Article
11 Surprising Truths About Early-Stage Startup Sales
From the archive. This post was published July 24, 2024 and is kept here as written, so parts of it may no longer reflect how we work today.
Rushing too quickly to validate in the market can often be an ill-fated activity.
Hint: It suggests you're likely falling victim to bias rather than learning (i.e., testing obvious points/truisms). Speed to invalidate/refine is much more important. It's easier to see what's not working than what's ‘sort of’ working. Also, the market is efficient; assume someone else can get there just as fast—unless, of course, it requires purposeful iterations and decisions.
Early customers buy access to the founder before the product.
Hint: After initial validation and traction, you must prove the founder isn't the product. :) Balancing act.
Day one market vision is (almost) never the same vision that takes you to product/market fit.
Hint: Never wait for the product to go to market. See point #2.
Learning/selling to a warm network breeds more false positives and slows you down.
Hint: This is not a representation of the true market, and GTM math is still invalidated—there are more unknowns lurking.
A founder will have the highest win rate.
Hint: Passion/visionary-led sales are the highest performing.
Outbound leads should have a higher contract value than inbound.
Hint: You get to target and pick, and execs seldom inbound - they delegate and have someone else do their research and become educated. If you're not educating, you’ll likely be in a bake-off.
Early on, you can be ‘further away’ from product-market fit when selling to enterprises than when selling to users/small businesses.
Hint: value outside the product, i.e., services, customization, flexibility, etc.
To break into the enterprise, you can't be a comparable.
Hint: Procurement teams will first suggest that the business unit aligns with existing preferred vendors.
More leads is seldom THE sales problem — esp. early on.
Hint: Fewer leads with a high win rate can be just as successful.
A long sales cycle (12+ months) suggests a problem, OR you’re a commodity, which is also a problem early on.
Hint: Enterprises will pay for services and pilots to learn and ensure the best fit — and this is the fastest way for you to get feedback. If you don’t own this, they are paying someone to educate them and set a strategy — you've likely lost the deal.
Traction/success abroad seldom puts you further ahead in the U.S.; it often requires some unwinding.
Hint: Product and vision are shaped by the local market, and seldom does a local market strategy/vision fully translate abroad. The longer you wait to expand into the U.S., the longer it will take to sort product/market fit.