Startup sales extend beyond prospects, leads, and closed deals. It’s about gaining a deeper … [+]
Being an effective startup salesperson doesn’t mean adopting an “always-be-closing” approach or resorting to aggressive tactics. As an early-stage startup founder, your focus should be on understanding the difficulties and problems of potential clients to achieve product-market fit.
Making money is only half of the sales job; the other half is aligning your offering with customer needs.
1. The Unique Nature Of Early-Stage Startup Sales
During the discovery and validation phases, the primary goal of a startup is not revenue growth but finding a good product-market fit (PMF). While growth and PMF are not mutually exclusive, PMF must come first. Attempting to grow without PMF leads to unsustainable growth. Convincing people to buy solely based on sales skills results in a poor customer experience and low retention rates, hindering organic growth.
In the early stages, your priority is not to close sales but to identify the real problem faced by potential customers and tailor your offering accordingly. Initially, it may feel like you’re pushing your product onto people, but the aim is to adjust your offering and target customers until you feel a pull from the market—where your product solves a pain point and generates excitement.
2. Start Selling From Stage Zero
One of the biggest mistakes startup founders make is delaying sales until later stages. Building in isolation increases the risk of developing something that nobody needs, which is a leading cause of early-stage startup failure. To avoid this pitfall, you must engage with customers as early as possible. The best way to validate your direction is to attempt pre-sales before building anything tangible. The typical steps are as follows:
- Define your offering and test it by directly contacting a few potential customers who align with your target market.
- If the feedback is positive, create a wireframe prototype and a landing page with an explainer video showcasing the prototype.
- Offer a pre-purchase button with a significant discount.
- Do pre-sales both online and offline.
If no one is willing to buy your product even with a substantial pre-sale discount and personal attention, it’s unlikely they will purchase it when the product is ready. By making this discovery before investing time and money in development, you save valuable resources.
3. Creative Strategies To Incentivize Purchases
When selling before your product is fully built or with an incomplete prototype, some potential customers may prefer to wait until it’s ready and tested. However, this shouldn’t discourage you from making early sales. While there will always be cautious individuals, there are also early adopters who embrace new products for various reasons.
Offering a generous discount is an effective strategy to incentivize early adopters. Additionally, you can employ creative tactics such as creating a sense of scarcity by limiting the number of pre-purchases. This approach has become increasingly popular among startups, as exemplified by Clubhouse, Superhuman, and Hey.com.
The invite-only pre-purchase strategy benefits both early adopters and the startup. It encourages early adopters to jump in while minimizing potential refund requests if things don’t go as planned. Moreover, managing a smaller number of pre-purchase clients enables personal interaction and valuable qualitative customer feedback.
4. Tracking The Right Metrics
In early-stage startup sales, revenue is not the sole focus. For example, it’s a good idea to measure the usage of your product while gathering feedback. Identify the features that are most and least used and understand why.
You can also monitor whether your early adopters are generating inbound leads (i.e.measure a net promoter score). If they are, it’s a positive sign that you’re close to PMF. If not, investigate why people aren’t enthusiastic about sharing your product.
Startup sales extend beyond prospects, leads, and closed deals. It’s about gaining a deeper understanding of your customers and tailoring your offering to meet their needs. Sales are a vital part of achieving product-market fit, which is crucial for early-stage startup success.
