The ultimate guide to founder-led sales | Jen Abel (co-founder of JJELLYFISH)

[00:00] I've always wanted to create a very tactical episode on how to do sales, especially with a focus on founder-led sales. A lot of early stage founders get tripped up as they're taking late stage sales advice. The founder is the product. You have studied, you have experienced something that most of the market hasn't even had a chance to maybe see or visualize yet. A billion SaaS tools emailing me constantly about their product. How do you get someone to even want to talk to you and be open to learning about what you're doing? [00:30] shock value or is counterintuitive, you'll get them to continue reading. When a problem is truly being felt by the market, people will get on a call. People will respond. The next step, I imagine, is you're on the phone with them trying to convince them to actually care. What do you do there? How do you get them to engage further? You need to be vulnerable. I would be very open and honest with where you are. Hey, I'm an early stage startup. We have a lot to learn. Can we kind of gain your [01:00] about revenue on day one. It is about learning as fast as humanly possible to get to that pulse so that you can earn the right to sell. [01:12] Today my guest is Jen Abel. Jen is the co-founder of Jellyfish, where her and her team help early stage founders learn how to sell, [01:20] do early customer discovery, and set up a repeatable sales motion. [01:23] Prior to Jellyfish, Jen was an enterprise sales director at the Muse and at General Assembly, and she's obsessed with helping founders in the zero to one stage of their journey. In our conversation, we get extremely tactical and in the weeds on how to actually do sales as a founder. We talk through each step of the sales process, and Jen shares what you should be doing and saying at every step.

[01:53] that final signature. She shares actual words you should be using and phrases and structures and pitfalls that most people run into at each of these steps. I've never heard a podcast episode with this much advice that you can put into practice tomorrow, and I am very excited to hear how it goes for you. If you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube. It's the best way to avoid missing future episodes, and it helps the podcast tremendously. With that, I bring you Jen Abel. [02:24] Jen, thank you so much for being here. Welcome to the podcast. Thanks, Lenny. [02:28] What I've always wanted to do is to create a very... [02:31] tactical episode on how to do sales. [02:34] like how to actually have sales conversations, how to find leads, how to close deals, [02:39] especially with a focus on founder-led sales. [02:41] where founders are doing the early sales versus hiring a salesperson. [02:45] which one, I know you're a huge advocate of, and we'll talk about this. And two, you basically spent all your time working with founders and founding teams, helping them learn how to do sales, [02:54] how to set up their go-to-market motions, how to scale teams, sales teams, how to hire salespeople. So I'm very excited to have you here to kind of create a very in-the-weeds, hands-on episode on how to do sales. [03:05] How does that sound broadly? That sounds awesome. And thank you so much for having me, Lenny. I mean, it's a true pleasure to be here with you. [03:12] It's my pleasure. Many people have recommended you come on this podcast. I'm excited we're doing this. Let me start with just this kind of question our founder led sales. [03:21] Maybe just briefly explain what that term means and then talk about why this is so important, why this is the way you recommend companies start doing sales. Founder-led sales is really that first milestone that a startup goes through on the commercial side, right? Which is, how do I go out...

[03:38] and get my first few customers some people might say zero to one which is how do i get my first million others might say you know how do i go out and get my first 10 customers it's all kind of in the same vein and founder-led sales is really really really important because in the very very very early days when there is no brand equity when there is no marketing engine running when there is limited to no reference ability [04:03] The founder is the product. [04:05] right? Because the product is still, could be abstract, could be, you know, an MVP or really, really early, you know, in its really early formation. So the founder is the product. And when people say, well, what does that even mean? It means that you are a subject matter expert on something highly specific. You have studied, you have experienced something that most of the market hasn't even had a chance to maybe see or visualize yet. So you have this like novel insight that you [04:35] building a business around and it's that novel insight and the way you see the world that gets the market excited. [04:41] in absence of a product. And that actually happens even before you even show the product. So founder-led sales is how do you bring the founder's vision into the world and have the market and understand what part of the market [04:52] accepts it, [04:53] and then what part of that vision are they accepting? [04:55] So it's aligning with, [04:57] the founder's vision with the market reality. [05:00] This episode is brought to you by Brave Search. Brave Search is the private, independent search engine that doesn't bias or censor results. Brave Search and its Answers with AI feature are available for free to all users on desktop and mobile devices. With Brave Search, you get real answers faster served from their own independent index of the web. Their AI search engine can give lightning fast, incredibly accurate results for almost any question.

[05:29] It's also a powerful traditional search engine with real innovations versus big tech options. It fights bias and SEO spam. It brings a cleaner results page with fewer ads, Reddit threads in the search engine results page, powerful local results, and even community-driven ranking options. Tired of big tech's same old list of links? It's time to try Brave Search. Visit brave.com slash Lenny to get started. That's brave.com slash Lenny. [05:57] This episode is brought to you by Vanta. When it comes to ensuring your company has top-notch security practices, things get complicated fast. Now you can assess risk, secure the trust of your customers, and automate compliance for SOC 2, ISO 27001, HIPAA, and more with a single platform, Vanta. [06:27] Plus, you can save hours by completing security questionnaires with Vanta AI. Join thousands of global companies that use Vanta to automate evidence collection, [06:37] unify risk management, and streamline security reviews. Get $1,000 off Vanta when you go to vanta.com slash Lenny. That's V-A-N-T-A dot com slash Lenny. [06:50] And this is counter to what many founders hope is [06:54] I'm just going to hire a salesperson. They'll handle sales. I'll be the thing. I'll wait for them to find deals. And this is like a lot of people think this way, right? And this is founder-led sales is the movement of just like, no, no, you should be doing the sales for a long time as a founder.

[07:06] Absolutely. I mean, it is the competitive advantage. I don't think people realize how much of a competitive advantage the founder-led sales motion is. [07:14] for three kind of specific reasons. [07:16] One is, is that [07:18] The founder is the visionary. No one's going to be able to speak to it like they can. No salesperson, [07:25] really no non-founder. [07:27] The second is that they are the highest kind of [07:31] order on the in the hierarchy of the startup right it's the founder so when the market the market is excited to talk to a founder because they usually know something that the market doesn't know and they want to learn and maybe they want to experience something differently so being able to speak to the person that's running the vision speak to the person that's crafted the vision and then that third piece is is that [07:53] the founder can [07:55] you know, can see something budding in a conversation that a salesperson won't be able to see. [08:00] right and it's those budding moments that's where all the gold lives and i don't think a lot of founders realize that their day one market vision is never the same vision that takes them to product market fit and i say that all the time it's these like little budding moments where it's like i was able to get to that budding insight because i went deeper and deeper and deeper and deeper through these calls and these conversations to fully refine how we want to go out and sell it and only a founder is going to be able to see those things [08:26] I love this because this connects really well with an episode I just did with the CMO of Wiz. And the founders went through this exactly. They had all these conversations. They had 10 to 15 conversations a day for weeks. And then they're like realizing nobody. People keep telling us this is they like it, but no one's buying. No one's excited enough to want to.

[08:45] actually move forward and that was only happened because the founders were on these calls [08:48] Yeah, and the other thing too is that it becomes a game of telephone. It's like, "Hey, this salesperson says that no one cares about this. What do you think the first thing the founder is going to say is?" [08:57] It's the salesperson. [08:59] So much easier to say that than, you know, is it me? Is it my vision? So it also kind of brings the accountability closer to, you know, [09:07] the pulse where decisions are made. It's interesting how similar this is to product building, where there's this idea that a founder, kind of top down, can tell the team what to build and it's this very waterfall cycle when in reality, the idea of the product and feature is just like step one and then there's [09:25] Actually, [09:26] building and testing and talking to customers about it that actually [09:29] turns that initial seed of an idea to the real thing that people want. [09:33] Totally. Okay, so the catch-22, I don't know if that's the term here, the challenge is... [09:40] Okay, so great. Founders should be doing sales. [09:43] Most founders have never done sales. They just want to build product. They're mostly product people, design people. Sometimes there's founder. [09:52] that are salespeople rarely is that the case in my experience so doing sales very hard not something that comes naturally to a lot of people a lot of people are very afraid of it [10:00] So with that, let's get into how to actually get better at [10:05] the sales process i think a nice uh framework for how we can go through this is basically [10:11] First, [10:11] Let's talk about the sales cycle, the key steps of a sales cycle, and then we'll just go through each step and help people learn some tactics to get through each of those conversations. Okay, cool. What's the simplest way to think about the steps of a sales cycle? The traditional sales stages that most CRMs are even set up as is like you have your intro call, you have your second call.

[10:34] which sometimes could be the demo depending on like the stage of market you're selling to. Then you have your third call, which is going to be more about like walking through a proposal, a scope of work, maybe going deeper into the demo to contextualize it to everything you've learned. The fourth call is going to be getting their feedback and kind of co-authoring that scope of work even further. The fifth call is going to be around probably an introduction to procurement. [11:04] selling into procurement in itself, it's his own little sales cycle, but that's, we could talk about that in a sec. And then post procurement, it's going to be obviously getting that signature and knowing who the actual signatory is, because sometimes it's not even the business unit. It's sometimes, you know, [11:18] legal CFO procurement themselves. So just understanding who that is. [11:23] Okay, great. So let's walk through each of these steps. So I love that each call has its traditional goal. Demo, proposal, then co-authoring, and then procurement, and then post-procurement. I love how consistent everybody is. [11:38] Yeah, it's well, it's also it's interesting because it's also predicated on their buying process as well. [11:45] So if they're really used to buying, like if they're very mature in their buying process, they actually might guide you to what the steps are. But, you know, most startups are turning non-consumers into consumers. So [11:58] that's why this kind of fits well. Got it. So I think, so there's this integral steps to kind of starting about where it begins. I think where a lot of people struggle most is like getting anyone to even pay attention. Like you don't want to talk to them. Like why? I have a billion SaaS tools emailing me constantly about their product.

[12:14] So maybe we start there, just like, how do you get someone to even want to talk to you and be open to learning about what you're doing? [12:19] Yeah. And this is why that founder led sales piece is so important. One is when it's coming from the founder, it's an entirely different way. [12:27] right you're like oh interesting this founder is reaching out to me okay i'm gonna i'm gonna i'm gonna seek to go a layer deeper um knowing who who is sending me this note [12:37] the second piece is this is why it needs to that novel insight that that technical insight that business model insight that you've uncovered needs to lead here right because people are inspired by a new way of thinking something high usually something counterintuitive something that's really different [12:55] I really try and stay away from better because that's really hard to define and better to some better means something different to everyone. Right. So if you can focus the messaging in a way that speaks to something that is a bit has a bit of shock value or is counterintuitive. [13:11] you'll get them to continue reading. [13:14] So first and foremost, I usually like to open it with which is why is this relevant for me in my role? Why are you reaching out to me? [13:22] So first and foremost is relevancy. I think that matters even more so than personalization right now, because I think it's so easy to personalize anything. And it can also come off cross as really stressed when you're like, hey, I noticed you were on, you know, [13:36] such and such, you know, podcast. And that was when they were previously like two roles behind. Right. So I always say relevancy, if you can get to relevancy, that's the most important piece.

[13:46] The second most important piece is really getting to that level of differentiation or counterintuitive nature. So say something that would like literally make them say, what? [13:56] Or... [13:57] That makes no sense. Not maybe not. That makes no sense. But like what or how could that be? Or I've never thought about it that way. Or I actually don't fully understand what they're saying, but there's something there that's interesting. [14:10] Right. Like get them to like pause for a minute. [14:13] and in the most important piece is getting this done where if they get it on their mobile phone which everyone [14:19] is looking at their mobile phone and on email, they don't have to scroll. [14:23] so usually three to four sentences max [14:26] That also, that's how a founder writes. That's how an executive writes if you're, you know, selling top down. [14:32] But most importantly, leave them wanting more. Don't say everything. Don't even talk about the solution. [14:37] Talk about the problem that you want to solve and why. [14:42] and why it needs to be solved or why it's not good enough today. [14:45] So those are the kind of the four main components just to reiterate relevancy. [14:49] bring some level of counterintuitive or really different approach to the conversation. [14:54] focusing in on a problem that's predicated to them and really concise. [14:59] I love this. Is there an example you could share that helps make this even more real of maybe an email you helped with? And by the way, this is like email and LinkedIn, I imagine, is where you're communicating mostly. [15:10] LinkedIn email, you would be shocked to hear this, but cold calling. I never used to do this. It is one of the most

[15:19] The interest rates on cold calling are a lot higher than email in many cases. [15:25] So it's calling, email, cold email, and LinkedIn DMs. Is that the three channels generally? Those are the three, yeah, the main ones. [15:33] Cool. Yeah. Is there an example? It doesn't have to be like word for word, which you've done or people have done, but just how do you? Yeah. Actually, our first three years were built on cold email before we actually like had clients before we actually, you know, got word of mouth from the founders we worked with. I cold called I cold emailed. [15:51] the first 20 customers we had at Jellyfish. [15:55] And the line I used in there was zero to one sales talent doesn't exist. That's why I want to have a conversation with you. So that was kind of like that leading like, wait, what? What does that even mean? And what I would do is tie that to them in some respects, right? Like, you know, if they recently raised the Cedar Series A, where they are in that journey, [16:15] But I would lead with that and then tie it into like, hey, I noticed you're looking to target [16:19] you know, X, Y, and Z based off of what's your website, like, I'd love to have a conversation with you. And that first piece is the relevance. Here's why this is relevant to you. Yeah. And then I say like our belief at Jellyfish is zero to one sales talent doesn't exist. That's why we built this model. Awesome. Okay. Yeah. And you kept it really short. So it's relevance, counterintuitive, keep it really short, and then... [16:40] What's the fourth piece? [16:42] The fourth piece is just make sure it's concise so that you don't have to scroll on on mobile phone. [16:47] While we're on this topic, what's a good conversion rate of these sorts of cold outreaches? The conversion rate is interesting because everyone's so focused on conversion rate. I get that in the beginning until you have some wins, you have to focus there.

[16:59] But I just want to reverse engineer it backwards a bit once you kind of have this, and I'll talk about it in a sec, which is win rate. Win rate is if I got Lenny on a phone call. [17:10] And he went through the sales process and I signed him up and I spoke to 10 Lenny's and only... [17:16] you know, Lenny R was the one that signed, that's one out of 10, that's a 10% win rate. Okay. So if you have a really high win rate, let's say 30 or 40%, you actually don't need as high of a conversion rate on the outbound because you know, if you get someone in the funnel, [17:34] the throughput is very healthy if your win rate is really low you need that conversion rate to be much much higher because you need more and more and more at bats so conversion rate is a funny thing in the beginning i get it because you don't have customer you don't have a lot of customers going through the pipeline yet but it is [17:51] There's people focus on it. [17:53] in a little bit of a false sense because interest rate truly [17:58] is also dictated by win rate. [18:01] So I just want to kind of like specify that. Yeah, that's a really good point. [18:04] I would say if you're doing a win rate of around 15% to 30% and you need to carry – [18:16] oh, I don't know, a million dollar quota, right? I would say a healthy conversion rate from outbound probably sits around... [18:27] When it's mature around 5% to 7%, sometimes it could be 2% to 3%. Sometimes I've seen 8% to 15% because it's coming from the founder and they're solving a really heartfelt problem.

[18:42] So interest rate is also predicated on the problem that the founder has decided they want to solve for. [18:49] and their insight on that problem. And everyone wants to keep going back to, well, email rate is really low, email doesn't work anymore, LinkedIn, I'm not getting the connects I want. Yeah, you can argue that the game has changed a little bit. [19:05] But when a problem is truly being felt by the market, [19:09] people will get on the call, people will respond. And there, you know, if I can compare two engagements at a time that we're running, I see one where it's a 2%. [19:18] Interested rate and then I'm seeing another one that's actually at 12% interested rate. [19:23] And we're doing nothing different. The only thing that's different is the insight that the founder has on the market. [19:29] Which is a hard pill to swallow and I know that's hard to hear too and those are two different companies selling different things different companies and [19:35] Two different companies selling to two different markets, but they're not fundamentally drastically different markets. Got it. But one's basically got more product market fit, essentially. That's exactly right. Everyone always comes back to, we have this sales problem, we have this sales problem, we have an outbound problem. Yes, there could be some technical things going on that you need to look at. Maybe you've leveraged clay and you've blasted 1,000 people and now your domain health has been impacted. [20:05] vast majority of the time [20:08] Maybe you're just not saying anything interesting at all. Maybe the problem you're looking to solve just isn't widely felt.

[20:15] Maybe the perspective you have needs another level of refinement because, you know, [20:19] You're just not getting those bites. [20:21] I feel like this question you just touched on is something a lot of founders are always wondering. Is this product not the thing? [20:26] people want? Is it my sales skills? I imagine this is a very difficult question to answer, especially quickly. [20:33] I guess is there anything there that's like [20:35] More likely because of this, it means your product isn't something anyone's want versus you're not doing a good job selling it. [20:41] Remember that amazing chart you drew where it talked about the length of time it took? I think you picked the top 25 points. [20:48] Startups. Product market fit. Timeline. Product market fit. Yeah. That amazing image that I think has been re-shared more times than anything I've ever seen. It's interesting because if you look at, I was looking at this closely the other day. If you look at the top section where the time to product market fit is consolidated and you go all the way down to like the Airtables and the Figmas, which is a long time to get to product market fit. [21:12] If you think about the earlier ones, which were, it was like GitHub that had product market fit pretty quickly. [21:18] the SOC 2 compliant company. Vanta. Vanta. [21:24] I there's like this this thing in my head and I haven't fully validated it, but I'm going to share it with you, which is. [21:31] Did they start with the market problem first and then build the product? Because they knew who their market was right off the bat versus an Airtable and a Figma that I think started with a technical insight and then were trying to find their market.

[21:46] I think that's absolutely right. Van said the way they approached it, Christina, she... [21:50] was like searching for a pain. She was obsessed with talking to everybody about a pain that they needed solved and then she just like built it in spreadsheets. So she started with the market very much so. [22:00] and i think product market fit when you start with the market first it's accelerated but [22:06] I will say this. [22:08] I think that it's also capped on the upside. [22:11] because you're starting with the market versus the Airtable and the Figma. [22:16] which started with the technical insight and has kind of uncapped upside. But one is certainly riskier than the other, right? Starting with a product is a hell of a lot riskier. And this is where I come back to like so many people will say, how did you get funding and not know who your market is? [22:33] And it's like, because if they do find it, that's a really, really, really big win. [22:39] right versus i think if you start with the market first you could potentially get [22:44] a good win, but is it more capped? [22:47] Mm. [22:47] Interesting. [22:48] I don't know, it's just a thought. I was staring at your grid for so long because I was like, "There's something here." And I kept coming back to, [22:56] Those were more like [22:58] I kept kind of breaking it down to like market versus product. Yeah, I love this. I think there's definitely something there. There's also like horizontal versus like a very specific problem you're solving. Okay, so you mentioned clay and you kind of nerd sniped me there of just like, [23:10] what tools do you find useful? And it kind of makes me think about like finding leads, which is kind of going backwards through the sales process, but it might be, okay, so maybe let's spend time there just like,

[23:21] What do you recommend to founders to find the good leads? The Glenn Gary, Glenn Ross good leads. [23:27] So I say before you buy any tool, don't even think about tools. I feel like people get turn everything into this complicated mess with all of the tools that they start integrating and then. [23:37] They're engineers, I get it. Now they start to engineer these sales tools together, and then they blast their market, and now they have 5,000 notes out in one day, and their domain takes a hit. I think before you even overthink about the tools right now, [23:52] Can you manually? [23:54] Find [23:56] 30 people that you want to spend 15 to 20 minutes writing a rock solid note to. [24:03] Are there 30 people that you are deeply excited to learn from that you are willing to invest 15 to 20 minutes to write a really thoughtful note? [24:11] Let's just start there. [24:13] So, [24:14] leave some questions. One, are they even discoverable? [24:18] How hard is it to find 30 people? [24:21] What have you noticed across those 30 people? Are there anything, any interesting insights? Maybe it's the size of the team they work on. Maybe it's the industry they're in. Maybe it's the length of time they've been in their role. [24:33] Maybe it's their previous roles in their career. Like what is there? Are there some commonalities? There's always some level of a commonality, usually in most cases. Okay. So now you're starting to collect some parameters just by doing this exercise. You're starting to collect some parameters around who you want to learn from and sell to.

[24:54] Now, [24:54] If you send out those 30 notes and they're, you know, you wrote them specifically and, you know, you spend good quality of time on it and you, you know, you've hit them on email, you've hit them on LinkedIn, maybe even try to call them. Maybe you've sent them a Twitter DM, you know, pulled out all the stops. [25:09] How many people respond? [25:12] 1. [25:13] Five? [25:15] Zero. [25:18] Right. [25:18] If it's zero, [25:20] It begs the question, do you now want to do another 30 in a very similar fashion? Do you want to change the messaging a little bit? It now forces these like natural experiments. [25:31] Or do you want to maybe go after a different role? [25:34] So it forces you to answer these questions in a very manual way before you even think about, you know, integrating and spending time on tools. [25:42] and then you get to a point where it's like okay now i'm starting to get some learnings and now i've realized okay it's this group of people i've spoken to maybe two or three now i want to go out and actually build a campaign [25:54] to now talk to the next 10 to 15 people in that group. [25:58] Truncate this as much as you can because I think people focus so much on volume in the beginning. [26:06] Even if you're selling down market, mid market or enterprise, volume comes once you've identified it and know the parameters. Parameters then allow you to do really strong enrichment with a clay. You now know the types of questions to give it. [26:19] If you're not asking it the right questions, these enrichment tools, these sales tools will be...

[26:25] yield nothing. [26:27] So, it all comes back to even before you start your sales call, you need to make sure you're asking the right questions with, "Am I even engaging?" [26:36] Or do the people that I want to learn from or sell to [26:41] Am I even messaging them in the right way? Are they even the right person? And the only way you can do that is by actually truncating these little experiments. [26:49] I love how tactical that is. And what I love is even, like, one of your nuances you mentioned is, can you even find them? Like, this gives you a signal of... [26:57] How are they-- you're going to have to have hundreds of these and thousands of these eventually. Like if you-- 30 is hard or impossible, you're in trouble already. [27:06] Totally. It was funny. I was talking to someone today that said they had a target segment of high net worth individuals that they wanted to go out and serve. I'm like, "How do you find those people?" [27:20] When you get to a certain level, your net worth may be public. I don't know. It's very hard to have certain parameters that are undiscoverable. Then if they're undiscoverable and it requires you get in on a call, [27:31] to understand if they are a fit. [27:34] that does impact conversion rates. Not necessarily in a bad way, but now you need to kind of bring that back into the math equation, which is like, okay, if I speak to 10 people, I know two out of these 10 will be qualified, but I don't know which of those two out of 10. Well, that means you probably need more of those numbers. [27:51] Okay, so to quickly recap a few of the key things that I've written down as we're talking. So if you're just trying to figure out who to reach out to,

[27:59] Make a list of 30 potential prospects that you think are good fits that would be excited about what you're building. Spend 15 to 30 minutes writing them each an email. [28:09] Do these emails have to be really short the way you described previously? I would say the shorter the better, but would you respond to that? If you got this email, would you respond to it? Got it. A great little tactical test is on Gmail, you can highlight the message and then have it replay it back to you from an audio perspective. Oh, wow. [28:27] you'd be shocked how many notes I've changed when it replays it back. And I'm like, oh, that sounds really passive aggressive. You know? Interesting. Yeah. And, [28:36] And so... [28:38] You also share the structure for how to reach out to folks. So let me just share that again. And that applies to this initial email too. But it sounds like as you automate, you want to make it more precise and focused and not. Like basically they're not as customized as you start reaching out to more folks. Totally. So it's start with something. Here's why this is relevant to you. Like you're looking for salespeople in this market. Here's something that's unexpected or surprise. Like zero to one salespeople don't exist. [29:06] Um... [29:07] Keep it short. [29:09] And then... [29:10] I always forget the last one. [29:12] Focus on the problem [29:15] Focus on the problem. You don't even need to talk about the solution. That's like the big takeaway, which is if you get any sales email you get, what's the primary focus of that email? [29:26] It's usually like, here's what we do. But I bet if someone reached out to you with like a novel insight and said, I'm really passionate about solving this problem. If it's something you're focused on, you'd probably reply.

[29:37] If it's like a big problem, right. If it's like, "Oh, yeah, you're so right. I need this." The beauty with the American market, and I say this because we do a little bit of work with international startups too, is if something doesn't feel right, people have to complain about it. It's like, use that to your advantage. Get that intel. [29:54] A note that I just looked at that I wrote down that I think is very important is avoid [29:58] using "This is better" as your pitch. [30:00] Yeah. [30:02] Yep. Different. Here's something shocking about what we're doing. Here's something that will surprise you. Yeah. Or counterintuitive. Exactly. Counterintuitive. [30:09] Yeah, it's interesting. I spoke to a good friend that leads procurement at a massive organization, and he said to me, he goes, one of the worst things someone can say to me is we're better than X product, because then I asked them to define that. [30:24] And then I asked them, like, OK, how do we measure that? [30:28] And then I say, okay, should we give this company another year to like give them this feedback? And then before we make this huge transition and disrupt momentum and... [30:37] Yeah, better is a dangerous place. Yeah, like I invest in a bunch of startups and I find it's impossible to get anyone to care if things are good enough with what they got today. I'm happy not using the best possible. [30:50] product if my life is okay. I have so many other things I got to do. I'll just deal with this good enough solution for now. Absolutely. [30:59] Okay, amazing. So, [31:01] We talked about how to find, figure out who to go after, how to pitch them to get them to want to talk. [31:06] The next step, I imagine, is you're on the phone with them trying to convince them to actually care.

[31:11] What do you do there? How do you get them to engage further? [31:15] One is you need to be vulnerable. You're an early stage startup. Okay. The market is, [31:22] We're at a point now where the market is smart. [31:24] I always assume that the buyer I'm speaking to is highly educated and knows way more than I do. So just have that perception because what I've learned is a lot of the market will play dumb and you can get yourself caught pretty quickly. [31:41] When you speak to them, I would be very open and honest with where you are. Hey, I'm an early stage startup. We are deeply passionate about solving this specific problem. [31:51] We have a lot to learn. Here's how we are thinking about it from a problem priority perspective. [31:59] Can we can we kind of gain your insight into like how this problem is manifesting on your side? [32:05] and then let them open up now you have them one talking about the problem now you're getting the intel about their perception of the problem and if it isn't even a problem when you say you're early stage and there's still a lot to be done it is easier to be honest [32:20] If you tell them you have a fully baked, ready to go product, they're not going to give you honest feedback. [32:26] It's very hard to say to a founder and look them in the eyes and say, okay, [32:31] hey, we built this product, can I show you what it is? You're just going to get someone that's going to say, oh, this is great, this is wonderful. [32:36] But when you're vulnerable and when you tell them it's not fully built yet, even if it is, [32:41] even if it is, you will get more raw and honest feedback.

[32:45] because it is easier to tell someone, hey, before you make this mistake, I actually don't care about that. [32:52] If you've already built it, they're not going to give you that feedback. So the further you suggest you are, you're actually going to hamstring a lot of the intel. [33:00] hamstring yourself on gaining a lot of the intel. So that's like one counterintuitive thing that I think a lot of founders don't realize. [33:07] This episode is brought to you by Paragon, the developer platform for building native, customer-facing integrations with third-party apps. Our native integrations on your product roadmap, whether it's to ingest context from your users' external data and documents, or to sync data and automate tasks across your users' other apps, integrations are mission critical for B2B software products today. [33:28] But building these integrations in-house cost an average of three months of engineering, according to the 2024 State of Integration Survey, which results in difficult roadmap tradeoffs. This is why engineering teams at Copy AI, AI21, and over 100 other B2B SaaS companies use Paragon, so they can focus their efforts on core product features, not integrations. The result? They've shipped integrations seven times faster, all while avoiding the never-ending maintenance that comes with rolling your own integrations. [33:58] useparagon.com slash Lenny to see how Paragon can help you accelerate your product's integration roadmap today and get $1,000 in credit on their pro and enterprise plans. That's useparagon.com. [34:14] So I had April Dunford on the podcast a while ago. She's awesome. Amazing. And her last book actually has the opposite advice, but I think I know why, which is she focuses on later stage companies. And her advice is,

[34:26] the buyer she has this really interesting insight that it's harder to buy software now than to sell it because there's so much [34:32] to consider and your job is on the line if you make a mistake. It's easier just to be like, forget it. I'm just going to go with what we have today. I don't want to put my ass on the line for buying this new thing that someone's trying to do. [34:43] And so her advice is you actually have to educate the buyer on the market. And here's what's happening. Here's what things are going. And here's why I think. [34:50] this is the future but i think again i think that's focusing on later stage stuff like [34:54] A hundred percent. And that's a good that you raise such a good point, Lenny, which is late stage sales and early stage sales are very, very different. And I think that's where a lot of early stage founders get tripped up is they're taking late stage sales advice from usually coming from an investor or they've maybe hired a salesperson that's. [35:14] you know, focused on more mature sales. Um, [35:18] But I think she is spot on. Buying is just as hard, if not harder than selling right now. [35:24] Because who wants to make a mistake and also who wants to go through switching costs? [35:28] It's so painful. [35:31] I think the other really important point here that you're making is that [35:34] part of this initial sales experience of founder-led sales is not sell as much as you can it's to learn [35:40] what people want, right? And so I love that you're sharing, here's how to get the best possible feedback, not necessarily close the most deals. Totally. And [35:48] Founder led sales is not about revenue on day one. It is about learning as fast as humanly possible to get to that pulse.

[35:57] so that you can earn the right to sell. [35:59] There's this concept that I talk about, which is like you're going out to run sales to collect the research, which is what founder-led sales is. And then you have sales for revenue, which is that post-founder-led sales stage. And like your milestone that you suggested of like how far to take founder-led sales, you said like around a million ARR, right? Yeah. I think it's about like some people say 500, some people say a million. [36:29] I think absolutely you can move out of it. [36:32] If you get to... [36:33] 500k really, really, really slow. [36:37] You might not want to get out of it right away. [36:39] You haven't reached that velocity point yet. Awesome. I have a post that we'll link to that has actually numbers and when all these big startups moved from founder-led sales, it's in that same series about product market fit. There's two stories this makes me think of. I'll share it real quick. One is Sprig. [36:53] They shared a story of [36:54] First Round Capital led their first round and their partner there was just like, "We will not let you hire a salesperson until you had a million ARR. We're going to help you. We're going to have salespeople helping you through it, but we're not going to let you hire someone." He was really happy about that. The other is Zip, which just raised at a $2.3 billion valuation. It's a procurement company that I was lucky to be an investor in and their first [37:17] founder-led sales motion was they just reached out on LinkedIn to heads of procurement and just leaned into what you're saying even more, which is just, we just want [37:25] your advice on this product that we're building.

[37:28] would just tell us what problems you have like it was very advice oriented versus like we want to sell you this thing [37:33] Yeah, no, absolutely. I have this like theory perspective. [37:38] That like maybe you shouldn't hire any salespeople until series A. [37:42] Mm-hmm. [37:43] Right. Because seed is all about experimentation and proving out that experiment. And then obviously series A is about exploiting that learning. But I see so many people. I mean. [37:54] Early state hiring for early stage sales is. [37:57] Oof. [37:58] the odds are actually more against you than [38:01] trying to get your next round of funding because it's truly, truly such a counterintuitive stage. [38:08] Interesting. Okay, so I kind of took us on a whole tangent. You were sharing advice on how to get someone excited. So the first is, [38:16] When you're engaging, you're talking to the prospect, a company, ABC, your advice is be very honest and vulnerable about your stage. Tell them you're early stage. You're building this thing. You're deeply passionate about this problem. Here's what we're trying to do. Here's our... [38:31] priority problem perspective and where we're focusing [38:35] and kind of get their feedback on your approach. Cool. [38:39] You are going to go to the next tip. [38:41] And I took us off course. Testing the questions to ask, right? Like where is that aha unlock for you? But more importantly, where's that aha moment unlock for them? [38:54] Because when they start getting their gears churning in their head about, and this is the beauty about not having a product and not showing them anything, they're visualizing in their head now.

[39:04] This is like a really powerful thing, right? Which is like, so tell me how this looks in your head. Like, how are you seeing this? And they're like, I don't know if I can see it. I'm like, great, we'll show you that. Great insight to know. [39:13] by the way, or like, so I think this is how, I guess this is how it would work. Walk me through what's living in your head right now. You pick up on so much and then all of a sudden they're like, wait a second. [39:25] We've tried solving for this and it's still not solved for. [39:28] Or like, you know what, we hired someone last year to manage this. [39:33] Great understanding. Is it being measured? Is it being managed? And have they tried to solve for it? The leading indicators that you're you're onto something here. I love this thread because this is what everyone's always like. How do I know if my product market fit? There's like these signals. [39:49] that you're talking about of signs that there's something here, like a big enough pain point where they're excited to [39:54] Basically, they want to pay for it. They will pay to solve a problem. So maybe just, again, say the things you notice that are signs like, okay, you have something here. [40:03] So I think the first is [40:06] It has to be a growing and widening problem. No one's going to spend time fixing a pretty fixed problem because it's not necessarily really a priority anymore. It's maybe a pain in the butt, but like it's not a priority if it's not growing or widening. So gate check one is like, what is the implication? Are you measuring? Are you managing this problem today? Yes or no? [40:29] If they don't know, great to know. If they said no, okay, move on to the next. Like that's a...

[40:35] Thank you. [40:36] That's pretty powerful. No, we're not measuring or managing this. OK, there's probably not much there. If it is being measured or managed, then the next question you want to get into is how have you tried to solve for it? [40:47] Is it through that headcount that you just hired? Is it through another tool? Is it just still an open gap because nothing exists yet to solve it? [40:55] Like just understand like their maturity around how they've tried to plug it. [40:59] These are all that make the secret moments in Intel to close that gap. That's awesome. And essentially it's like... [41:08] showing you that there's a pain here. Yeah. That they're paying attention to and are trying to solve. [41:14] And what you're psychologically doing is now you're flipping them into a buyer where they're like, wait a second. [41:18] Hmm. [41:19] hold on, I need to bring on so-and-so on the next call, like, [41:23] They also think that this is this is like not good enough. [41:26] That's funny because that's exactly what Wiz noticed, is they moved from people being like, oh, this is cool. I like it. I like it. [41:33] to, "Okay, I'm going to pull in this person, I'm going to pull in this person, [41:36] to talk about it and make sure we're, and like, they were like pulling in other people exactly as you described to, because they wanted to like move forward on this thing. [41:43] Absolutely. And that's when you know there's some momentum behind it, which is when they're bringing in other colleagues, whether it be the potential users. [41:51] If you're reaching out to the executive or the users like, hey, I actually want to bring my boss on to the next call. [41:57] Good sign. Cool. Anything else along these lines of how to get someone excited slash understand if there's going to be pull there? [42:04] I guess the one thing is please, please, please do not ask questions like what keeps you up at night. If you had a magic wand.

[42:13] You know, what are your pain points today? Because I can guarantee you that answer changes every single day. [42:19] That's super interesting. Is there any tip for how to end one of these calls? As someone that's never done sales is like this. Okay. Get the second call booked on the first call. Love it. Pull up calendars, look at calendars. Who else should be invited? It's just a natural... [42:33] evolution to ending the call. Great. So I'll have to do in 30 minutes though, right? And if they say, ah, you know, I'll email you. [42:42] That's also kind of a leading indicator, yeah. [42:46] So do you recommend not getting off the call, like trying to avoid that? If they won't give you time on the calendar, you could say, listen, great, like feel free to email me. Maybe they're just being honest and they don't have their calendar available. But nine times out of 10, it's usually I don't have the heart to tell you I'm not interested. Yeah, it's hard. It's hard to tell people you're not interested. [43:07] Very cool. Okay, this is amazing. Okay, so the next step, if I remember correctly, is kind of co-authoring and co-... Yes. Okay, cool. Talk about that. [43:15] in the early, early days. [43:18] One of the biggest ways you can get folks excited is it feels like it's going to be built specifically for them. The power of specificity, the power of being extremely focused. [43:29] With that, you can literally turn a customer into [43:34] a guide [43:36] by asking them to co-author the scope. [43:39] scope of work, [43:42] The co-authorship piece is important for two reasons. It helps you understand where they are on their buyer maturity.

[43:49] Let me explain. If they do not have an existing process or strategy to solve X problem, [43:56] They can't buy a technology yet. [43:57] which means you need to sell them, and this is why I go back to you, you need to sell them some form of a service. [44:02] Right? [44:03] why you want to be the one in there educating. You also want to get the logo. You also want to show the revenue while it's not recurring revenue. It still shows intent. [44:12] right and i think that that's really important every founder i speak to is like well my investor really doesn't want you know service-based revenue that's fine but then you can also tell your investor great should i wait 18 months to when they're ready to buy a solution [44:25] and be the one that's not the one selling them because someone else educated them. [44:28] Like these are all of the implications of waiting. [44:31] So, yes, is service based revenue great? No, we all know why it's not great. [44:36] But it's great in the sense that it shows intent. It's great in the sense that you can call them a customer. It's great in the sense that now you can use their logo. And it's great in the sense because you are getting paid [44:47] to educate them. [44:49] You are getting paid to help them design their process. This is where all the power lives. [44:53] And this is why so many AI startups a year and two years ago were going in on services contracts because they wanted to set the mindset with the buyer. [45:04] around what this would look like. [45:07] Is there anything you recommend to timebox, contain the services piece? Yes. Such a great point, Lani. You absolutely need to timebox this. I would timebox it as 90 days and then what you can say in the next 90 days will scope where we are and what you need. Scoping out more than 90 days, listen, so much is going to change. You might also not want to do it anymore, so you don't want to lock yourself up. I would look at 90-day increments. A specific example, we had a founder that my colleague was working with.

[45:36] And they were selling a very specific technology to a non-traditional, like a very traditional industry. [45:43] I don't want to [45:45] be too bleeding with what it is, but a very traditional industry that's not used to working with startups or like necessarily plugging in a new technology right away. And they were very honest. They said, listen, like we haven't changed, you know, vendors or partners in over, you know, five or six years. Like I actually don't even know how we would do that today. Like, could you come in and explain to us, like understanding where our workflow is and how we would integrate this [46:15] which we did. We got paid. [46:17] Nominal amount. [46:20] but we're now a customer. [46:22] And now we get to set the stage for how they think about this. And then they won the technology contract. But everyone is so focused on selling the technology really, really, really quickly. That works in markets that know how to buy that technology, have a process in place, have a strategy in place, have an implementation team in place. [46:40] If it's a new technology like AI right now, [46:43] They need a strategy and process like who's the human in the loop? Is it them or is it you? How do we measure success? What does success look like? What risks should we be aware of? We don't our legal team is not even aware of all these risks. Like you want to be careful because legal can immediately and procurement can shut these things down if it seems too novel. [47:01] where it's like foreign versus they're so used to buying services, especially upmarket.

[47:07] So largest budget line item. [47:09] It's interesting because most founders are very afraid of [47:13] moving into services. I hadn't heard this advice before. I'm going to get slapped for saying all this stuff. Along those lines, what percentage of [47:20] companies that you've worked with or see like do that or have to do that step you this would be it's gonna be a shocking step so um i would say 40 to 50 percent have to sell some form of service before they can sell a technology [47:33] Wow, of B2B SaaS companies. Of B2B SaaS. And this is, again, this is specifically more top-down sales, because the user and the buyer are different. [47:43] which means... [47:44] There's user value, there's buyer value, there's all different players, there's procurement you have to go through, but yeah. [47:50] And just to make it even clearer, what's an example of a service that you've seen a company offer in this step? [47:55] so i've seen hey can you come in and actually help me pitch this design a custom pitch to my boss [48:02] as to why we should do this today. [48:05] and we literally got paid to build a sales pitch. [48:08] Okay, so it's not necessarily providing a service. [48:11] It could be just helping them sell this. - Yeah, it could be helping them sell in a way that makes you, you know, you need to get some, a lot more context on their business. It can also be, "Hey, we haven't actually thought about a new process for how we can actually deploy something like this." Right? "We're currently using this technology which we want to change from." Like, you've kind of hit this at the right time. "How would we implement or how is it best to integrate with this tool?"

[48:39] Can we get both of you guys in a room to like map this out? [48:43] Got it. So it's like consultants almost like to help you solve this problem. It's a great point. It's consulting them towards the acquisition of the product. It's not consulting as like one off consulting. Got it. And they know that obviously you're biased, but they also want the problem solved. They're like, great, you're going to help us. You're going to help me solve this problem because it's on my plate and I need your help convincing leadership. Yeah. And I need and I need to craft the storyline as to why we need to do it anyway. So I will pay you to do it. But like, here's the format it needs to be in. [49:13] along those lines. And then, of course, if you're in a position to actually sell the technology because the market is able to acquire and adopt it and not have to create a new strategy or process, then obviously sell the technology. You don't need to be selling services. I want to come back real quick. The previous call, I wrote this note down as you were talking. You recommended not doing a demo and just talking about it broadly. Is that your advice there? Yeah. On the first call, my fundamental belief is that the demo is a bit of the only carrot you [49:43] Once they see it, [49:44] it's kind of like, [49:46] pitching an investor, once they take a look under the hood that [49:50] dream dreamy ness in their eyes [49:54] You know, they're like, oh, I saw it. So like, leave them wanting more like that. And the demo is that like leave them wanting more. Even when you do a demo, don't demo everything. [50:04] Leave it for a second call. Get them get like let them invest a lot of time in you. Again, if it's qualified, I preface that if it's qualified. But like everyone races through the sales process, like let's do a demo call as quickly as humanly possible. Yes, that is important. Down market. That is important. If you're selling a three thousand dollar tool, you absolutely want to be demoing as fast as humanly possible because it's a high volume game.

[50:29] Up market, when you're talking about hundreds of thousands of dollars, you want to slow that down as fast as possible. [50:35] Because you want to, one, make sure all of the right people in the room, as soon as there's one lead on this, and if it requires other people involved, it doesn't feel like anyone else's baby. [50:45] So you want it to make it feel like the group's baby versus this one individual's baby because it's very quick. You know, someone can easily say, I'd rather use this tool. And then there's like this stalemate of like nothing happens. Just to maybe reiterate so far, we've talked about getting, figuring out who to talk to, pitching them on, talking to you, then having that first conversation. Maybe there's like another conversation in there to get them excited. [51:06] And then there's just like... [51:08] getting them past the finish line, keeping everyone aligned. Is that roughly the next step or how should we think about this? Yeah, so if you are selling upmarket, right, and you now need to go to procurement, who is the group involved in the bond, like, you know, they're the professional buyers. Procurement is a very interesting function. They are very smart. [51:28] Very, very smart, right? They do this for a living. Like they are like professional buyers. So there's a couple things that you need to be aware of. You need to sell them. [51:37] as well like you need to really make this sound [51:41] Don't overcomplicate it. Don't add in jargon. Make it feel like [51:46] Okay, I can wrap my head around this. [51:48] The second piece is it's got to feel different from anything else out there because the professional buyer, it's much easier to say, wait a second, we have these 17 other preferred vendors that do similar work.

[52:00] Why don't you just go use one of them because, oh, by the time this gets through procurement, it could be another three to four months. [52:05] I've seen deals die on the vine because procurement actually suggested they go use another vendor in the system that this [52:12] buyer wasn't even aware of because they didn't differentiate. It didn't feel different. It just felt slightly better. That's how it was positioned. The third piece is when you get to procurement, [52:23] you're going to have to do all the work, right? Make their job easy. You are probably a very small piece into the very large deals that a lot of these people buy. So you're going to, you can get easily sidelined just because you're just a small, [52:36] you know a small a small buy so do the work for them literally say i want to make this as easy as possible for you give me the forms that you need to fill out i'll fill them out for you and you can you know you can do it yourself you you can edit them um do the lift for them if you don't it's so easy for it to just [52:53] go there and die another piece that's important [52:57] with procurement is explaining exactly what you do and don't do. Because if you say you do a bunch of things and they can't really place you, they're going to send you to the kitchen sink of contracting and MSA. [53:08] which is going to ask you for [53:10] You know, five million dollars in an insurance policy and all sorts of other things. And like the ability to look at your book at any point in time. And the reason they did that is because they can't classify you. So they just the easiest thing to do is classify you as high risk. [53:26] so like make it easy for them make it simplified you can also truncate your contracts meaning you

[53:33] Let's say IT is maybe and you want to ask this, like, how long does it take to get through IT due diligence? They might say, oh, it's a 90 day backup. It's a 60 day backup. It's a 30 day backup. There's no backup. If there's a backup, you also don't want it to die and you want it to give an incentive. So this is when you want to truncate contracts to a technology contract and a service contract. [53:53] Service contract allows you to onboard them, get them prepped, come in and educate all of the users about what they're about to go through so that then there's an incentive to get that technology piece through. There's all these like little things to think about. And I think. [54:07] Everyone's, you know, getting through procurement is also creative. [54:11] Right. And knowing who you're dealing with and how to make their job as easy as humanly possible, because what you said and what April said is fought on, which is buying is just as hard as selling. [54:22] As I'm hearing you describe this, I feel like we might be discouraging people from [54:27] selling because this feels very not fun. All these steps, all these procurement work, anything you can say to get people to feel like, okay, this is worth it. Yes, I can get people very excited by this. Once you are in, you are in. [54:40] Once you are in, you are now a preferred vendor. You now have the ability to cross over into other business units. You are now the reason that, hey, if your competitor comes in, well, you got there first. So what do you think procurement's going to say? [54:56] This is why it's so important to get into the enterprise as fast as humanly possible. While it's a headache to get through, if you project manage it, you'll be good.

[55:07] If you if you make an accountability, if you just like you just like if you were to go through fundraising, right, if you if you, you know, are a part of a team that had to raise money, it's no different. [55:17] Right. There's always some level of due diligence. There's always you doing more of the work than them. [55:22] That's just enterprise sales. [55:25] If you prove value, [55:27] Right? [55:28] Your $100,000 deal could be $500,000 next year. [55:32] Your $500,000 deal could be a million dollars the following year. [55:35] This is where stuff begins to compound and this is where growth [55:39] your growth journey, [55:41] really gets accelerated. [55:42] So the beauty with enterprise is once you're in, you're in, you beat out your competitor. [55:47] For a short period of time, there is a little bit of a moat there, but it's not forever. [55:51] you have intel that no one else will have, meaning, [55:57] You're a part of the conversations, you have the badge, you can join the meetings. [56:00] You can ask for introductions. They'll do it. Doesn't feel like sales anymore. You're now a partner. [56:06] And this is why it's so powerful to get into the enterprise because there's so many compounding effects if you – [56:13] If you... [56:14] put the effort in on the sales side, the return is... [56:18] is insane. [56:20] That was awesome. Nailed it. I'm excited. Just for folks that are listening, just to kind of calibrate what size of company you're talking about selling to here, like what's the size of the device you've been sharing so far roughly? So I've been talking a lot about enterprise sales, which is...

[56:38] I... [56:39] I would say anywhere north of... [56:41] 500 to 1,000 employees, just mental model. I'm talking about enterprise sales specifically because there's so much nuance involved in it because the user and the buyer are very different. [56:52] right? As you go down market, let's talk about small business for a second. The user and the buyer are the same person. There's no procurement. If they like what you've built, it's pretty straightforward process. In the mid market, [57:03] Midmark's a funky place. [57:05] because you either are [57:08] Anchoring towards. [57:09] the lower end of mid-market, which is more upper end of small business, or you're anchoring towards lower end enterprise. Those are two very different divides. [57:17] So mid-market just... [57:19] If you're talking about lower end enterprise, again, this is all relative. If you're talking about lower end small business, again, your user and the buyer probably are the same person. [57:29] which makes sales a lot more streamlined. [57:31] But... [57:33] Churn. [57:34] Small business. [57:36] Challenge with small business is the churn. If they get pissed off, if they don't feel like it's good enough, they are gone. Faster than you don't even realize. [57:44] Right there. And they might even tell you they'll just cancel or they'll. And we always see this on Twitter, right? Like they'll call American Express and say, cancel these charges. I don't want to talk to these people anymore. Like they're just more rational. [57:56] Because sometimes, maybe it's their money if they're a small business, right? [58:00] Small business in mid-market while sales is a bit faster, you really got to be on the product market fit side worried about churn. [58:07] They also go out of business at a higher rate. Exactly. You have that kind of churn. That churn piece too, yeah, exactly.

[58:14] Amazing. Okay. [58:16] What comes next? So we're kind of in procurement at this point. Okay, so now we're at signature, right? [58:21] Okay. [58:21] okay so as you enter procurement okay you want to know before you get to the next stage who is signing this deal [58:28] Here are some examples of signers I've seen. [58:31] Chief Financial Officer. [58:33] Chief Legal Officer, the business unit head themselves, [58:36] the head of procurement. [58:38] Yes. [58:38] You want to know who that person is so that you can literally say to the head of procurement, hey, listen, I want to make sure this person has everything they need when they review this to know what they're signing. [58:50] Who is it? [58:51] And how can I can I give you a few bullets to share that you can maybe respond to that we get tight so that they know exactly what they're looking at? [59:00] I was a [59:01] This was two or three years ago. I was involved in getting a deal over procurement that was just – [59:08] Truly, I [59:09] It was a [59:10] pharmaceutical company and it was very, very long process. We got to the finish line and the CFO was the signature. [59:19] And this is when I made the mistake. CFO responds back to the procurement lead who sent it to the business unit, who sent it to me and was like, what am I signing? I don't actually understand what these people are doing and why are we doing this? [59:32] So then she quickly said to me, hey, listen, we need to defend this. You know, can you put together some bullets? And I'm like, well, what kind of bullets do I need? What does this person care about? And again, it just it created so much anxiety. And now I'm back in the bottom of the queue.

[59:46] Because she's probably he or she is looking at the things that come in in an order of priority. So now we've elongated this by another month. [59:54] simply because I didn't plan. [59:56] So like this is just to say like learning from my own mistake of, [1:00:00] Know who the signature is, because if they don't know what they're looking at, they're going to kick it out and you're going to lose your Q spot. [1:00:06] So many ways to fail. And this was you selling jellyfish or this was you working with a company? This was me helping get something to do for a job. Got it. Oh, man. [1:00:16] Okay. [1:00:16] Anything else in that step that might be helpful to folks? [1:00:19] Yes. One thing to caveat is [1:00:23] You do not get paid until you are approved by finance and procurement has a signature on the contract. [1:00:31] Meaning don't start any work. [1:00:34] Or if you do start work, know that. [1:00:37] There is no payment. The business unit can't just pay you. It's paid through a purchase order which is paid through by finance. [1:00:45] So don't rely on that money. Yeah. Unless it's finally, unless the signature's on the paper. Yeah. Quick tangent, thoughts on discounting at any point? [1:00:53] Parts of the journey. [1:00:54] If there is a reason as to why. [1:00:56] So discounting just to get the deal over the line, you're negotiating with yourself. [1:01:02] unless they ask for it and then ask them to defend it. [1:01:04] Right. Like certain segments like small business, you should leave a little bit of room for buffer because sometimes that's their own money. [1:01:11] It's like their own small business. Mid-market and enterprise, there's got to be a reason why.

[1:01:16] and ask them, be like, hey, so, you know, if I give you a 30% discount, can I remove 30% of the value? [1:01:22] You can kind of play it a little bit like that. I don't recommend it, but that's kind of what... [1:01:27] you know what they're saying. [1:01:30] But I'm, discounting is great if you're getting, if they're doing something for you far and beyond. Like for example, if they're a design partner, [1:01:38] If they're going to be a reference for two years, if they're going to give you something far beyond just using the technology, then yeah, I think a discount is a good reason to give back to somebody that's giving to you, but not as a strategy to get a deal done. [1:01:57] Okay, is there anything beyond this step of getting a signature? Are we done? [1:02:01] Yeah, I hope you celebrate because... Okay, great. You got a signature from this whole process. Yeah. Hopefully I'm not making this sound too daunting. I'm just really trying to lay out all the... Yeah, no, this is exactly what people need. This is amazing. And your pep talk was really helpful to you along the way. [1:02:19] Um... [1:02:20] What's the general timeline for a sales process like this in your experience with these 500-plus ICE companies? [1:02:26] So there's three things that dictate sales cycle. [1:02:29] One is you as the founder, like how well are you project managing it? Like, for example, it's, you know, I'll say, you know, let's have our second or third call in two weeks, two weeks. [1:02:39] Do a week. Why are you elongating this? You know, like keep your calls as tight as possible because that shortens your sales cycle. The second is just how complex the organization is. If you're dealing with a highly regulated industry.

[1:02:53] Just know it's going to take a bit longer. [1:02:55] sometimes 20 to 30 percent longer. So like a highly regulated industry, nine to 12 months, [1:03:03] on like conservative on the conservative side again if there is their budget it's it's tricky because is there a budget light item dictated towards it yet are you creating budget um [1:03:13] how painful is the problem and how senior have you gone? Like if you're talking to like [1:03:19] the SVP or chief of whatever, [1:03:24] they're pretty good about being able to like navigate the traps if you're dealing with a director or mid-level person they maybe have not purchased something before and like just make some internal mistakes so it's it's i always say it can range anywhere i've seen enterprise deals close in [1:03:40] believe it or not. [1:03:41] Rare, but I've seen it. I've also seen enterprise deals typically take anywhere between six and 12 months. [1:03:48] Really important button. [1:03:50] Thank you. [1:03:51] Enterprises, no. [1:03:53] that the process and the length to get the deal done [1:03:56] is what costs more than the technology itself. [1:04:00] meaning the effort it takes to get through their system. [1:04:06] that's why they're willing to spend so much, right? Like sometimes that's actually more expensive than the technology itself. So don't negotiate with yourself, understand the value you're delivering and, um, [1:04:19] But don't be crazy. I've seen people try and go in with a million-dollar deal as a seed stage startup.

[1:04:25] Oh, interesting thing. So interesting tactic. I've seen... [1:04:29] contracts in the enterprise. [1:04:31] that state that the deal cannot exceed more than 20% of the existing revenue. [1:04:39] So there are these things just to be aware of. In most cases, you can ask them, "Is that a hard line?" "Is that a hard, hard line?" Or, "How negotiable is that?" Sometimes it's negotiable. Sometimes it's like, "No, this is a hard rule." [1:04:52] we can't but then it seems silly because you take a hundred thousand dollar deal and bring it down to twenty thousand it's just like a [1:04:58] you know, just be careful that like you're [1:05:00] stripping some of the value out. But like, I kid you not, I've seen an enterprise deal go from, it lands at 60 and it turns into 280,000 in four months. [1:05:10] So, like, again, I want to encourage, yes, this is a lot of work, but the payoff is, [1:05:16] is [1:05:17] exponential. What's a good ACV to start with if you're trying to sell to enterprise to make it all worth it? [1:05:24] for your startup? - I would say anywhere between 50 to 200K, depending on the business unit you're selling to. That's kind of like sweet spot. Like they're used to something like in that realm. [1:05:35] And this is like a startup selling? It's an early stage startup, yep, like founder-led, early stage, yep. [1:05:41] Initial contract. [1:05:43] Yep, initial contract. I would say, okay, probably caters more towards like 50 to 100K, but I've seen people sell to, again, it's how big is the problem? Who are you selling it to? Is it the SVP that you started with and they've got a large budget and it's a pretty healthy business unit or are you selling to…

[1:06:02] you know, a director. [1:06:05] if you're not able to sell your product at that price. [1:06:08] What's your advice to teams? If you are a startup, I always ask the founder, did you build this for the enterprise and is that the model you want to play or did you build this for small business? Small business is a marketing game. [1:06:24] marketing intensive activity. [1:06:25] It's high velocity, high volume, lots of dials. [1:06:30] It's a very different game than enterprise. So which game do you want to play? Let's just start there. Like which game is more attractive to the founder sometimes, you know, or, or who is more exciting to serve? [1:06:39] - Mm-hmm. [1:06:41] What's the storyline you want to tell investors? [1:06:43] That plays a lot of it into it too. Do you have an enterprise product? Are you solving an enterprise problem or do you think you're solving an enterprise problem but you're not sure yet? Your point is also mid-market is rarely to be successful. It's hard to start there because you're straddling two very different go-to-markets. One that's of high value, one that's of high volume. [1:07:06] and also mid-market companies. This is where a lot of people don't, um, [1:07:11] If it requires heavy integration, they don't have those resources. [1:07:15] That's usually outsourced to like an Accenture or like some of these consulting firms or like in now you having to rely on third parties to be involved. It gets messy. [1:07:25] This is fascinating. Okay, I have a list of questions from the audience that you pulled from Twitter. You asked on Twitter what questions to ask you as you're coming out here. So there's one that's very related to this, which is someone said, if you're still very early in pre-product market fit, but get initial validation from both small to medium businesses and enterprise, how do you decide which one to focus on? Is there a counter argument against starting or SMB going up market over time like most SaaS companies do?

[1:07:50] I've seen companies successfully do in both of those motions, truthfully. We know all those, right? We know people that started small business and worked their way up into enterprise and were successful. We've seen people be really successful by starting at the enterprise like a whiz. [1:08:04] That's more of like an internal question, which is like, what's, [1:08:07] Who did you build this for? Where's the problem most felt? And which go to market game do you want to play? And I think that latter part is so important. Like it sounds like it's why should it be what I want? It's like what's going to make a big business. But I think people forget this is going to be your life for like 10 years, right? [1:08:24] Do you want to be selling to enterprises and building all the enterprise features? Would you prefer to build for small companies? Pros and cons to both, but it's important to think about the life you're creating for yourself and your team. A hundred percent. And I built my career in enterprise sales, like upper and mid-market enterprise sales. And... [1:08:42] Yeah, that's just the game I know the best. [1:08:45] Yeah, that's also an important part of it, just to double down on that, is like, what do you have experience doing? Exactly. Yeah, where's the opportunity? Okay, another question that I love is, and we touched on this initially, but I think it's good to come back to this. [1:09:00] Someone said, customers are fascinated with what we're offering from the initial calls, but response and momentum is too slow from their end. [1:09:08] would be great to know how to fix this. Yeah. It's tough because unless you're in the weeds to understand why, is it because you're, I'll give you a few examples that it could be. [1:09:19] Did you speak to a buyer who now is trying to sell this up to their boss and it's just getting sidelined and they don't know the executive value? They've just been selling the buyer value the whole time.

[1:09:29] That's one reason things can slow down. Another reason things can slow down is you haven't really framed the problem well. And the implication, they don't understand the full implications of why they need to solve it. So it's kind of just like. [1:09:43] sitting there a little bit. The third is they've just been really nice and it's not going to go anywhere. [1:09:49] I guess that's usually the latter. Was that true or it's kind of all over the place? [1:09:54] It's so hard to give a founder a [1:09:58] Hard feedback because they've just dedicated their life to this thing. [1:10:03] Right. Like who wants to be the bearer of bad news? [1:10:06] And sometimes you just need to let the action speak louder than words. [1:10:10] We've talked about all these steps. I'm curious when you come to a founder or your team, [1:10:15] Where do you find the most unlock often? Which of the steps of the sales process do you find the biggest opportunity? [1:10:21] to [1:10:22] improve conversion and sales it's qualification qualification because if you spend your time on the wrong leads [1:10:30] That equates to a zero. [1:10:34] So if you don't get that first level right, let me put this way. Everyone that I know says they have a bottom of funnel problem. It's never a bottom of funnel problem. It's a top of funnel problem. [1:10:46] I've actually never seen a bottom of funnel sales problem. [1:10:51] It's always qualification, not qualification, which is a symptom of not reaching out to the right person, not having the right messaging, not solving the right problem.

[1:11:01] or going or not [1:11:04] not being different enough. [1:11:05] I love this. So basically the biggest [1:11:10] Pitfall people fall into your experiences. They're just talking to the wrong people, wasting their time. Yeah. Talking to the wrong people or using the wrong message or... Like pitching them something they can't actually deliver. Yeah. [1:11:23] Here's the other thing, too. [1:11:25] Sales is supposed to feel fun for the buyer. They should be like, "This feels fun. This person's invigorating. They're going to change my world. They're going to make me see things differently. They're going to get me promoted. They're going to help me increase my influence internally." [1:11:37] And so many salespeople are so boring. [1:11:40] Like how many times have you got off a call and you're like, I can't wait to get off this call. You know, founders too, they like, they like, they just like all of a sudden their passion, they go like stone cold face and it's like bring the passion, bring the energy like that is felt by the market. [1:11:56] Remember, some of these people are in boring jobs. Like, give them an outlet. So along those lines, I think a lot of people are just, like, not... [1:12:04] like me included, I feel weird doing sales. It's a weird experience trying to convince someone to buy something. Is there any advice you could share to get someone over that? [1:12:12] If you have built something that you believe in, [1:12:16] very hard to sell something you don't believe in i think everyone agrees that if you build something you believe in and they have a problem [1:12:22] That's a beautiful thing. [1:12:24] Truthfully. [1:12:25] That's what makes the world go around is I have a solution to your problem. Now, you just need to make sure that the problem, their fate, that you just need to be honest that the problem they have.

[1:12:36] your solution truly can sell for. [1:12:38] And you're not... [1:12:40] short selling. [1:12:42] just to get a logo and a deal over the line and see them churn in six months or nine months or three months, that what you are selling is truly gonna solve their problem and be honest about it. [1:12:51] I can't tell you enough when I tell someone, listen, I don't think I'm the right fit for you. They try and sell you on them. [1:12:58] They're like, well, wait a second, hold on. [1:12:59] what if we did this, this and this? And it's like, no, no, no, here's what we're great at. And then they can say, well, I also need that too. And all of a sudden this beautiful, this, this level of trust comes out. [1:13:09] and trust is the number one currency in sales. [1:13:12] If you are a trusted salesperson, people will recommend you all day and every day. [1:13:17] If you're a trusted founder, your market will continually send you leads and word of mouth. [1:13:23] So don't try and sell something just to prove to investors you sold something because it will be quickly seen on the other side when they churn. [1:13:32] Amazing. Okay, Jen, so I'm going to cut the lightning round. I know you also have to run and do real work, so let me give you a chance just to talk about what you do, how you help companies in case folks can find value in working with you. Deeply passionate about sales, as I'm sure you can tell. We specifically help founders through this pain, navigating enterprise sales, mid-market sales, and really trying to crack... [1:13:56] that first million of ARR, sometimes even that first 500k of ARR if they move fast enough. [1:14:02] And, you know, [1:14:04] it is really hard it's it's counterintuitive to what most people think but it can be really really fun when we show you the way.

[1:14:12] And you described to me how it works, and I think it's important to... [1:14:16] Clarify this like you basically embed with the team and help them. Yes, so I fundamentally do not believe in outsourcing the heartbeat of the organization, which is sales. So what we do is we embed alongside the founder and drive a lot of the execution, but make sure that they are the tip of the spear, engaging directly with their market and learning directly from the market's mouth, not playing this game of telephone. [1:14:40] Amazing. And I mentioned this when we were chatting, but I think of it again is when I was interviewing all these companies about how they started. [1:14:46] selling early on. One of the interesting threads that I heard again and again is how many of them hired a coach or a consultant as a founder to help them learn to do sales, and that's essentially what you do. I didn't even know a service like this existed, so this is super cool. It will point people to what you do. I also have to ask you the question I ask everyone at the end is just how can listeners be useful to you? [1:15:08] Help each other out. I think so many people have helped me in my career and in this journey that the pay it forward model [1:15:23] that exists in the technology space is so beautiful. So just don't let that die. Beautiful. [1:15:29] Well, Jen, thank you so much for being here. [1:15:32] Lenny, this was awesome. Thank you so much for having me. This was so awesome. So excited for folks to hear it. I've learned a ton. Okay, I'll let you go. Bye, everyone. [1:15:41] Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com.

[1:16:00] See you in the next episode.