Sales Training Myopia of Tech Start-Ups
May 18, 2016
Sales Training and Start-ups
Why do some start-ups make it and some don’t?
As one might suspect, given the staggering number of start-ups formed every year, there is no shortage of information on critical success factors. Some common ones are: Timing, working capital, and the leadership team. In addition, the ability to develop and sustain a viable growth plan is seen as one of the more difficult and tricky success factors. If you attempt to grow too quickly you end up being stretch too thinly – grow too slowly and you miss the window of opportunity.
Now all this seems fair enough. However, since we are in the sales training business we were particularly interested in what was being said about creating innovative sales training and developing a superior sales team. The good news was no one said it was a bad idea. The bad news was nobody was talking about it. Sales training was not on the radar screen. Now, there was attention to marketing plans and getting the sales reps smart about the product – but not to sales skill training.
It could be that a more comprehensive review would have produced a different story in regard to sales training … however; I suspect that is probably wishful thinking.
So given that we think sales training deserves consideration for a seat at the table, we thought it would be useful as a first step to review some of the reasons why technology start-ups often do not place a high priority on sales training and fallacy behind those reasons. Let’s take a look:
1. Why build one when you can buy one. In many start-up lots of things are going on simultaneously and the major commitment is all about launching and marketing the “product.” So yes, a sales force is needed but it seems a lot easier just to go out and hire some high performing reps from other companies in your market – after all “selling is selling” as they say.
We agree, the “buy one” idea has a certain short-term seductive appeal, but it also has numerous long-term pitfalls. First, the old notion about selling is selling has proven again and again not to be so true when you are engaged in a complex sale. For example, if you are a start-up in the medical device market and you “buy” your reps from those that are available from the pharmaceutical industry, the myth of selling is selling will quickly be unmasked.
2. The mirage created by early-adaptors. The early adaptor story was first told in a compelling fashion in Geoffrey Moore’s 1991 book – Crossing the Chasm. The message is as important today as it was in 1991 and it is a partial answer as to why sales training may not an initial high priority in many technology start-ups.
Early adopters buy a new product very early in their life cycle. They easily imagine and appreciate the benefits of a new technology. Early adopters do not rely on well-established proof in making these buying decisions instead they count on their intuition and vision for getting it right. It is fair to say they buy products that are new and exciting – you don’t have to do that much selling with early adopters, so there’s not a big need for sales training.
But then comes the chasm period – early-adopters have been exhausted and the mainstream market is waiting to see if the product really is one that can deliver sufficient value. Now you do need a skilled sales force.
The trap is doing too little, too late in terms of sales training. It takes time to develop a skilled sales team and the momentum can easily be lost before the sales team can effectively sell to the mainstream market.
3. Underestimating the competitive threat. Sometimes a company comes up with a truly superior product as compared to all the other competitors. There is always the “killer product” scenario like the Xerox copier vs. the mimeo machine. But this is not a common occurrence.
If you are in the great but not killer product situation there are two common traps. In one case your new product is superior but the competition has one that is “good enough.”
The second problem is a time warp issue. Unfortunately, in many cases it is very difficult to maintain a competitive advantage by product alone for any sustained period of time due to global competition and advanced manufacturing technologies. Today a competitor is likely to launch a product that is just as good or better than yours, in half the time of yesteryear – plus it is likely to be cheaper.
The lesson learned is you need a sales team that cannot only sell value but also add value.
Unfortunately all too often when a start-up launches its first product, the product fails to produce the anticipated sales success. One reason is the investment in developing the skills of the sales team to sell the new product is simply not commensurate with the commitment and innovation of the rest of the launch effort.
This omission constitutes a strategic missing link. Even an extraordinary new product will not sell itself beyond early adopters. The sales team needs not only comprehensive product knowledge, they also need to fine-tune their sales skills, adapting them to customer requirements related to the new product. The more innovative the new product – the truer this proposition.
Most companies take the first step and provide their sales team with technical training about the new product. But talking about the characteristics of a product and selling the value of the new product are two very different things. Perhaps, in the end, it would be a safer bet for start-ups to train then launch versus launch then train.
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