|
|
| Home - Industry Article - Nov 02 Issue |
Software CEO Summit
continued... page 2 |
Stay Inside to Succeed
This topic generated the most heated discussion. A couple of participants were alumni of BMC Software and other firms that sell almost exclusively via telesales. Those folks espoused the opinion that “any compromise is a mistake” and it’s a compromise to put sales people in the field while you’re trying to build the business. Most other participants, many of whom are former VP Sales themselves, were of an opposite mind: the best place to put sales people is near the customers. These guys thought it especially important to use evangelical field sales for early category creation. These two camps agreed to disagree in a gentlemanly manner, but “much discussion ensued” as they say in Board minutes when things get hot.
Phone sales work especially well for products targeted at the department level within an enterprise. Get a handful of groups actively using your widget and soon you spread like crabgrass. If another vendor tries to swoop in with an enterprise-wide deal they will have to dislodge you and disrupt loyal users first…and if you spread up and over fast enough the competitors will never even know there’s a deal, or you’ll control the RFP anyway.
Both sides on the inside versus outside argument did agree that making sales over the phone is not only desirable, it’s possible, especially (or rather, only) if your company has the right product and targeting down pat.
Measure, manage, motivate
In 2002, the holy grail for VC’s is a predictable business model that equates some level of spending with more revenue. Our most seasoned CEO’s at the meeting focused the most on measurement, and thought their best sales managers did the same: “Bill knows that every time he picks up the phone it is worth $1.47.” Remote people need intense micro-management because you can’t tell if they’re goofing off; mangers require them to report weekly on calls, meetings, pipeline accounts and discounts.
When hiring, look for simple motivators from your sales execs, typically either money or raw desire to win. For an early stage venture chose only folks who chomp at the bit for a low base and a high on target commission.
Put the Tech Team in Sales’ Shoes
The group gave consistent feedback that a company’s technologists need to be involved not only with, but in sales, on calls or with the customer. Don’t let the nerds look down their noses at sales…get them to help set revenue targets, then comp your senior architects and CTO on revenue just like the senior sales team. This tactic increases the company’s chance of getting a product customers will buy instead of one they can be sold.
How to Hire the VP Sales
A recruiter once advised me the best challenge to issue a candidate for sales VP is “show me your W-2.” That advise is bunkum according to the BAVP CEO’s—look for someone with high earnings last year and you may get “the tumbleweed who rolls from hot deal to hot deal” who isn’t hungry to build a winning team. The CEO’s agree that the only way to find a great sales exec is to have another one doing the interviewing, “remember, he’s a salesman” was their refrain. But they noted it’s key to look for a history of success in “push the jungle back” evangelical sales and situations where the exec won from the underdog position. They also noted that a good sales exec or manager is not the same thing as the top sales person; good managers bring good people with them because they know how to manage and motivate the team.
Can I Get Some Leverage Here?
How to make mo’ money, without using yo’ money is what channels are all about. So how to do it well? The CEO’s shared several tactics with each other: pick your channel partners by asking your prospective customers who they buy from; find categories for adjacent products if you’re in a totally new category (one veteran noted that the first PC channels were a combination of low end minis and high end calculator channels); choose partners of your own approximate size so your sales success is meaningful to their numbers; message your prospective partners with value propositions for them, not the end customers, but be as refined in targeting that message as you are with customers; leverage big strategic initiatives of the 800 pound gorillas (.Net, SunOne, etc.) to gain marketing dollars and find market makers. Oh, and the product has to be right to go through the channel.
The First $5M Isn’t the Hardest
An established multi-time CEO started the interactive session by surveying the room on which phase is hardest: $0-5M, $5-25M, or over $25M. Answered clustered in the early stages though each phase earned at least one vote. He then offered the trick answer: they’re all hard. At each stage a company must manage different kinds of people, master new skills, and overcome new problems. But reaching the next level is a massive motivator itself.
At BAVP, Sharon works with enterprise software and Internet infrastructure and services companies addressing high value business issues. Sharon sits on the board of Stratum8 Networks and works with BAVP's investments in PlaceWare, OuterBay Technologies, and XTRA Online.
 
|
|
|
