In start-up companies the CEO should foster the vision, however, if it is all about the CEO’s knowledge and experience and it cannot be ‘extracted’ and leveraged, you basically have a one-person company with a support team. The challenge is in finding the first sales people that can leverage the CEO’s vision. Steven Blank (author of “ Four Steps to an Epiphany” ) coined the expression “customer development” to address this. Sales people with this ability are very rare.
When I am recruiting sales people and they tell me they have done or want to do ‘business development’ I run. In my experience ‘business development’ translates into, “I want all the glamour and fun of sales with none of the accountability.” In other words try to give a bus dev person a quota and they will quickly move on to the next sucker silly enough to give them a salary…
A background in consulting is ideal for startups. I’ve been [primarily] in sales for over 25 years. With a couple of stints at Fortune 500, most of this time has been with early stage startups. I’ve learned that at least in tech, there are three primary offerings: hardware, software and services.
• Selling hardware is relatively easy; it either meets the spec or it doesn’t.
• Selling software is more difficult as it is somewhat ‘mutable’ and different scenarios can make this complex.
• Selling services is essentially matching somewhat nebulously defined assets and capabilities, with somewhat nebulously defined requirements and resources. This requires “out of the box” thinking AND business acumen.
The best sales-oriented customer development team member should have a services background. Essentially, their job is to match the start-up’s loosely defined assets and capabilities with a hypothetical and probably equally ill-defined customer need. The result should be that the company makes money and the customer perceives value for the money spent. The real bonus is when after doing a post mortem on the deal it is determined that the deal is replicable.
Towards that end, I have been in three startups (Boston-based, DC-based, Silicon Valley-based) that thought they had it nailed after closing their first deal and built the company around it. They all failed. Interestingly enough, one of them was a former employee of Steve Blank’s and highly touted the customer development approach: he then went on to break all of the rules… In fairness to him, when he gave me Steve’s book he said something to the effect, “Bill, you really don’t need to read this. You already get it.” So I guess he wasn’t all bad…