter-intuitive, and time-consuming.
This series will explore strategies founding teams can adopt that will dramatically increase your likelihood of closing a successful first deal, while reducing stress and frustration.
To start, understand the typical sales cycle. A simple web search returns dozens of different sales cycle frameworks. In practice your first deals will go through a three phase process:
In this first post we will cover Discovery.
The discovery phase for an enterprise solution starts with a 30 to 60 minute initial meeting. It is generally then followed by one or two sessions with a broader team to go deeper into your solution.
For the prospect, the goal is to understand a) what your product does, b) how it is different from existing solutions they understand, and c) determine whether it’s a fit for a pain point or need they care about.
Your goal is to figure out what need you can address. You need to identify your internal advocate — a “champion” — and create excitement and personal connection to your vision and you as the founder.
You also need to determine whether it’s worth spending time with a prospect. The most valuable learning is the insight that a prospect is not a fit and you should move on.
At first glance your and their goals are aligned and should naturally converge… easy!
Not so fast. In the real world, three things work against those goals:
1) Talking too much, not learning enough
2) Failure to touch a nerve
3) Lack of a personal connection
Have you had a first meeting that runs over, but when you wrap up, you find that your notes are blank? Left on their own, prospects are often happy to listen and ask questions, without sharing the critical insight you need.
It’s up to you to lead the engagement and make it interactive.
Ear to Mouth Ratio
You have two ears and one mouth, strive to use them in that ratio. Consciously manage the interaction to ensure that the discovery is bi-directional from the get-go.
For a first meeting, target at least one-third of the time to eliciting feedback from the prospect. This will require you to force yourself to stop and ask questions. If you have multiple people from your team in the prospect meeting, choose one to pause the presenter as needed and keep it interactive.
Sales Pro Tip: Finish Your Answer With A QuestionProspect questions often emanate from a pain, priority, or misconception. If you provide an answer to their question and move on, you can miss an easy opportunity to learn. Try adding a clarifying question to the end of your response.
“Tom, good question. We don’t currently support that use case. Would you mind sharing why that would be relevant at MegaCo?”
A great initial meeting will have a natural flow that opens with you asking three or four discovery questions, and then within your presentation, additional prompts every several minutes to seek response and feedback at natural break points in the presentation.
The big challenge for a prospect is to find differentiation and connect it to a relevant problem they need to solve today.
There are dozens of other products out there to try — why should they spend time with you?
You need to touch a nerve to break through.
You will touch a nerve when 1) a tangible, unmet need is met – your product solves an important problem today and 2) your vision unlocks a transformative improvement in the future.
Opportunities where these two elements are balanced are more likely to make it to the finish line; strive to find both.
Close the Knowledge Gaps
To do this, you first need to uncover a current unmet need and a desired future state. Then re-frame back how you can help in an eye opening and compelling way.
Be systematic about your discovery. Prior to important meetings, set internal prep calls to go over gaps in the understanding needing to build a compelling case for your product:
Great discovery is also identifying that the combination of need and the desire to address it are not there — spend your time elsewhere.
Sales Pro Tip: Revalidate and Extend What You LearnAs you progress through the Discovery process, re-validate what you’ve learned and ask questions that extend from it.
“Anil, last time we talked you mentioned the automation use case would likely be the most relevant for you. Is that still your thinking? [prospect answer] Great. We are interested in whether this would also be relevant for your AWS environment?”
It’s a powerful technique that reduces misunderstanding and uncovers nuance. Initial learnings are often incomplete, and it’s a great way to clarify. It also demonstrates to the prospect you listened to what they said, and have relevant questions that build on it.
For a prospect, putting their credibility on the line by championing an unproven, likely-to-break, incomplete solution is not rational. It’s about their passion for your vision and relationship with you as the founder.
In the same way you feel deeply and personally connected to the people you recruited to your company, you are asking a prospect to make a personal and professional bet on you.
Tell Your Story
Start in the first meeting. Take them you on your journey; convey the unmet need you saw, the lack of credible alternatives, the calling you felt to start your company. Let your passion and humanity come through. Building a company is incredibly hard, and you do it because you have conviction that this will change the world for the better.
Look for opportunities to make your prospect feel like the extended team. Seek their ideas on vision, features, positioning, pricing. You’ll get both useful insight and someone who feels connected to your success. Thank them regularly and authentically.
Sales Pro Tip: Closing Starts in the Discovery PhaseClosing a deal starts at the beginning of the process. The first step is to make clear that your end goal is to have them buy your product, and gauge their reaction.
“Jane, thanks for another productive session today. One more topic I wanted to raise. My end goal is for you to buy our product and make you a happy MyCo customer. There’s a number of steps between today and that point, but I wanted to confirm that end objective makes sense to you.”
What and how they respond to this question will generate insights and more questions for you.
You’ve balanced the interaction, closed the gaps, and developed a strong connection, earning the opportunity to showcase your product in their environment.