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Evaluating a Business Development/ Sales Partner
It has been a year since we launched our website, and a year of hard work bring out product from concept into reality. I found a technical partner, and then another one. The Product is in a great place, we signed our first major partnership and I found a marketing partner (on Founders Dating!)
Now we are priming the pump for our public launch at the end of this week. Boom! The marketing and PR are under full swing...
So what's next?
I think it is time we considered bringing in a BD/ Sales partner.
My question is: What do you think the best criteria for evaluating this person should be? The founding team has a strong product and technical background, but our experience runs thin when it comes to growing a powerhouse sales team. I am a little worried about our ability to attract and vet the person with the right "fit" for us.
Do we need a growth hacker?
Do we need someone with enterprise experience to grow a team of 20 people?
Thoughts on the best approach?
Methods to measure their skills?
Techniques to insure how their previous numbers would translate to our SaaS business?
All opinions on the matter appreciated.
Kate Hiscox Entrepreneur • Advisor
Boss at Venzee
Hi Matthew, What exactly would they be selling and who are the target customers? By the way, congrats! Just a quick FYI, the site isn't rendering correctly on my phone. It sort of does and then stops. It looks like it's responsive so I thought I should mention it. Kate Sent from my iPhone
Lawrence I Lerner Entrepreneur • Advisor
Digitalization and Transformation Coach
@Kate great question! Mathew selling skills are very much tied to the person's past experience. Sales execs I've hired for my services organizations have come from that background. Making the transition from selling products or other disciplines can take a year or more.
There are a lot of different things to consider. Could you share a bit more about your business, the model and what a potential install/sale looks like? For example, are you selling quantities (E.g., we make custom designed logos for mugs and sell them by the thousands to dozens of clients) or complex installs (e.g., sell water filtration systems that cost $50MM to install). There's a lot in between those two examples.
John Wallace Entrepreneur
President at Apps Incorporated
If you have access to the customers, I'd strongly suggest you do the early BD yourselves. It is such a critical role that I can't see handing it off to someone else until you gain some traction. If you don't have access to the customers, then getting a sales rep might be needed. Find a rep firm that specializes in your customer base and has a proven track record with similar products. If possible, ride shotgun to his meetings. Getting face time with customers is essential for the executive team. You'll also know firsthand just how well (or poorly) the sales rep is handling your product.
Benefits of doing BD yourself: You will gain firsthand knowledge of why people are (or aren't) buying your product, you can refine pricing strategies, ask "what if" questions, create pipeline forecasts that aren't being filtered by a sales guy, figure out how to beat competitors that that prospects are considering instead of you, plan your pivots based on real world data, etc, etc, etc. This is mission critical business intelligence.
Best book I ever read on BD was "S.P.I.N. Selling" by Neil Rackham. (http://www.amazon.com/SPIN-Selling-Neil-Rackham/dp/[removed to protect privacy]/ref=sr_1_1?ie=UTF8&qid=[removed to protect privacy]&sr=8-1&keywords=spin+selling). I do a lot of BD, and I use ideas from that book all the time. It's about as scientific asBD gets.
Matthew Cordasco Entrepreneur • Advisor
Co-founder and Head of Product
@Lawrence & @Kate. (thanks for the heads up on the website.)
Sorry for the lack or clarity and details, here is a breakdown:
We are a Freelancer marketplace. Customers can use MyCrowd to find, hire and manage freelancers. Similar to oDesk, eLance, fiverr, etc. We actually aggregate several platforms in our backend, so we currently have 10 million workers available.
Its a two sided market (customer on one side, workers on the other.) We focused on solving the worker side first and now that is done its time to drive customers.
One of our biggest value props is that we are building out tight integrations into specific pieces of software to make all this super easy. This is relevant because there are several levels of selling:
1) High level partnerships. Getting our button inside other software so MyCrowd is one click away.
2) Affiliate partnerships. Finding affiliates who have a natural fit in the ecosystem, could become a channel, etc. and setup a rev share.
3) Selling into companies, who would use the service at volume (10-100 employees)
4) lower level sales force pounding the pavement (or email) to get single users onto the system.
Our rev model is simple- we take 10% of each transaction fee.
#1 and #2 could be very big deals. As an example, I am discussing a partnership with a major A/B Testing Software provider to bring MyCrowd into their app and to help service their 6k customers. We integrate into their software, then we co-market to their customers. This could obviously scale very fast. But this relationship took months to build.
Affiliate deals could look something like a Site Optimization company referring customers to us once they consult and tell them what needs to be done. They could hire designers and programmers on MyCrowd to implement. We would do a rev share. Setting up the partnerships is key here.
#3 and #4 is more direct sales. Leads come in through our marketing efforts, and we will also have an email marketing campaign.
@JohnWallace - I'll check out the book. Do you have a recommendation for a BD firm?
I have personally tried to sell to all four target groups and have had some success with each, but I cannot scale my efforts enough to move the needle. I need help. As John pointed out, maybe hiring a rep, maybe hiring a BD firm, maybe bringing in a sales partner to help build out this side of the practice.
And that is the crux of the question....which direction do people think I should go?
Doug Goldie Entrepreneur • Advisor
Experienced Web Developer, Architect, Consultant or Coach
+1 for SPIN Selling !
In a previous life, I was a commissioned-only salesman. Great book!
Lawrence I Lerner Entrepreneur • Advisor
Digitalization and Transformation Coach
Mathew, thanks that helps put a lot of perspective on your needs.
I'd offer that this is a volume based model (you need many clients to become successful). The buyers cut across all industries but have a common theme in that they are in the procurement processes. Those buyers may be small shops or large enterprises. You'll need to capture their attention, in a low cost but efficient way. Creating content and using to to drive adoption is one way.
Some other thoughts:
The people who need or buy your services would seem to be the same people who use it. One option might be to crowd-source the freelancers and make a simple referral process for them. Either for other freelancers or affiliates. Your cost to build should be low and it's a variable cost model to you. You can provide upside to them in the form of cash or a small percentage of every deal they bring to you. You'll know what's best for your business.
A single business development person might need to cover too many companies to be effective. If you choose to go with a telemarketing firm. You'll need to provide them with a script. My experience is that the good ones, tell you they need a script and interview you about your business and needs. They refine the approach from there. The script should be less than 300 words and immediately establish a value proposition to buyers (e.g., we currently have 2,467 [type of freelancer] within [miles] of your company. Their contracts typically last [months] so we always have a pool of about [headcount] coming available.") Again, you'll know what's best for your business and the telemarketers should know the questions to ask you.
BTW, I use a four step process for problem solving that's been branded as "Constructive Disruption."
I hope you've found it useful.
Rob Gropper Entrepreneur
Director at PetHero, SPC - Member at Eastside Incubator - Principal at Tuxedo Technologies Group
Matthew, congratulations on your pending launch. As you have no doubt discovered, this is not an easy problem to solve. I'm happy to spend some time with you on the phone/skype to help you digest this and break it down into a game plan. i have built and managed revenue teams for small, medium and large tech companies and there are a lot of moving parts here. the next issue will be how to find, recruit, compensate and measure performance. A few questions:
A. Are you committed to the role of revenue generation as a founding partner role or does this role report in somewhere lower in the company? My personal take on an MVT (min. viable team) is Tech and Revenue (revenue leaning toward sales or marketing depending on target markets). Both are required and need to work in lockstep. Other roles can come later.
B. Who is your ideal prospect?
C. what is the key value proposition for this prospect?
A couple of random points in no particular order:
1. be sure you understand the difference between BD and sales. BD is focused on partnerships and sales is focused on... sales. Similar skill set, but different execution and comp models (typically). Hard to incent and comp one individual to do both and keep them on plan.
2. looking at your FD profile you are targeting SMB with plans to target enterprise too. your comment above indicates that "businesses 10-100" is still SMB. Are you planning to target enterprise too? Those are two very different animals and the teams needed to effectively grow each market are quite different. the difference goes to the core of the team members and their personalities so don't try to hire 1 to handle both - i've never seen it work effectively. You can find a CRO who can oversee all (sales, BD, marketing), but it seems to me right now you need more hands-on skills and a plan to build your revenue team over time.
3. "spin selling" is a good overall sales primer. If you want your sales and BD teams to really understand complex sales (critical if you want to penetrate the enterprise) then i would highly recommend "Strategic Selling" by Miller Hyman (sp).
4. Growth hackers are yet a different animal. BD, inside sales, outside sales, growth hacking, marketing, PR, all require different skills and provide different levers to pull to drive growth.
5. How you evaluate the skills of these individuals is different, but relatively easy as it all comes down to results - "how much profit/revenue did you generate in each of your precious positions?". "how long did it take you to make your first sale?", etc. All these positions should be results focused and measurable, with possible exception of marketing and BD - it's harder to value a particular partnership or marketing/SM campaign.
6. I would avoid outsourcing either sales or BD which is what you are doing if you hire a "firm". At this stage you need to be glued to all partner and customer interactions as much as humanly possible. One exception would be to hire a lead generation firm (smaller is better in your case) to feed a small outside sales team IF you intend to go after the enterprise. "outside" sales still means they are your employees.
7. i would avoid a 'shotgun' approach and put a great deal of thought into identifying and defining your ideal prospect. Be disciplined and build a team to surgically address this prospect before you broaden your target customer.
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