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Need to increase sales - fundraising, partnership, or cofounder?

I'm the cofounder of Rhino Security Labs (an IT security services company) and still a bit new to the entrepreneurship scene. I'm much more than technologist and IT security guru than the business expert, as is my partner. Our technical expertise is top-notch, but with just the two of us running things, we're having a hard time with bringing business in the door. We provide security testing and managed security services to businesses - being a B2B model, the sales funnel is long and it's difficult to break into the market (I find businesses tend to go with established names rather than roll the dice on a vendor's reputation).

If business development isn't enough of a challenge, we're also on a very tight budget, as we're entirely bootstrapped.

This brings in a number of questions (as again, I'm new to the area):
Even if we had a sales person (who worked entirely on commission), would they expect/need marketing leads to act on? Does cold calling/emailing produce a worthwhile ROI?

Assuming the sales person would need marketing (of which we can afford very little), how do we proceed? Should we look into a seed round of fundraising (friends/family)? Try to find a partnership? Find a marketing/business development cofounder? Any direction or assistance here would be very helpful.

Thank you!


22 Replies

Mike Brunzell
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Mike Brunzell Entrepreneur • Advisor
Director Digital Platforms at Benjamin Moore & Co.
It seems to me that you need a third cofounder that: 1.) Really believes in your product and company potential 2.) Knows how to sell B2B software solutions 3.) Can support him/herself for a period of time as first sales are made 4.) Will accept equity for payment for initial efforts At your stage I think the right person will do sales and marketing. I would not start paying for leads/marketing yet. Get someone not afraid to cold call that is willing to work hard. Good luck! Mike Michael Brunzell [removed to protect privacy] [removed to protect privacy]
Rick Nguyen
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Rick Nguyen Entrepreneur • Advisor
Cofounder @ Spot Trender
Just on boarded several fortune 500 companies as paid clients for my video/radio ad testing startup; some key ideas worked well for me:

-Constantly talk with your potential customers. Ask as many questions as you can about their needs and their pain points. Go back, do your homework, and present to them a custom solution to their problems. I'd highly recommend you and your cofounder do this, get at least a paid pilot, before hiring a sales rep. Only then you know that your product is ready for the sales guy/gal.

-When you're getting your first sales badass: Closers generally are slow (or bad) at generating leads. Expect things to be slow if you want your closer to cold call AND closing deals. When you're ready to speed things up, use outsourced lead gen and pay per appointments only. Generally they cost $500-1000/ appointment. Qualified leads are usually defined as 1)have needs 2)have existing budget 3)looking for solution. I'd recommend only buy appointments if you know your closing rate and average deal size.

Hope this helps.

Benjamin Caudill
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Benjamin Caudill Entrepreneur
Founder at Rhino Security Labs
Great, thank you both for the advice!

Rick - what do you mean by getting a paid pilot before hiring a sales rep?

Thanks
Rick Nguyen
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Rick Nguyen Entrepreneur • Advisor
Cofounder @ Spot Trender
Hi Ben,

It's beneficial for both you and your cofounder to be directly in touch with the potential clients since day one. You need to close the first deal to understand the process before hiring the sales rep. The deal doesn't need to be big, as long as you're getting paid something. This has several benefits:
-You know your clients' needs and pain intimately.
-You hear feedback about service/product directly from client and can prioritize product development.
-You build personal relationship with first key clients.
-You validate your product by getting the first sales.

Shannon Code
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Shannon Code Entrepreneur
Chief Architect
I'm a security consultant myself (just starting in sec), congratulations and good luck. Have you considered participation in any of the security bounty programs? Research is also a great way to get know. And for this industry offering a talk at a conference or 2 might help. Another thing that I do is approach companies and offer them a free 15 hour security audit.

These are probably pretty obvious things and not the best answer, but at 3am it's what I've got. I mostly wanted to introduce myself to you and couldn't miss an opportunity to post on a security related thread.
Meetul Shah
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Meetul Shah Entrepreneur
CEO\Founder at IntentBase
You are the best sales person for your company. You need to know what works and doesn't before you hire a sales professional else it's a disaster waiting to happen. Unless, as someone suggested you get 3rd co-founder who is gonna take over that role.

Better than appt setters who may not know how best to pitch your company and would cost you arm and leg. Pay for live active conversation software such as connectandsell.com - where they guarantee 7-8 conversation an hour.

As a techies who has cross the chasm and does sales now :) Let me know if you any other questions

Good luck
-M
Sean Hurley
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Sean Hurley Entrepreneur • Advisor
Strategic Marketing Leader with strong financial results for growing organizations
I can help you. Call me when convenient. Sean Hurley Sent from my iPhone
Nancy Klein
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Nancy Klein Entrepreneur
Founder & CEO NLK® Consulting & Design,Award Winning Brand Strategist,Assoc.Professor Marketing Parsons School of Design
Hi Benjamin... My name is Nancy Klein and I saw your post on FD. I see you are looking for sales people in your own new company, however, I have a question...are you a tech expert in the sense of building Mobil apps, websites and beacons that can connect people without the use of the internet if in a 300-500 sq./ft. vicinity? Thanks so much...I look forward to hearing from you. Nancy Klein NLK(R) Consulting & Design, LLC [removed to protect privacy]-Office [removed to protect privacy]-Fax [removed to protect privacy]-Cell [removed to protect privacy] www.nancyklein.com http://lnkd.in/uebXjd www.newschool.edu
Dave Lemley
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Dave Lemley Entrepreneur
Consulting Technologist
fwiw, if you haven't already, look into some of the niches like PCI, HIPPA, etc. I don't see those words mentioned on your web site, though I see some of the services that would support those activities. Anyway, those niches have required security actions by affected organizations, and the fact of that requirement could be leveraged relative to, say, trying to sell to a client who just wants to be proactively secure, which I suspect are few-and-far between. Anyway, if you can become experts in those niches, and make it 'easy' for your clients, that is a sales point, and make it web searchable. Also, cultivate a good relationship with one or more of the major auditors, and you can fairly easily set up a mutual lead gen arrangement. And by all means, look into other niches; these just are the ones with which I have first-handed experience.
Benjamin Caudill
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Benjamin Caudill Entrepreneur
Founder at Rhino Security Labs
Thanks for the comments, all.

@Shannon - Thank you! We've done several conferences (I gave a talk at Defcon 2013 on "Offensive Forensics") and looking at continuing that in the future. Brings a lot of attention, but more from fellow technologists than clients. I'll be in touch - I'm sure we have much to discuss.

@Meetul - Never heard of that sales software before, but will definitely check it out and keep you posted. Thank you.

@Sean - You didn't provide a number to call you at (and I dont see one in your profile), but will message you on LD.

@Nancy - No, I don't have that technical experience, sorry. You're probably looking for someone with Bluetooth development experience - a specific niche that shouldn't be hard to find within LinkedIn or elsewhere.

@Dave - Good catch! Compliance testing (HIPAA/PCI/SOX/etc) is a direction we are looking into, but requires an exorbitant amount of red tape and paperwork, which is slowing that process down a bit. Soon we will be an ASV (Approved Scanning Vendor) for PCI, but that's still only a portion of the total scope of PCI.
Still, the two definitely go hand-in-hand, and we're looking to add that as a service line in the future.
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