Early-Stage Sales: Four Tips for Startups

Raph Parker was the first employee and VP Sales at Segment, CGO at Newfront Insurance, and is now an advisor to companies on their $0 to $10 million ARR journey. I sat down with him to talk about the hard-won lessons he’s learned throughout his career, as well as the advice he gives to founders today. Here are four of his most valuable GTM tips for companies navigating early-stage sales.

1. Focus more on the product people are buying than the product you’re selling 

When Segment, a customer data platform, was selling to small teams or individuals, the product was about making it easier for product or marketing teams to try new tools without burdening the engineering team. But as the company sold into enterprises, buyers’ motivations were suddenly wildly different. We learned that, while the product may be built to solve a specific problem or set of tasks, that might not be the reason why a prospect is engaging; in fact, the reason may not even be about the product at all.

For instance, some buyers just need to hit a quarterly OKR. Some want to be involved in finding new tech because it helps them get promoted. The fact is that going out and finding a category-creating vendor is usually not in someone’s day-to-day set of responsibilities—there is often some other motivating factor, and it’s pretty important as a seller to understand not just what your product does, but how the prospect sees your product and where it fits within their own set of priorities. With that in mind, rather than just focusing on the technical problem and the product’s capabilities, Segment focused on its buyers, their organizations, the impact of the product on their careers, etc. This context was essential to our success as a sales team.

Consider how your product maps into the rational goals and needs of the people you’re selling it to: Do they have a KPI they’re trying to hit? Is your product going to cost someone their job? Is buying your product going to require spending political capital? Knowing the answers to these questions in advance are helpful in crafting your sale.

2. Focus on how prospects want to buy your product as opposed to how you want to sell your product 

Most founders start by tracking their deals in Excel and later set up a CRM. They google “CRM stages” and prescriptively outline the journey they’ll go through with the customer. But an even more effective approach is this: Once you have a good feel for your customer’s buying process, map your sales efforts to their behaviors—how they typically learn about new vendors, how they metabolize and process that information, how they balance fear and ambition, and how they create consensus and buy-in. Your goal is for a prospect to go from knowing nothing about your company to being so convinced that they put their own political capital on the line to drive it through.

One phrase often discussed in sales is “happy ears.” You get off the phone with a prospect and they’re incredibly excited about your product’s capabilities and how it will help them with their job. They tell you they’re going to circulate internally and try to get buy-in. You hang up the phone, high-five your co-founder, and get ready to talk about it in your next investor update email. But what’s the experience like for the prospect? They may get off the phone and realize they’ll have to go to their boss’ boss to get approval for a vendor that’s only going to make their own life easier, but will require off-cycle budget and could potentially piss off someone in another department. It’s important to recognize ahead of time that this might happen and think about how to prepare your prospect for that moment such as collateral you can offer, follow-up calls to create a groundswell, and more.

Empathy is critical. Recognize what your product means to the companies that are thinking of deploying it and organize your sales process around how companies make decisions. You can’t decide these things for yourself—these are complex organizations, and champions can help you anticipate and navigate them.

3. Use a sales deck rather than jumping right into the pitch

For many founders, the most important sale they’ve ever made was when they pitched VCs to raise a round. They then take this “lucky” deck and repurpose it into their sales deck, but this can be a serious misstep. For example, a reasonable investor pitch might begin with “The world of chemical procurement is slow and broken”—but when a founder starts a sales pitch like that to a room full of chemical procurement professionals, it can come across as incredibly condescending.

Even worse is using no deck at all! That can work when you’re selling your product to the very narrow slice of buyers who’ve already considered the problem the same way you have, decided they want a specific kind of solution, and are just talking to you to see whether your solution fits their own understanding of the problem. But the majority of the time, this doesn’t work.

Founders, beware of speaking too much about product specifics, and not enough about how this will lead to actual, demonstrable change in the prospect’s own personal or professional life.  It is very important to lay out an agenda: Explain who you are, what will be covered on the call, and the impact that your product offers, all before you prove that everything you told the prospect is true, by showing it in action in a live demo.

4. Don’t shy away from asymmetries, exploit them

When you’re a small army trying to compete with a large army, you don’t meet them on an open field because they’ll destroy you. You lure them into the forest, into the mountains, where their large, lumbering war machine bogs down, and where your tiny size allows you to strike and confuse. Similarly, when you’re a small company going up against established incumbents, don’t lean on messaging that makes you sound identical to them or even try to look like an equal player because they have far more assets and logos than you do, and you’ll be exposed. Instead, try telling a narrative where your comparative smallness, your newness, is proof that you’re more innovative. This might sound like, “At previous companies, we tried using tools like Competitor X, Competitor Y, and Competitor Z—none of them could solve the key problems we were facing. So we founded our company to finally provide the value we saw was missing in the market.”

The fact that you’re small and new is not a knock against you, but a reflection that the older, more established companies were so ineffective that they necessitated the need for a new generation of startups to solve the problem. That’s a line of attack that Companies X, Y, and Z can’t really refute, and it’s impossibly irritating for them to try to answer, “Why are there new companies entering the space if you really solve these problems?” Opportunities for these types of asymmetric, guerilla tactics abound. Find them.

Sales, done at a very high level, is all about context-specific strategy and tactics. These are just some generalized lessons from working with a few dozen companies in the $0 to $10 million ARR stage. If you are a B2B SaaS founder building (and selling!), we’d love to hear from you: Naomi Ionita (naomi@menlovc.com) and Raphael Parker (raph@miltonstudios.us).