For every stage, there is a salesperson

Does this situation sound familiar?

Your product is about to go into beta. Your employees are all engineers or product people or designers. You, the CEO, are the lone business person. You know that you have to figure out monetization (you’ve been telling people your model will be “freemium” but you haven’t really done any work on nailing down the details). You’re not sure what your pricing structure should be. You might have a pre-beta list of email addresses you’ve collected from a sign-up page you drove people to. But, there are lots of things you don’t know and need to know:

  • What’s the profile of a typical customer and how do I source and qualify them?
  • Who to sell to (product manager? head of marketing? head of sales?)
  • What to charge and what pricing tiers to offer?
  • How long does it take to make a sale and what’s the ratio of leads/sales?

Basically, you don’t know squat about selling your product and what it’s really worth to the market.

The natural inclination is to hire a salesperson to “figure this out”. But this is where a critical mistake is often made, and I want to talk about a *generalization* I like to make about sales people when making hiring decisions.

I believe that there are two kinds of salespeople: Expeditionary Salespeople and Process-Oriented Salespeople. (In general, I’m skeptical of people who divide the world into two buckets, so I understand any skepticism that comes from my doing just that.)

They are both extremely valuable. But, they are valuable at very different times in your company’s life cycle. Hire one type at the wrong time and you’re almost certainly going to part ways or radically undershoot your potential.

Expeditionary sales
Expeditionary sales folks are fantastic in early, ambiguous situations. They don’t mind selling an incomplete product. They relish in calling nearly anyone that they think might have a need for what you’ve built and in learning about product/market fit. The great ones don’t just report back to engineering “the customer wants X, please build” but instead use judgment and knowledge about what you’ve already built to map to what the customer is trying to do (but not necessarily asking for). They can make up pricing on the fly if necessary. In short, they almost look a bit like business development folks, but the key difference is that they thrive on the game of getting people to open their wallet and spend.

Let me give you an example. At JotSpot, our first sales guy was named Eugene Levitsky. I hired Eugene right about the time we were going beta. We had 15,000 email addresses of people who were interested in getting access to our service when it was ready. We suspected we were going to be a freemium offering, but we had no pricing structures in place. We had let perhaps 100 people use what we had built.

Eugene dove right in. He called on our first 100 users. He sussed out what they were using it for. He sensed when it was being used for something critical and started asking people for money (despite the product being in beta and us having no published pricing). He tested lots of different prices on the fly. He tried various pitches to convince people that what we were doing was valuable. In short, he made a ton of things up, he explored a huge range of prices and pitches, and he zeroed in on what worked. In the sales world, he was doing the equivalent of the rapid prototyping that great product organizations do. He was perfect for that stage of our business.

So, what are expeditionary sales guys bad at? Well, in general, they like *new* challenges. When something feels figured out, they get bored. They have greater resistance to traditional sales quotas and targets (but they know they come with the territory). They certainly don’t like formal processes because they feel “too rigid”. And, for the most part, they’re not thinking of how to build a massive sales “machine” with repeatable methods for identifying and qualifying customers, checklist-driven process for engaging with customers, and banging the phones or email queues to drive sales.

A time for change
There comes a time in the mid-life of your sales development, where you, the CEO, need to help transition from expeditionary sales to process-oriented sales. I’ve heard of the rare expeditionary sales person who can also take what they’re learning in the rough-and-tumble early days of selling and turn it into a more checklist-oriented, scalable sales process. But, I myself have not seen it. Most likely, you, the CEO, will have to pick the brain of the expeditionary sales person,  and take what they’ve learned to craft a more repeatable, scalable, process-driven sales method.

And, you’ll likely have to hire a new head of sales.

(For those of you wondering what happened to Eugene, Google bought JotSpot before we were ready to move to a process-oriented approach.)

Process-oriented sales person
At this stage in your company’s life, you probably have a product that fits the market reasonably well. But, your sales costs are too high, your process feels sloppy and unpredictable, and the sales cycle is too long. In short, you need someone who thrives not on figuring out new things, but on optimizing the process in front of them. You want someone that truly enjoys building a sales *machine*.

Process-oriented sales folks love repeatable, scalable methods. They love efficiency. They track their teams with detailed metrics. They implement software systems. They crave predictable growth. They think about building teams and managing groups of people to a target. And they come from highly process oriented sales cultures like Oracle, IBM or SAP.

So, where do things go wrong? Things get bad in a two primary scenarios

1) You bring in a process-oriented salesperson early in your company’s life. This goes very badly and there are several symptoms. The person expects the sales “script” to be figured out. They expect you to know the position/profile of the person you’re selling to. Engineering is constantly upset because sales keeps saying that they *would* be selling if only the product had some set of features that it doesn’t currently have (expeditionary guys are masters of selling what you’ve got, even if it’s not a perfect fit, instead of selling futures). This usually ends with the salesperson leaving.

2) You hang on too long to an expeditionary head of sales when it’s time to move to a process-oriented approach. This is typically characterized by the CEO feeling like there’s not enough predictability in the business. There’s resistance to the CEO’s questions about finding patterns for the repeatable profile of the people you’re selling to, and the timeline of leads to prospects to sales. The CEO wants greater reporting and visibility into the pipeline. This scenario should end in bringing in a new head of sales and moving the expeditionary person onto a special projects team (of one or two) that tackles the new products and initiatives that the process-oriented folks don’t know how to sell.

So, when you think about sales, think about these two types of salespeople and make sure you hire the right one at the right time.

For every thing, there is a season.
For every stage, there is a salesperson.


93 Comments

  1. David Mytton says:

    Expeditionary sales sounds very much like what the founding CEO should be doing, particularly the way you described how Eugene was calling the first beta customers to find out exactly who they were, why they were using the product and to test out pricing.

    Of course this depends on how many people are on the team and how many calls have to be made. In a funded startup there may be the resources to have dedicated salespeople doing this in the early days before discovering and transitioning to the process-oriented model. But it seems like crucial information that the CEO should really be involved with before delegating it to a sales team once that process is figured out.

  2. Matt says:

    Sure the CEO should do this – If their strength is sales. But often CEO’s at tech companies don’t have that gift. They are often first and foremost technologist. And since Joe is generalizing I will too. Technologist generally don’t like having random conversations with non-technologist doing needs analysis that end with them asking that person for money.

    Asking someone to sign an agreement and give you (sometimes large) amounts of money for a product that is half-baked is a gift. Good salespeople have that gift. Some CEOs do, but from my experience in many start ups, most don’t.

  3. Fabio Krauss says:

    Great post!

    I must say that it fits my moment as a glove! My cofounder and I were discussing exactly this earlier today. Thanks for your opinion!

    I also think the CEO should do this along with the sales person. I guess it is important for him to actually see how the product survives out there in the real world so he can make the organizational arrangements to adapt to that.

    I would be too late if the news about the product came in through the sales guy.

  4. David Alexanders says:

    Hello Joe,

    I am the former Creative Director of Faberge and designer for Montblanc; now an ambitious entrepreneur with a healthy disregard for the impossible, creating the next big Luxury Branding Concept, moving beyond the luxury branding models established by esteemed brands as Hermes and Louis Vuitton.

    I am trying to reach you or Bill Maris, but I don’t know how, there are no contact details on your website.
    Could you please help me out?

    Many thanks and best regards from the Principality of Monaco,
    David Alexanders

  5. Shelley says:

    You lost me at beta.

  6. Kevin Willey says:

    All this is wonderful information, shot of how does one contact you?
    How does a small start-up get in touch when they have a ground breaking set of applications.
    Would you believe the end to credit card theft, identity theft, secure virtual wallet?
    These are side benefits for a project to secure the cloud computing for the enterprise, and offering security for the bring your own device policy adopted by many companies.

    Back to the question, how does one tell you the potential VC about this?
    Maybe I just did, or maybe some admin reads this and it goes no where. Hope not…

  7. My idea for a startup creates and maintains “chat rooms” for specific business locations, organizations, military bases or neighborhoods that may be accessed by any user in that specific location or remotely from other locations via mobile device. It is more of a “public” chat than anything currently available, so users would be able to remain anonymous unlike the friends on Facebook or Foursquare. This application is less about the user and more about the location, allowing people to connect with other people they actually have a chance of meeting. The uses are anything from announcing great pizza on the buffet to connecting with someone cute at the pub to alerting soldiers or students of a problem on a campus or base. Businesses would be able to post coupons and ads on their location which would eventually provide monitization for the application. I do have a patent pending.

    I have done some inquiry into development and have been informed that it may cost up to $20,000 to bring the product to market. I believe it would require additional funds to keep the program up to date with technology and to market it properly.

    I would very much like your thoughts on my idea and it’s prospects.

  8. Mike Landis says:

    Does Google Ventures get into the financial services sector? If so, how does one submit a plan for consideration? The site seems to be absent the usual and lacks an easily found submit form.

  9. Tony Garcia says:

    Hello. Please allow me to introduce myself. My name is Tony Garcia and I have a biz plan ready and I would like to discuss a project that my team and I have been working on that will generate billions of end users.
    Who is the best person to speak with to further discuss.

    Best Regards,

    Mr. Garcia

  10. David Braun says:

    Great post. Clearly comes from own experience. I do agree that if CEO could do that and have kills to do that – that would be the best way to do but as others have said in most cases CEO’s are truly tech guys and it is very hard for them to do that type of job.

    P.S. People please stop pitching your startup ideas in comments, there is a procedure submit your startup idea to the fund – please use it.

  11. Joceli Romao says:

    I was in the Google-SF in the morning, for to try one appointment, and the people told me is impossible.
    About this: “P.S. People please stop pitching your startup ideas in comments, there is a procedure submit your startup idea to the fund – please use it”. I do and nothing dont work. Plz I need help for submit my idea or one appointment for talk about. Thx and sorry about.

  12. cesar suero says:

    i don’t think you guys are looking for the next big thing as i seen on charlie rose and if you are make a bit more easy to find.

  13. John F. Culhane says:

    I doubt that any product or service fulfilled would generate more revenue in a year than mine would in one day, after its inception. I just need the right team to partner with and give me 10%, if that’s not too much to ask. Please contact me at your convenience to discuss.

  14. Blair James says:

    Thanks, Joe. I just figured out what went wrong at our beta launch. (Fizzle). I had a process sales person in place – loads of experience in traditional, enthusiastic about the product, but couldn’t deal with all the unknowns. (In our case, getting customers through the install process and identifying road blocks along the way. )

  15. Mr. Lim says:

    d/b shopping and shipping systems is looking for $3 millions in vc funding to develop and monetize its innovative technologies and its shopping and shipping infrastructure.
    d/b shopping and shipping systems is a game changer, it’s solutions to high costs of online shopping and shipping will disrupt current shopping and shipping ecosystem.It’s services will bring disruptive changes to how we shop online and how goods are deliver to online shoppers.
    It’s shipping services will help major shippers such as UPS, FedEx and usps expand their shipping capacities by at least 20% without incurring any major capital expenditures and cut the time to deliver each package by 20%.
    It’s shopping services will cut costs and time of online shopping by 50% for online shoppers and online retailers.
    Our shopping and shipping services and system infrastructure have monopolistic characteristics and we provide transaction fee based services.

  16. michael s. says:

    I had an idea which we followed. A $60 million company we built in two years with huge profits & cashflow & which we sold. I now have an idea for an application that rides on back of online grocery shopping. It is simple, easy to do and could make large profits. I have many, many other ideas. Do you have any facility that listens to them?

  17. Pedro says:

    This is a great take on the types of salespersons for the season. As an expeditionary salesperson, it’s exciting to see a VC expert recognize and articulate the differences in the roles and the justification for each.

    Many CEO’s think a salesperson is a salesperson, which is true in the sense that a salesperson must focus on specific desired actions – like getting commitment from a prospective client in the form of a signed deal where money gets turned over. But the distinctions that Joe makes are invaluable for CEOs to understand.

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  19. william says:

    Great post i am currently in the phases of trying to figure out how to bring some type of revenue to make my newly developed network become self sufficient. My site is http://www.thenxtstar.com I have daily submissions sent in via email, and currently offer my site 100% free to users and members, besides ad revenue I would like to figure out or have a team help me figure out how to take this site to the next level.

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  21. Thanks for the post. Good read.

  22. Uli says:

    How to contact Google ventures or the premium content initiative ?

  23. Sam says:

    Hi, Would any one tell me how to get in touch with Google venture to start a venture. I have an Idea which I want to bring into the world.

  24. kevin says:

    Like Sam – how do we communicate ?
    regards

  25. iurii vasilii says:

    First of all I want to say hello, my name is Yuri Vasilii from Moldova and I want to note that investors looking to fund my idea. So in what consists the idea:
    1) This project developed entirely by me, acts as an intermediary in the sale of property that is the provision of services using the battle realting auction
    2) The first and most important is to build this empire building, because it also is because this market segment
    not and will not ever compete, competition can have only companies that build buildings to be sold by us
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    4) The most important is that my using reverse auction, and will give you an example:
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  26. Neal says:

    Excellent post Joe. Expeditionary sales people love the challenge of creative problem solving through social exploration.

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  28. Ritz says:

    I am looking for some funding and possible change in healthcare cliff if I can get my idea looked @ and possibly implemented.

  29. Thinking Amy says:

    You are correct Joe. The challenge, the hunt, the tweaking of the pitch, these are what excite us as expeditionary sales folks. I am a sales based founder who is very creative in finding and solving industry problems but always looking at the bottom line. Call me, “old school” but I fail to understand how you guys can dream up a company that would be a “neat app” or another cloud storage company, go for funding, then try and figure out how to make money with it after it is built.

    Sales looks at features of your product / service and the benefits provided to the customer. The more your features cure the pain the customer now feels the more you can charge for your product / service. I am amazed at the dollars thrown around to founders with no clear idea of profitability! Guys SALES drive REVENUES which is what should be used for valuation not multiple rounds of financing. Why is it I see companies with $100mil of investment and no revenues? HELLO better start looking at the revenue side of the house rather than crossing your fingers hoping someone will buy the cash sucking deadbeat, but oh so hyped up, company. Remember the dot com bust???

    The first people I wrote down to add to my team are all SALES folks that are tops in the industry. They are not the first in, but when ready to launch I know I have already figured out who I need to sell my product. A top sales force is much harder to build than any other part of a company. Sorry guys but techies are a dime a dozen, while the top process-oriented sales team is priceless!

    Amy

  30. Maksim says:

    My English is very bad. But i have a small startup in Russia. How can i communicate with you?

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  39. Mark Goodson says:

    Joe
    This is a great post. I wrote a post a year or two ago about the “Hunter vs. Farmer” issue that’s well known in sales. I’d kind of felt that being a “hunter” (expeditionary) sales person was the best thing to be. It sounded a lot cooler and more active. But both types are needed. Many companies leave money on the table because expeditionary sales people have moved on to new hunting grounds and lost interest in existing customers.

  40. Philip says:

    I admire Google as the world’s most innovative company. But not innovation at any cost, clearly Google is trying to work within their self-imposed values of only doing good in the world which is actually beyond ‘doing no harm.’ Even more impressive.

    However sometimes when you are so focussed on creating or helping to create the next big thing it is easy to overlook some significant business closer to home. I believe Google is uniquely placed to nurture a new industry, create satisfying well-paid work for tens of thousands of people around the world, do a lot of good and add a billion dollars per year (1000 million) to the bottom line within 5 years, using technology that Google already has now.

    It is a lateral thinking exercise, while we are striving for the new how do we get full value out of what we have now?

    Many people on this thread are asking ‘how do I get to make a pitch?’ I too would like to pitch my idea to Google. I presume you have some sort of filter that you use to get back to people, so I will await with optimism for your reply.

    Communication like this can become the stuff of legend; Google demonstrating that they are still nimble and responsive enough to chase down a promising lead and turn it ito something special and at the same time humble enough to know that not all good ideas come from within.

    A billion dollars in five years? Or just another impregnable monolith with feel good spin? Time will tell I guess.

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  48. shankar says:

    Joe, Why do you think one guy can not be both? Based on the requirements he can be expeditionary sales and then move to the process oriented sales machine. In the early and growing stage, he can step in to the role of expeditionary and find a sales model/machine that works and move gradually to process orientation.

    Can you please tell me why it doesn’t work that way?

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