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Marketing and Selling: A Classic Mistake Entrepreneurs Make |
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By Terry Collison, Blue Rock Capital. Used by permission. In working with a wide variety of entrepreneurial companies over the years, I have seen start-ups do it, I have seen entrepreneurial wannabes do it, and I have seen presidents of companies with annual revenues measured in the millions do it. It is conceivable that a venture can get by without outside venture funding. But the one component that a growth-oriented company absolutely cannot do without is... customers. (For a seed-stage company, your first "customer" is your first outside funding source.)
How does "Selling" really happen?
Collison’s Axiom of Selling is "‘Selling’ isn’t
happening when your company is talking; ‘selling’ happens when your targeted
prospect is talking." "Why, yes, of course," reply company founders
and workshop participants I meet across the country. Here’s a field report on
what really happens.
The eager entrepreneur has gotten an opportunity to meet with a potential corporate partner, customer, or funding source. The entrepreneur understands that the natural form of such meetings is for the entrepreneur to "go first" and to provide lots of information about the venture’s development work, its capabilities, and its special insights about the market, etc. The other party is not on the spot to reveal very much about its own program. The prospect may provide such information because it needs to be sure that there is a good "fit" between its interests and needs and those of the entrepreneurial company. At this stage, the driving issues may not be strictly, or even primarily, financial. Your prospect may be considering potential synergy with an existing product (or, for investors, synergy with a portfolio company), a need to diversify into a new area, a compliance or regulatory issue, or some other linkage that you couldn’t possibly know about in advance. What you do know is that the other party would not be meeting with you unless there is some potentially beneficial basis for doing so. But you can’t understand what that is until the source actually communicates the information to you (and you recognize the information for what it is). You need to understand how that can happen most effectively. Imagine that the entrepreneur’s presentation has been clear and interesting. Then picture the prospect, impressed, now starting to make its own comments. Then picture the entrepreneur literally interrupting in order to provide additional detail about the entrepreneur’s own efforts. For a complete image, picture this happening not once or twice but for an entire meeting. An unnatural act for entrepreneurs
"Give interesting information and then
listen.
And learn." It sounds like easy counsel to follow, right? Unfortunately, many
entrepreneurs find it difficult to put this advice into practice on a consistent
basis.
In a classic "sales" situation, it is the prospective customer that can actually "teach" the salesperson exactly what the hot-buttons are that can lead to sales success. No one understands the targeted customer’s needs as intimately as the prospect herself or himself. Entrepreneurs survive by being enthusiastic about their ventures and by being committed to promoting their concepts unceasingly. It therefore seems unnatural for entrepreneurs to equate "being silent" with "actively promoting the venture." To see the difference, try it both ways and judge for yourself. Which way gives you results that you can actually use? In terms of your company’s selling success, which way is associated with the higher "realization rate"?
TERRY COLLISON is a co-founder of BLUE ROCK CAPITAL. Previously, through 11 years of work as an advisor to entrepreneurs, young companies, and investors, Terry helped a wide variety of companies develop commercialization strategies, management teams, marketing programs, formal business plans, and new financing. BLUE ROCK CAPITAL makes venture capital investments in high-growth seed-stage and early-stage companies from New England to the Carolinas. |
