Sales for Startups, Verkaufstraining, Market Offering, Channel Management, Operational Support, Operative Unterstützung, IT Setup

Product „vs“ Traction for Startups

Startup founders have a natural aspiration to do everything yourself. This is challenging as you usually have two to three times more roles to fulfil then full-time employees and budget available. This can trigger the question “Shall we focus on product development or sales?” The schoolbook answer is “Both”.

Most great startups are built by technical founders — and I say this as a “business guy”. Technology is at the core a bigger lever to change things for the better and build a company around it. The answer to the question above is often “Product and technology matter more. People will find the product by themselves and buy it because it is awesome.” Not the case on Planet Earth, unfortunately.

I am convinced none of us always buy the technologically best product on the market — even if we want to. We need to find, understand, test and buy a product. Your job as a company is to make this customer journey as easy, compelling and scalable for your customers as possible.

As guidance, I love the 50/50 rule to spend 50% of the time on the product development and 50% of the time on traction* because of its simplicity and clarity. So if you are technical founders with a small team, you probably spend more than 75% on product development and less than 25% on traction. If you pulled off the rare stunt of product-driven-growth, that is awesome. If not, there are usually 3 scenarios:

A) You invest in sales and marketing to win customers because you need cash.

B) You find VCs that do not force you to get customers — at first.

C) You run out of money and go home.

Scenario C sucks. So you want to pull off A or B. But scenario B requires you to do A. VCs need you to increase your ARR (Annual Recurring Revenue) and decrease your CAC (Customer Acquisition Costs) within months not years. Now what?

Get sales support — should be easy as you only need a guy in a suit explaining your awesome product to customers. It is, if you can spend a $150.000 salary and do not need the person to understand your product and have an entrepreneurial mindset to build the company with you. Writing this with a Swiss perspective, you have the additional challenges of high risk aversion, opportunity costs, and notice periods of often 2–3 months. This can make you end up with the bleak outlook that to you need 2–3 months each for recruiting, notice period and on-boarding. What can you do in these 6–9 months until your improved sales setup will be fully operational.

Get better at sales yourself. Especially as a startup CEO, you need to stay at the front line to close deals and get real market feedback to improve your product. There is an abundance of great books on sales, so read books like The Challenger Sale, The Brain Audit, Predictable Revenue, New Sales Simplified and Traction.

But even more, take action and go out there. Ask friends, partners, but also customers directly why they buy from you — and why not. What problem you solve for them, who is really using your product, and how you are better than your competitors. Then carry out what you learnt.

Only great traction will enable you to build the great product you aspire to change the world with.

Remarks: This post originally appeared on medium.com

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