It is common entrepreneurial wisdom that good ideas often come from trying to solve your own problems. It’s no surprise then that many startups are building solutions to do just that, and therefore need to sell their products to other startups.
Many underestimate or miscalculate what it takes to successfully sell to the startup market. Why? Because most startups only consider these three points when thinking of selling to other startups:
- Speed: It’s faster to sell to startups than it is to Fortune 500 companies.
- Decision-making: It involves fewer people to make a decision. Often it is only the founders.
- Purchase power: Many startups have raised funding and are capable of paying for products that other small businesses with similar revenue would not be.
What many people forget is that selling to startups is like aiming at ever-evolving, fast-changing targets. It requires an incredible amount of speed and flexibility in the sales process. Below I outline some key challenges that you need to keep in mind if you want to successfully sell startups on your products or services.
1. Get To The Point
Startups and their founders move fast, and so do their buying decisions. When pitching a startup, be sure to save everyone the time and get right to the point. Forget the cozy conversation around your sale, just make your pitch, manage objections, make sure there is a fit and need – then make it happen!
2. Pitch Without BS
You can’t sound like a slick sales person when selling to startups. Startups like to buy from people who understand their needs and the unique challenges they face. While pitching founders you can safely assume that you are talking to pretty smart people, so respect their intelligence and make sure you’re honest and up front about your product and its capabilities. Most founders have pretty good BS detectors so save yourself and them time.
3. Create Immediate Value
Startups don’t care about what is going to benefit them in coming months, quarters, or years. They may not be around long enough to see that value materialize. When selling to a startup, make sure you demonstrate the value of your product and how it can benefit them now. If you can save a startup time, give them relevant data, fuel their growth, or help them hire and maintain talent, then you’re probably onto something.
4. Keep It Simple
Throw out everything you learned in business school. In true startup fashion, the best way to close deals is to make things simple. Don’t convolute the sale with long contracts. Eliminate bureaucracy. A simple email with the terms and where to sign up will do just fine. Don’t optimize your purchasing process for risk – optimize for simplicity.
5. Follow Up Relentlessly
This is true with any type of sales. However, with startups it never hurts to shoot quick follow-up emails over to founders. Short and sweet emails like “Friendly Reminder” or “Let’s sync up” or “Checking In” all go a long way. Founders are very busy people and are constantly pulled in multiple directions. Make sure you stay “top of mind” and manage their decision-making process actively.
6. Stay Current
When you’re selling to a startup you’re selling to an ever-changing customer. Have constant communication with them to learn about what’s going on with your customer that month, week, or day. Make an effort to anticipate their changing needs and company direction, and be flexible in meeting their needs.
These challenges are true for almost all sales, but the intensity, speed, and flexibility that is required to sell successfully to startups is often underestimated. For most growing companies, selling to startups will only be the beginning, but it’s a great way to enter the market and address a small niche that has a loud echo chamber. You can generate quick wins and gain massive momentum if you do it right.