7 Minutes of Unconventional Wisdom - Stephen Allott at SaaSGrowthLive
Welcome everyone to seven minutes of unconventional wisdom, and I'm going to talk particularly about early stage seed and scale up and how conventional wisdom which we've heard earlier today, how do you interpret that when you're trying to scale your organization. So you'll hear people talk about after product market fit go get some leads book demos to get a trial, put the forecast in your CRM use sales meetings to get the reps to commit, deals getting stuck in legal is normal, customer success have to upsell an ROI to the customer. Now as I was learning conventional wisdom and trying to apply it to the seed and early stage in our two or three hundred companies we got in the Seedcamp portfolio, certain questions kept on coming back to me people wanted to know about lead-gen wasn't working and trials weren't closing. So when is all this conventional wisdom wrong and when is it right and a lot of that is to do with the scale of your company, what stage you're at.
So things change according to how big you are, so I had to come up, to explain where to look for leads, I had to think about how do things change as you grow so I invented this idea of a three-act drama: a SaaS company goes through firstly search as it gets it looks for its first 10 customers then it starts to focus on some markets and it starts to scale. Once you understand this model things start to fall into place about how you should do things differently as you as you grow. So what's your ideal prospect profile that changes as you move through these three acts. Your lead-gen tactics can evolve from spray and prey to missionary to traditional sales and marketing. And your lead-gen goal evolves from finding pains to mission reselling initiating projects and intercepting projects. The other thing is we've heard is the mix between sales and marketing here's a tool that we produced at Seedcamp which tells you how much of your lead-gen effort should be marketing driven, and how much should be sales driven; I'm not going to read it through you now you can find it on my blog, but use these eight factors get the sales and marketing mix right, then you can use one of our companies dream data will help you optimize.
So instead of just going getting some leads, think about the scale you're at, pick your focus and then go forth and educate the market. Then people come to me and say they can't close trials - this is the biggest problem that I keep finding and you can see here my sales tales blogs, it's the most popular blog. Setting up and closing trials is integral to the sales process, you can see here in in the red circle, trials crop up all the way down the sales process, and what I keep finding is technical founders build a new product they're totally in love with it, it's their baby and they want to do the puppy dog sale, so I'm going to tell you the story about the cat here. I was looking for a puppy picture to put in this blog I found the cat picture and was really fell in love with its eyes, so this is about instead of doing a puppy dog sale, talk to the customer, don't show up and throw up, but talk to the customer about their project what are they trying to build, let them build their own baby, understand what their success is going to be like for them and work from there. So let them build your own baby is is the unconventional wisdom.
Moving on to the forecast, I've always found that it's far too complicated using the CRMs at early stage. I just use a simple spreadsheet like this, put in my probability to close and factor it and that gets you to the figure 270 on here, are we going to make our target or not. And then the deals we're mostly focusing on in green will if we close them we'll make 220. It's that simple, it's quarterly, it involves closed month ambiguity manager assigned, probability means you've got to to scrub the deals it's quick to assemble so don't get bogged down in your CRM sales meetings now we've all we've all been in meetings where that brutal sales manager terrorises the reps try to get a commit. What we do is try and use them for building teamwork and improvement ideas. I call it mixing the best of east and west focusing both on not only the individual performance but the team.
Stuck in legal - I'm going to tell you a quick story about sun my first career was as an in-house lawyer. I was the first lawyer hired by some microsystems outside the US. When I arrived it was in the late 80s, there was a stack about two-foot high of contracts that needed negotiations and the sales people queued around the block trying to get me to do their deal. First there was no way I could handle all these, so in a moment of inspiration I thought well we're going to sell terms to customers not negotiate them they can have extra liability if they want if they pay for it. So I quickly went through this pile of contracts came up with some pricing through each legal adjustment in the form of a kind of an adjustment to the discounts, and Ididn't find a single customer who wanted to pay more for legal terms so we got rid of all that so you can give the customers any terms they want for a price.
Customer success we've been hearing earlier on today from Aaron about specialisation, but what works at early stages goal customers assess on reference-able customers. Good references drives new business, they drive your reference selling. What's the definition of a reference; there's 12 possible definitions on this chart here. So the one that matters is will they take a private reference call or accept an email from a prospect. And finally ROI is for the customer. So we use this rosy tree and do an ROI discovery workshop with the customer this is actually a picture of a google sheet which you can fill in jointly with a customer, and you use this rosy tree as a checklist to identify every sort of business benefit that the customer might get from using your product. And you can see on the top branch return is basically profit which is revenue less costs they can get more customers or they can get more revenue per customer which is more products per customer and more revenue per product. Use this as a as a comprehensive checklist to generate your business case.
So we're nearly done with my seven minutes of unconventional wisdom, so pick your focus based on how big you are and then go forth and educate. Don't show up and throw up, let the customer build their own baby. For forecasting one page google sheets all you need. Use team sales meetings to drive improvement and teamwork. Offer the customer any time they want for a price and they'll probably turn you to say no. Target customer success and reference ability and ROI grows on rosy trees so show the customer the trees. And if you want to know more I've got my blog series on medI there's 14 sales tales published there already take a look all the material I've shown you now is in, there I'd love to hear your feedback and improvement suggestions.
So that's my seven minutes of unconventional wisdom.