|
|
| Home - Industry Article - Sep 02 Issue |
A Venture Partner's quarter end advice for CEOs |
By Sharon Wienbar, Director, BA Venture Partners
“How’s the quarter?” is the start of most of my conversations with CEOs during this time of the quarterly cycle. Their answers reveal many aspects of their business, not just the scoreboard thus far. CEOs typically come from a couple of different backgrounds, and those past experiences color their approach to running the company. Former sales executives often try to become sales heroes, disrupting the process and ignoring all else in a company. Marketing or technology execs frequently focus on all the progress the company has made in those functional areas without realizing that market validation requires customers to part with their money.
My advice to CEOs of almost any stripe is to “go see for yourself” how the quarter is. Look your prospects in the eye and see if they’re going to buy, or if they’re using your reps and SE’s to educate themselves on a groovy new technology. Watch your account execs in action--are they pitching what you think the company offers, or are they groping for something they think a prospect might buy? Is there a coherent sales process in place that you’ll be able to trust, with reliable estimates for forecast, upside and pipeline?
Tone from the top
In this post pick-your-favorite-scandal era, “tone from the top” has heightened meaning, and the CEO in the field can stop any funny stuff. But in addition to the integrity angle, there is also value in the CEO setting the example that everyone in the company sells, regardless of job title. The best companies pick their target customers to create momentum, devise a sales plan, and pull out all the stops to land those accounts. The senior guy in the field prevents the company from developing a “sales is messing up” attitude, and sends the signal “supporting sales is everyone’s job.”
You are never “too senior”
Many startup CEOs come from bigger companies where there is a long and well-defined ladder of command, and the sales cycle maps progressively more senior executives with their customer counterparts. Forget that! In a startup, as CEO you are the tallest midget compared to your Fortune 1000 customers. Your relative budget/stature probably maps pretty closely to the person who, in the end, will most influence your sale: a director or VP of IT or a business unit. Don’t waste your time on early sales calls and don’t think that “C level” calls are all the startup CEO should do. You will learn about their actual concerns and objections, the environment in which your product will play, and what your competitors’ selling points are when you listen to a system administrator pick apart your product.
Customer count counts
Revenue and a reasonable cost of sales and marketing is key to long-term business success. But in an early stage company I worry less about sales efficiency metrics and average selling price and more about getting customers through the entire sales process and into the closed column. This flushes out possible lurking issues: Is anyone willing to pay to solve this pain we thought was a big deal? Can our sales execs ask for and get an order? Do we have contracts and the other mechanics in place? Plus, every account won is one the competitors didn’t get.
The company learns even more post-sale: Does the product work as sold? Was our product a high enough priority for the customer to assign and complete implementation support and user training? Are our customers happy and referenceable, or did we love ‘em and leave ‘em? Can we improve our sales efficiency with lower cost follow on sales? Is there a business here? If the company can reliably close business, especially without heroics (Board introductions, lots of customizations) the company gets to go to the next stage and figure out how to sell at a higher price, faster and at lower operating cost. I’m a big believer a system has to be in motion to deliver feedback, so close any reasonable business--then figure it out.
Board “management” is really simple
In this world where customers rarely buy and even great companies struggle to make plan the CEO needs to be able to diagnose the situation to the Board. “It’s tough out there” is just an excuse; bring us the data, your interpretation of it, and your action plan. I don’t want to run your company—that’s why I crossed over to “the dark side.” I do want to know that you’ve done your darndest to create a product, process and culture to deliver results sooner rather than later, otherwise I may conclude there isn’t a business opportunity—or that we have the wrong CEO. So, “here’s what we’re doing,” and “here’s my educated estimate,” are the best answers to how the quarter is coming, and the best ways to build a business. Happy selling.
At BAVP, Sharon works with enterprise software and Internet infrastructure and services companies. Prior to joining BA Venture Partners, Sharon led marketing at Critical Path and Amplitude Software and was responsible for driving product/service and business integration strategies which led to growth from $16M to over $140M revenue in one year. Before Amplitude, Sharon led Adobe Systems" entry into and growth in a number of segments, including enterprise applications, web commerce, and Asian markets. Prior to Adobe, Sharon practiced strategy consulting at Bain & Company. Sharon holds both a BA and MA in Engineering from Harvard University, and an MBA from the Stanford Graduate School of Business.
 
|
|
|
