The Startup Sales Person Analogy

I was recently asked by someone to help him to understand what makes a good salesperson in a start-up.  I thought to myself about the differences in sales people.

An incumbent sales person is a relationship sales-person…they work on a relationship for a long period of time.  Their goal is to keep their customer from looking somewhere else. 

A start-up salesperson must defeat incumbents not just other startup companies – trust me incumbency is the hardest thing to beat.

So I told this inquiring person the following story –

“You get to college as a freshman and get put on a coed floor in a dorm. 

Down the hall there is a really cool girl…she is a year older than you, she is funny, pretty and smart…suffice it to say she is the object of your desire (as well as the other 10 guys on the hall). 

Problem, she has a boyfriend (let’s call him the incumbent vendor)…. She has a relationship and she knows what she gets from that relationship (it is safe)…it may not be the best product or service but she knows what to expect.

Your task is to make her think that with you she can dream new dreams… a life better than she has or would have with the existing relationship. (You have to displace the incumbent vendor!!!)  You also must be there in the correct ways...to keep other challengers away.  You must establish comfort and trust! 

It takes time – you ask questions – you listen – you have deep conversations that get to the “essence” of a better situation.   You highlight how you may be the answer to her new and improved dreams…

You go to a college party and you get up your courage – you tell her how you feel (you ask for the order).   Most likely she tells you she has to think about it (evaluation)… You come back with an alternative – a trial – “friends that kiss”. 

Over about 30-90 days she tests you in new ways…sometimes she throws it all at you at once…other times she barely pushes your limits… at some point the limbo is killing you… you ask for the order again. 

You have done it…she agrees to drop her old boyfriend… you won (the deal) – you are now the guy (vendor) of choice.  But now you still have to wow her (incredible support) and you have to make sure you under-promised her dreams and then over-deliver.

Don’t screw this up…she is that special!!!

The guy looked at me a bit strangely and said – “wow” – Now I understand – “a startup guy has to unplug others equipment to get his in” !

I said “wait till you go to a sales club with me”  -- you will fully understand!

By the way – I married that girl.  And like a great client she teaches me something everyday…and has enabled me to reach new heights.   

Over Confidence - Your still a pimple on the ass of an Elephant

Imagine sales traction is starting to build as your company is going from 1 million a quarter to 2.5 – 5 – 7 – 11 in sequential quarters... I bet you can imagine the way the sales team was feeling – the way I was tempted to feel:

• We are invincible!
• We are taking market share!
• No one can stop us!

     …so what is any self righteous, paranoid sales leader to do but show the following picture at his sales Kickoff. I titled this slide – "We are still a pimple on an Elephants Ass".  

Do you think my sales team got the meaning from the picture?

Despite our success we were nothing but a small annoying abscess, one that may be easily treated by another medicine from a potential competitor. 

What I was hoping to convey was that every success should be enjoyed but we are at the tip of the iceberg .  Not getting ahead of yourself is critical in building a team dynamic in an emerging technology company.  

Great, we have become a pimple -- but we have not changed the world – YET!  

The Team is Everything - Schneider on Leadership

What is good leadership?  It seems to be one of those ideas that falls into the realm. . . “you know it when you see it” . . .or in my case when you feel it.

My version of bad leadership includes the word “Me” or “I” verses “We” or “Team”.  I think bad leadership equals not being responsive to your team’s feedback. 

Good leadership will allow you to build a culture that tells you when you have a problem. A good leader is someone who is consistent, non-biased, responsive, selfless, and sets an example in all that they do.   

Unfortunately in our world we have too many leaders who send inconsistent messages. 

I am not sure that I am a good leader, but I tried to always be fair and most importantly, I never asked anyone to do something for the company that I was not willing to do myself.   It is my belief that a leader is not afraid to listen and to learn.  I often tell people,  “I was smart enough to figure out a way to recruit you…now it is your turn to teach me what you learn everyday.” 

A good leader understands that the TEAM is everything!  

There was a moment when I was speaking to my sales team at Data Domain during an annual kickoff meeting.  I looked out at the team of individuals and reflected on what we had accomplished the last 12 months (I think at the time we went from 50M to 150M)…Here I am, a 40yr. old executive, a 6’4” 250lb man, and I just started to cry.  God, I felt like such an incredible wimp…but what I saw was just awesome.  A group of people who thought more of each other than themselves – a group of people that answered my challenge of growth and exceeded my expectations.  Specific stories of individuals ripped through my head – I noticed a rep. that I had worked with personally during his first 6 months at the company and had sold nothing -- and now he was our rep. of the year and whose income was over a million dollars (imagine how much he sold)…and felt the stories, the passion, the trust and the power of the team. I often look back at that moment with a sense of pride…not in me, but in my feelings for the team.  I recognized that this team was a reflection of me…and I of them.  Is that a good leader? – I don’t know.  But I can tell you…most of the people in the room that day cried also.  What a moment!  I still think I am a wimp – but when I stop feeling - I stop being an effective leader. 

In the end I believe a good leader needs to be proud of his / her team…and in turn, the team needs to have the same pride in their leader.   

As I consider my role, these are some of the questions I ask myself everyday:

-       Would I want to work with / for me?

-       Would my mother be proud of me for doing “x” or “y”?

-       Am I fair?

-       Am I doing this for me, or the team? (Ok to answer yes to both…)

Your answers may vary on a situation to situation basis, but in general they served as my touch stone in reminding me of who I am, and who I want to be, as a person and as a leader.

You need the Navy Seals

Behind Enemy Lines:

The battle fought by a startup technology company is guerilla warfare.  The thought of attacking where the enemy is weak and not strong has already been discussed…but our reality was the early sales teams in young companies are non traditional warriors.  The company had 2 SE’s and 2 Sales people when I showed up…one of the sales guys had been there 4 days longer than me – I was lucky Frank Slootman hired Matt Jacobs…he ended up being the guy I wished I had more people like.

When I started to my initial profile was very wrong:

-       storage sales experience 3-5+ years

-       major account selling experience

I was looking for infantry people…

Oops – what I needed was the Navy Seals of Sales…

-       sales experience and success for a non branded company

-       Intelligence

-       Independence

-       Creativity

-       Strong communication skills

-       Channel loyalty – the channel needs to already know them and trust them

-       Warriors

-       People with a “chip on their shoulder – something to prove” 

-       Stamina

-       A willingness to be part of the team


When the Navy Seals go in behind enemy lines they must be creative and fight with everything in their packs...it is hard for them to radio home and ask for more features/ tools.   They have what they have - just like an early sales person.  You must sell what you have today. 

If any of you are looking to build a great team – find one of the Data Domain hires – especially the earlier guys in 2004-2008.  

Cell Division – Splitting Regions in Hyper-growth

    

Great sales people are control freaks – they are also very territorial.  Like a male Elephant Seal they will defend their territory and breeding rights with a lot of noise and a fight. 

Yet – to grow you must establish the correct coverage map that insures that your company will be able reach the (TAM) Target Available Market at a reasonable cost structure.   If you practice cell division correctly the Embryo of your startup company will grow into a person and then reproduce on their own…if you get it wrong…well... you know what happens.

When is the right time to split a territory? 

-       The number of opportunities being worked (forecasted) is greater than the ability of a team to accurately cover them

o  Regular sales forecast reviews or visits indicate a lack of coverage by absence of specific information

o  Deal loss rates increase

-       The revenue you believe you can get within x months (factor in top line benefit/ margin benefit/ marketshare ownership) justifies the investment.

o  Data Domain subdivided territories and doubled or tripled revenue in the combined patch within 6 -9 months.

-       Geographic Distance to 25% or more of gross pipeline is greater than a 2 hour effort from reps home

o  Lets face it – windshield time is unproductive

o  People tend to have highest social and business networks near where they live

o  The cost of travel equates to the cost of another sales team.  This happens a lot in a young company.

-       Large Metro or IT Buying markets are under represented

o  For example – we do a million a month in San Diego and 200k in Los Angeles with a single rep based in San Diego.

At Data Domain we experimented with channel enablement to cover under represented markets.  However, until I placed a rep in geographic market, revenues would not flow predictably.  Remember – VARS and Partners are not in the business of driving your growth…they are in the business of driving margin dollars and customer satisfaction.

I warn you that the bite of a rep during a territory split can be difficult.  Hence it is best to set expectations early.  When I hired a sales person I told them, “if you do your job well we would be splitting their territory 1-2 times per year or more”.  If we did not split something it was typically a reason to look at that particular reps performance.   All of our early reps had stock in the company and a ton of pride and hope for the business – they bought into the greater good story.

My recommendation on handling split transitions is to be quick about it.  We often let a rep hold an advanced stage deal till the end of the quarter or give them partial credit if the deal closed within the business quarter of the new rep.  Thus the new rep would immediately have a pipeline and the old rep was incented to close what was in his or her pipeline quickly.   If you let the old rep hold on forever – expect the new rep to fail and the pipeline to age rapidly as old rep focuses on their new smaller region.

Just remember if your job is easy at a start up – you picked the wrong company. 

Hard is good (I know what most of you are thinking). 

On Beating IBM and Sun

It is always fun to beat large competitors -- in one situation I decided to write up an out-take of the "Tornado Alert" we sent out that described our victory.


-- Congratulations to the "Barbecue Brothers" they just closed company x for 3 million dollars.  It was a hard fought battle against IBM and Sun.  This is the conversation that was overheard from Sun and IBM at a local Waffle House... this is the actual (fake conversation) recorded... who had tried to team to beat Data Domain:

IBM Rep – I am so excited that we get to charge really high prices for some backup at XYZ

Sun Rep – Me too… finally someone who wants to buy a giant tape library…that disk dedupe stuff is killing me in the open systems… ATT said no to more tape…and I have no one else left to sell to.

IBM Manager – Where is the “blackberry syrup”

Sun Manager – I can’t believe you called this meeting for 9:00 am – normally I am golfing.

IBM Rep – So did you hear of that Data Domain guy telling the client that he can solve the Mainframe and OpenSystems backup problem.

Sun Rep – Yeah I heard – I sure hope that the client does not test that…we just lost to them last quarter.

IBM Manager – Damn…this syrup is good

Sun Manager – I would be on my second “bloody Mary” by now… when do we go get that order.

IBM Manager – Lets golf afterwards…also did you know that the Jack Daniels plant is just up the road.   They offer drive through tasting.

Phone Rings – It is the client calling the IBM Rep….

IBM Rep Answers – oh.  The meeting is not needed. You bought the Data Domain stuff.  It works to backup the Mainframe…it is fast.  It gave you back how many floor tiles.   Oh…ok.      – Guys – looks like we are golfing after all.

Sun Manager – Ok – lets go golf…can we stop and do a tasting first?

-- Our team is celebrating with a rack of ribs, Jack Daniels and a beer chaser.  Well done and just know I will eat barbecue with you anytime you call.


Go team Barbecue!

Activity + Efficiency – The Power of Inside Sales

Let’s start with the simple assumption that a bored salesperson is bad for the company and potentially dangerous to themselves.

If we extend the assumption that no matter who we hire their individual list of names, past customers, partners, etc will be exhausted in the first 2-6 weeks.  

So how do we solve the problem??? In traditional companies we do marketing events –the outcome of these marketing events is a list of names.  Some are good – some are bad – and we rely on field sales to qualify them (they never make notes, update crm systems, and usually think to themselves I would rather work the 3 opportunities I have in front of me than spend another 5 minutes cold calling – I know I used to be one of these guys and I was guilty on all fronts).

Hence we built a leveraged model that used inside sales to qualify leads, set meetings, and close the loop with marketing.  This is a tough job – expect some burnout.

The economics are a “no-brainer” if you look at the benefit provided verses the loaded cost of sales without inside help.  An inside rep will improve the number and quality of first meetings from 2-4 per week to greater than 6 per week (outside people will be doing repeat calls and channel recruiting also).   A fully loaded sales team of rep and SE can cost upwards of 35k per month…why not amortize that cost across twice as many meetings for an additional ten percent spend.

Key elements to establish:

-       How do you define a qualified meeting

-       Comp plan for inside that measures on meetings

-       What percentage of meetings do you expect to lead to revenue

-       What percentage of meetings should meet qualification criteria

Remember that Sales people are like professional athletes (in more than ego)  they need practice to become world class.   And like pro athletes they will get into trouble in the “off-season”.  

Importance of Culture

We created a culture at Data Domain.  We often described it as an environment where individuals breathed pure oxygen.  Some people can’t handle an environment where they were expected to push themselves to new heights and be respectful of the team.  We had core values – Respect, Execution, Client Focus, Integrity, Performance.

Many bailed out on the journey – it should be noted I did not lose a single sales person that was over quota in over 6 years.  I did however push people out…frequently.  Performance was a common reason -- Culture fit was just as important! 

When you have a high performance culture – people tell you who is not performing or who will slow us down.  An example of this…we hired a first line manager in a market where we sub-divided an existing region.  By all accounts this person was well pedigreed…but he did not run the pace of the business nor did he respect his team and what they could create on a daily basis.  I lost one of our good SE’s out of the blue – we asked "why" he was leaving and he would not say…so I started to poke around.  Initially some of the guys did not open up to me as they were new and were afraid of repercussions…finally (mind you this was 2 days) one of my initial hires called me and told me some of the details.  The next day the manager was gone…We kept our sales team – we reinforced a cultural element of open feedback and that all of our people matter. 

How do you beat a boxer who is stronger and bigger than you…you use speed, technique, focus and heart. 

When any member of our team requested something from another member of the company responses were almost immediate.  We were a hundred people who had the impact of a thousand.  Emails flowed freely. My average response time to an email message was about 3 minutes (unless I was at 40k feet flying without internet - but I would catch up within an hour of landing). Speed is king - faster I got an answer back to my team the faster they could close, walk away, learn and go sell more.  

We learned collectively like 1 organism not 100 separate individuals.   The Gorilla’s were bigger than us…but we ran around them.  We may not win everywhere -- but, buy the time a competitor beat us in a single account we had learned, shared, grew and beat them in 5 others.  

Don't be a "Wimp"

Ok…I know it goes with out saying but if you are going to be an executive in a start up you better not be a wimp.  Don’t let the competitors size scare you into not taking action…it is ok to be paranoid…just don’t get stuck in a cycle of fear or analysis paralysis. 

You are climbing a cliff – if you don’t see any handholds directly above you…you can go back down or you can get creative and go to the side and then go up…

There was a situation about 3 years into the company where we had an opportunity to do a re-sell relationship with a huge company --  not an OEM.  I met with my counterpart at the Company and he told me…It will take me 30 days to finalize a contract with you but I can’t do business with you if you keep hiring my people. 

Damn…I knew I was having an impact.  Here is this guy running a multi-billion dollar business telling me I was taking his good guys.  I said “I have 2 offers that are going out today to your guys – you can counter them and I will not counter back – after that I will hold for 30 days. We got 1 of the 2…After 15 days we did not have a redline version of the contract – I told him he had 15 more days…I did the same thing with a week left…2 days…1 day. 

Mind you I was recruiting the entire time – at the end of the 30 days still no redline –not to mention a signed contract.  I called…he said we are a big company – things take time.  I said if it was strategic to him it would have been done…I could have been scared – but the reality was the only way to get where “you need to go” is for you to get there – not rely on others to take you to the place you want to go.

Eight (8) offers went out that day to his team members…we got all 8.  Many of whom are still with us.  He was pissed…he said I am going to come after your people and offer them in the money options – I actually sent him my entire phone list –even circled the names of guys he may want to get…none of our people left.  I won’t name the company – but they were one of the few that had the balls to get into a bidding war for Data Domain. 

Communication - Be the Bull!

Email became my vehicle of choice to try and rally the troops.  Email was like handing me a megaphone in the middle of a Sunday morning church service – If there was a volume level to email it was a 12 on a scale of 1-10.   


Win alerts came out frequently – called Tornado Alerts – imagine the force of wind strong enough to level a town – that was what we were doing to the competition.   These emails shared key elements of why we won, who we beat, deal size and the names of the salesperson, SE (don't forget the SE) and inside rep.  Every employee within the company was copied on the win notes -- As a culture - we won together - we lost together (if we lost we wanted to know why so we could try and do something about it).  

Sometimes you do something while communicating that takes on a viral nature....within the Data Domain sales culture it became the "Bull email" -- "Be the Bull was born". 

Ok – the Bull emails started off innocently enough.  I was in Europe at a partner conference in Spain and the running of the Bulls was going on and their was a picture of a group of Bulls stomping on some stupid humans who decided it was a good idea to run in front of them.  So my analogy…Go be a Bull and run over your competition.  I sent a note and copied the picture into an email – what happened was amazing.  My team started to customize the picture…they put names on the stupid human’s that were our competitor’s names – IBM, EMC, Netapp, HDS, etc…

More colorful pictures began to circulate - Pictures of skewered matador's  -- the image - reflected the culture - we (Data Domain) were the Bull.  New phrases like “Be the Bull”, Watch out for the Horns and others were launched.  

If you were the subject of a Bull email you just received the ultimate praise. 

Remember -- Be the Bull!!!