How to Sell by Tyler Bosmeny

All right, good morning everyone! We are halfway through Startup School. Can you believe it already? Wow! Yeah, or more correctly we will be after this week. This is going to be a great week of talks, lectures, conversations. Today we have Tyler from Clever, who's going to give a talk on "How to Sell" to begin with. And afterwards, Harsh and Amin from Triplebyte are going to talk about "How to Build an Engineering Organization." Two pretty important things if you want to build a successful company.

I will start off quickly with my usual administrivia. We will shortly be sending out a midpoint feedback form for you guys to fill out. We really will appreciate getting as many responses as possible. This is our form of talking to our customers, you all, and getting feedback. We're always trying to improve Startup School. We hope to do it every year and make it better every year, so please tell us what you think and what you think we should change.

Adora and I were talking a little bit about updates, and I've talked to a bunch of people live and some on the forum about updates and what makes sense for updates. And just to put it bluntly, think hard about your metrics, the ones you're using. Do not use metrics that are not really measuring the road to success for you. It's something you're making up. Any startup that you're building is an enormous, complicated, difficult, crazy task. And no matter what you're doing, if there is no milestone on the way to that, to achieving that enormous task, then you're kidding yourself, and you're not really a step on the way to success.

Those milestones are more than anything for you to measure that you're making progress towards your goal. So don't make stuff up because you think that's what we want to hear or just because you're bored. It won't help you. Okay, as always, problems, etc., email to startupschool@ycombinator.com. And with that, I think, Tyler, we are ready to go. So my good friend Tyler Basmati from Clever.

Hey everyone, it's an honor to be here. I was speaking with you today. Thanks for having me. My name is Tyler Basmati, I'm the CEO of a company called Clever, and I wanted to talk to you about something that I think is one of the most fundamental and important things any founder needs to master which is sales.

Before I get started and share some of the things I've learned and picked up over the way, I thought it might be helpful to share my own personal journey to sales as something that I've come to learn and just, you know, really appreciate and respect as a craft.

When I was in school, when I was in college, I was a math major. My graduate degree was in statistics. I was the last person I ever thought would ever do sales. My own journey to getting here was that I was working on the college newspaper. I joined the college newspaper; it seemed like a fun thing to do. I had some friends who were on it, and one of the roles they had open was they needed somebody to run the advertising for the newspaper.

So I was spending, in college, hours a day, you know, figuring out how to sell ads to local businesses so we'd have enough money to print and put out the paper every day. And over the doing this for several years, if you know anything about college newspapers, you know one of the biggest determinants of how much money they make every year is how well the economy is doing. A lot of the ads are for recruiters, but I just happened to be there during some very good years.

When I was leaving the advertising sales team, we set records for the Crimson, and so we just, you know, we sold a lot of ads. I thought, okay, this is interesting. You know, it's an interesting craft. And then as I was getting ready to graduate school, you know, getting ready to graduate, go off to college, or excuse me, go off to work, you know, I'm doing math. I'm thinking to go off to finance, do a hedge fund, something like that.

A buddy's starting a company, and he says to me, "Tyler, I need you to come join because you're the only person I know who knows how to do sales." And let me tell you, I was offended. Like, this was not how I saw myself. This was not, you know, what I imagined doing after school. But I was also really intrigued, and I was really good friends with this guy, and I said, "Oh, you know, why the heck not?"

So I ended up going on a very different path and joining his startup, building a sales team. You know, we were selling to newspapers across the country, and if you've ever worked with or thought about newspapers before, you can imagine they are very hard customers to sell to. So I really cut my teeth and had a lot of fun, frankly, over many years figuring out how to sell into this market. We sold to a lot of newspapers.

Then fast-forward a little bit, and I come on to start Clever. One of the co-founders started through Y Combinator about six years ago. If you don't know anything about Clever, you know, we're a single sign-on platform used in schools, and today over half the schools in America use Clever. So we've really done a lot of selling and really had to figure this out once again in a different context.

I was thinking about, you know, what would be most helpful to talk about, what I'd most want to hear in your shoes, or what I most would have appreciated knowing when I was first starting to cut my teeth on sales. That's what I want to share with you today; it's just things I've picked up along the way, some observations I've had, and hopefully some practical tips that you can take home and implement, you know, as you get your startups off the ground running.

Sales has a lot of mystique and a lot of lore around it—or at least it did to me when I was thinking about sales early in my career. You know, when we think about sales and we think about people, you know, a lot of us picture Don Draper. We picture these people who are so charming, so impossibly funny, who they always have the right line at the right moment to win the deal. You know, they're of course incredible golfers. This is how sales is portrayed in every movie in every TV show.

A lot of people go through life thinking that this is what sales is about. And because we have this mystique of what sales is and the types of people who can do sales, I hear founders say very often things like, "Well, right now we're just building the product, and once it's finished, you know, then we'll go and hire the salespeople."

Well, guess what? Hire the salespeople—that's you! And it looks nothing like the mystique, and it looks nothing like the lore. In my experience, you know, this is my co-founder Dan in the early days of Clever, and we were doing sales. You know, here he is on a broken chair in a three by three call room. I think he's eating a bagel because he probably didn't have time for breakfast. That's what sales looks like!

You know, could not be further from the Don Draper imagery that a lot of people think of. So sales is you! And, you know, Y Combinator's Paul Graham—I remember when we were going through the program, Paul Graham got up on this stage and he said, "You should be spending every moment of every day doing one of two things: building your product or talking to users." Talking to users is a big part of that, and it can be selling.

So this is a core responsibility of every startup founder—it's not just building the product, but also talking to your users, understanding their needs, and, as you'll learn, that is really a big part of what selling is. So this is a core responsibility for founders. You know, a lot of founders think, "Well, I haven't done sales before." And that's true. And they say, "Well, I'm not good at sales yet." And that could be true too.

But one thing I've learned is that as founders, you also have some very unique advantages that can make you actually powerful at sales and very potent. The two advantages that I've noticed: one is just your passion. You are more passionate about the product that you're building and selling than anyone in the world because otherwise, you probably wouldn't have irrationally quit your jobs and moved in with your parents or whatever you've done to start this company.

So one is your passion; that is so powerful in sales. The second thing you have is industry expertise. You know this problem better than anyone. You know why it needs to exist. You understand this problem more deeply, hopefully, than anyone. And so these two things—even if you've never done sales before—I mean, you can be incredibly effective, so don't think otherwise.

Early on with Clever, one of the things we did that really worked for us was I had two co-founders, so there were three of us, and we just decided that one of us had to own sales. It was so important that we needed one person to be thinking about this every day, and so that ended up becoming me. My other two co-founders were focused on building the product and implementing the product, and I focused—we decided this was important enough that I was going to peel off and spend almost a hundred percent of my time selling this product, starting from before it was even built.

So from that point, you know, from early enough on, think about who in your company is really owning this, and it should probably be a founder, and it should probably be as much of a full-time job as you can spare. So now I want to talk about how sales actually works. And if you know anything about sales, you know, Sales 101, a lot of people talk about it like a funnel.

There are different variations of this funnel; I have a really simple one that I put up here. Step one of the funnel is finding prospects—prospecting. These are leads who might even be interested in buying your product, who might even be interested in taking a call. From there, you have conversations. Okay, so you figured out they're interested, but you've got to have a lot of conversations to figure out if this is the right product for them or not. Third is closing. Okay? They actually want to buy the product; how do you not snatch defeat from the jaws of victory and lose the deal? Oh yes, to go through a closing process.

And if you complete all of those things, then hopefully you are in the promised land and you have revenue when you have your first sales. So this is how I think about the funnel, and what I'm going to do now is just walk you through each of these stages and share how I've approached these in my career and some tips that have worked for me along the way.

Your mission in the first stage of prospecting is to figure out who will even take your call. And one of the things that for me was really helpful to understand is, well, you're going to hear "no" a lot. You're going to start talking about a new product to people, and you're just going to hear a lot of "no's." But one of the things that was really helpful for me to understand is you have this technology adoption curve this was put out by a guy Everett Rogers in the '60s. It starts on the left. You have your innovators; then you have your early adopters of new technology or early majority, your late majority, your laggards. These are terms that people in Silicon Valley throw around that I'd been hearing for years.

But what I didn't know was that the inventor of this framework, this technology adoption lifecycle, Everett Rogers, describes it as a bell curve. He actually went through the effort of quantifying the area under the curve in each of these different segments. One of the things—so one of the things you notice is, looking at this, the innovators segment is just 2.5 percent of the population. That means 2.5 percent of companies will even consider buying a product from a startup that is unproven with no revenue.

When you realize that, some founders—that's kind of depressing, like, "Wow, that's a very small percent of the market!" But when I found this out, I actually found it massively motivating and massively invigorating because all of a sudden it makes what you have to do really clear. You have to talk to a lot of people because you have to find that 2.5 percent. It's a numbers game. It means you're going to have to reach out to at least 200 companies to find just 2.5, on average, who are even, you know, potential buyers for your product.

You're basically playing like a version of "Where's Waldo?" You know, where you're looking for the very few companies who might be in this innovator segment. So expect early on—sales is not reaching out to, you know, 2, 4, 10 companies. Reaching out and doing sales is a lot of grinding, and it's a lot of effort in order to get the result you want.

When it comes to actually starting these conversations, I found there's three things that work for me. So in terms of finding those innovators, the first thing that worked well for me is using my network. The second, which is a little surprising to people, is conferences, and I'm going to talk about that. The third is cold emails. These are the three ways in which I find prospects.

I'm not going to talk about my networks; I think most people understand that. But I can tell you many of the earliest deals I've done at every company I've been at have been through people I've known—friends of friends. So do not underestimate your network, especially if you know the industry. You might think it's not very big, but you probably know a few people, and those people might know a few people. And so spend some time thinking about your network because you might find some really great sales opportunities that come through there.

Those are the best. You don't need a hundred people in your network to get to sales; you can usually do it with much fewer. But let's talk about conferences because I think conferences are the most underrated aspect of sales and one of the least understood aspects of sales. When I say conferences, a lot of people think I'm talking about, like, CES or E3, and going to, you know, some place where there's 80,000 people, and it's basically more like a rock concert than anything else.

When I say conferences, I'm talking about something very different. Usually, they look like this. Usually, it's a bunch of, you know, executives or people in a hotel room cooped up for a couple of days, you know, oftentimes, you know, in places like Milwaukee or Kansas. And let me tell you, this is such a powerful way—these conferences are such a powerful way to meet your users. You have to go where your users are. And many times, if you're selling to a business or to a corporate buyer, this is where users are. They go to conferences; they're there with their peers; they're learning, and that's where you should be.

Now let me say a few words about how I've approached conferences in the past because this really is where so many of Clever's initial partnerships and customers came from. First, figure out what are the big industry conferences for your product in your startup. Usually, there's not just one; usually, there's like 10. You have to work to figure out what they are. Ask people in the industry, "Where do you, what conferences do you go to? Which ones are on your radar?" But there's usually, quote, "there's usually quite a few and definitely more than one."

Second, pick a few that you're going to attend. Buy a ticket. Sometimes they're expensive, you know, thousands of dollars. Sometimes you don't even need a ticket; you know, it depends on the event. But figure out the conference and decide you're going to go, hopefully weeks or months in advance. Third, get the conch—get the list. This is such an important part of making conferences like this worthwhile. Find a way to know who's going to be there. Write to the organizers; write to sponsors; you know, maybe it's on the website, but figure out who's gonna be there in advance.

Don't just show up at a conference and think you're going to, like, network your way and meet everybody. Although, if you can pull that off, by all means do it. It's just not something that everyone can do. But when you have the list of who's going to be there, then you can email people in advance and say, "Hey, you know, I'm going to be at this event. I noticed you were, I'm working on this thing. I'd love to show it to you; can we find some time to chat?" And don't just do it with a few people—do it with as many potential buyers or prospects as you can.

My goal when I go to a conference or when anyone from Clever goes to a conference is that we have our entire days booked up in 30-minute increments because we've done so much effort in advance of the conferences trying to line everything up, getting these meetings, and they end up becoming the most productive day of the year when we actually go and we actually get to have all of these conversations and have all of these buyers. I get to the end of a night, even the first night at a conference when I have just been doing one day, and let me tell you, every time I am exhausted and I am also so energized because there's nothing that's more fun than meeting with customers and meeting with potential buyers and hearing their reactions to what you're building.

So I cannot emphasize enough how important conferences have been in every aspect of every company I've worked in sales at, and I highly recommend you explore this. So that's conferences. The other and frankly, the, you know, more probably more common approach is cold emails. People don't really cold call too much anymore; maybe you could make it work, but cold emails—I mean, I still do that today. And a lot of people are—don't know how to write cold emails; they don't know how to, you know, reach out to someone in a productive way. I know this because I'm on the receiving end of so many bad cold emails; we probably all are.

They're really long; they're not personalized. They're not actionable; they're boring; they're irrelevant. So don't do that. But if you don't do that, like, well then what do you do? How do you have a cold email, you know, strategy that's effective? In the early days of Clever, in the early days of other startups, we would sit down and we'd send, you know, 10, 30, 50 emails to cold prospects, and it would look something like this. And I've actually found an old email, and I put it up here so you guys can see it. Feel free to copy it, but it is the simplest thing in the world. You'll notice it's short, it's to the point, it's personalized, it's actionable.

"Hey, my name is Tyler, and I'm the CEO of Clever. This is, you know, what we do. I thought this might be relevant for you because of XYZ reason that's, you know, personal to you. Even if you're not in the market, I'd love to chat with you about this," which is true. "Do you have some time this week?" "Later this week, I'm free, I'm free now, or you know, I'm free at this time." Super simple, super—you know, this will probably get read as opposed to some of the paragraph-long, you know, diatribes about why my product is the best and why you're crazy for not using it, and before we've even met, all you're trying to do is get a call with somebody and actually meet them.

And so, we'll send out cold emails; it's very effective. But, you know, make sure you do it right; make sure you're writing emails that are interesting to people, that aren't too salesy, that are personalized and that are genuine. And remember, all you're trying to do is get a conversation; get it out of that prospecting phase and into stage two, which is conversations.

So let's talk about stage two. Stage two, okay? If you've gone to conferences, you've done cold emails, you've worked your network, and now you're talking to prospects, this is exciting! People want to talk to you; they might want to buy your product. This is what you've been waiting for. When this happens, and you get them on the phone, remember to shut up and listen.

And when people ask me, you know, "What's your number one sales tip?" "What's the number one..." when new salespeople say, "What's the number one thing I should practice or work on?" If you take nothing else from this presentation, take this: Sales is about listening. I've had the opportunity in my life to shadow some of who I think are some of the best salespeople in the world—incredibly successful salespeople—and they look nothing like the picture I showed you on the first slide. You know, they were soft-spoken, and what I remembered specifically was that they were world-class listeners.

The reason that's so important is because that's what sales is at its core. People think sales is about just, you know, like a battering ram and just hitting, you're getting your points across and repeating them over and over until somebody finally, you know, breaks down and buys your product. Let me tell you, that doesn't work.

What does work is building relationships with people, understanding their problems, understanding what their needs are, and then seeing if you can help them with your solution. And in order to make that happen, you have to listen. So most founders—when I've shadowed a lot of sales calls, one thing I see very frequently is a founder— they’re so excited they finally got someone on the phone. They're hooked; they're definitely going to be the first customer.

They get them on the phone, and they just talk. It's understandable, right? You're excited; you're excited that you know about your product. You're passionate about it. You can't wait to show off every bell and whistle that you've spent months thoughtfully building. But it will totally kill your sales deal. What you'll naturally do is talk for seventy percent of the time on the first call, and you know, maybe leave 30 percent of space for the other person.

The best salespeople in the world, when I've seen them in action, it's the opposite. They're listening 70 percent of the time, and they’re asking questions like, "Hey, tell me about the problem you're having. How do you solve it today? Why did you even agree to take my call? What would your ideal solution look like if you could have anything?" They're asking questions because they care, and they want to understand, and they want to figure out how to help this person solve their problem.

And yes, their product might be part of that solution, but it involves deep listening. You know, we have one trick I can share on this: We at Clever use a tool called Uber Conference. Every conference is great, but one of the things I love about it is at the end of each call, it sends you an email, and it tells you how much time you spent talking versus how much time the other person spent talking. It's funny because I can look at these, and it's a running joke. I'll look at these, and you know, sometimes you'll talk to someone and say, "I just got off a call; it was great! I nailed it; you know, they're gonna definitely buy."

And then I'll look at the Uber Conference, you know, call email at the end, and if it looks like that, I'll say, "I don't think that call went as well as you think. I don't know if we're really, you know, ready to make that sale quite yet." And so the number one thing that I hope to impress on you today is sales is about listening, and it's not just about, you know, a hacker, you know, asking the right questions; it's about genuinely listening.

And if you can do that, the rest is easy; it really is. So you've got them on the—you've spent all this time prospecting; you've now even had your phone calls; you've done a good job listening. And then one thing—another thing to know about sales is there's a lot of steps to the process. You know, up here, I have a lot of different steps that you might go through in a sales process: calls, emails, pricing calls, you know, sending references, talking with different executives. There are a lot of steps to sales!

And up here, these aren't just hypothetical steps; what I've put up here are actually all of the steps from one of my very first deals at Clever. This is one deal, and frankly, some of the stuff is kind of embarrassing, right? Like, met the person; they were interested. I emailed—no response. I emailed him again—no response. I emailed him again—they responded. I scheduled a call—email—no response. I mean, this is straight-up embarrassing, and this is from someone who wanted to buy our product. Isn't that crazy?

So one of the things I hope to impress on you is it is a lot of work to do sales well, and it takes a lot of follow-up, and you kind of have to have this inhumane willingness to just keep going and push through. This whole lifecycle probably took about two months. It ended up—we ended up closing a hundred thousand dollar-a-year customer, but this is what it took.

And I talked to a lot of founders who maybe they have a good meeting, they do a follow-up email, and they don't get a response, and they're like, "Oh, well, maybe they weren't interested after all; maybe it's not a good fit," and they disqualify themselves. Well, just remember, this is what a success case looks like, at least if you're doing enterprise sales. It's not over until it's over, and it's not over until they say no.

But sometimes you do have to kind of remind them, you know, "Hey, I'm still here! Hey, are you still interested?" Because probably your buyers have a lot on their mind that's not you or your startup, and probably they have a lot of other things going on in their life. And so being persistent isn't rude; being persistent can be helpful if you do it in the right way and you're respectful.

Now, I will say one thing here: Follow-up is really good and really important, but what's also really good sometimes is getting a "no," and getting those "no's" can also be really good and really helpful because when you're a small startup with this, you know, founder small founding team, you've got to figure out where to spend your time and energy. And you can't have a pipeline of hundreds and hundreds of deals going at one time; you just can't. You won't be able to do it.

And so there's actually a lot of value—my friend Steve Garrity taught me this—there's a lot of value to driving conversations to a yes or no quickly because "no's," you can move on and start filling the pipeline with other people that could become "yes's." So I would encourage you to have relentless follow-up; you know, be determined. Don't let things drop. But at the same time, if you get a "no," you know, see it as a blessing in disguise because you can move on to the next deal that could be a "yes."

Okay, so you've prospected; you've had these great conversations with customers; you've, you know, made it through the rigmarole; you've gone through all these steps. Now, let's talk about closing. This is an area that just—it's weird; it's foreign. So you have to figure out how to close a contract with a customer who's told you they want to buy. It's harder than it sounds; a lot of deals get messed up in here.

So let me just walk you through a few things I've learned. One, assuming you're doing an enterprise contract, you'll need an agreement, and then you'll send it over to the company and they'll want to change the agreement—though it's a process called redlining. And then their lawyers will send it back to you, and you might look at it, or your lawyers might look at it. You might have more changes, and you go back and forth in this redlining process.

So the first step is you need to have an agreement to propose. And by the way, they're going to expect it from you. They're going to say, "Okay, you know, when they're interested, they're going to say, 'Send me an agreement,'" and make sure that you have something or you've been working on something so that, you know, it's not like, "Oh, I'll get back to you in a month."

If you don't have something, I've good news, which is if you're not aware, YC has an open-source sales template posted on their website, and I worked on this with James Reilly, Nick Proctor, and some other folks, including the Y Combinator legal team, and wisely decided to open-source this so any of you can use it. Obviously, you'll probably need to customize it for your needs, and at some point, you want to get counsel.

But as this basic starting point, there's a free template that you can use for sales on Y Combinator's website. Once you have your agreement and you're going into this back and forth, I'll never forget it. I have seen some founders let this process drag out for months, fighting over the dumbest things.

When you are at an early-stage startup, when you are trying to get your first customers, early customers are like manna from heaven! If you get—and if you don't get them, you're not gonna go very far. You're done! And yet, I have seen startups in the early phase because they think that what they're supposed to do, or someone gave them bad advice, quibble over the dumbest things.

So my advice for you is when you get to this step, especially for your first early customers, they're going to want to put weird things in the contract with indemnity clauses and warranty clauses. Don't say, you know, get it reviewed by a lawyer. Don't sound anything dumb, but your goal is to finish and move on. Just keep that in mind, and if you're going through four or five or six revision processes, you're doing something wrong.

So figure out how to move this quickly, and don't quibble over small things; get the first customers because that's what you need to, you know, keep going. Okay, another closing trap—you've got the customer interested, they want to buy, things look great, and they come to you, and they say, "Hey, actually I want to buy, but only if you had this one other feature would I buy."

It sounds so promising; you're so close! They just want one more thing. Sure, you can build that thing; it wouldn't be that hard. Unfortunately, once you start hearing this—in my experience, unfortunately, it is more often a pass than anything else. And the thing to remember is, unfortunately, building that one thing—when someone says, "Oh, I would buy it except it's just missing that one thing"—if you built it, there'd probably be another thing after that and another thing after that.

And you don't want to be in a world where you're building lots of one-off things for customers. Now, your first customer, second customer, do what it takes, folks. But, but very quickly, you get in a world where you keep—where you start hearing this, and you realize it's not a good thing.

Two ways I've seen of solving this: One is, well, if you really want the sale, and you really want to hold them to their word and have that commitment, say, "Okay, well, I'll build it for you if you agree to, you know, get it done by the product," which means I can't demo for you today. I can't, you know, show you reference customers on this thing you want, but I will build it for you if you sign up. And if you've spent the time listening and building the relationship and they trust you, that can work.

The other thing is you say, "Look, we're going to build what you know customers need, and we're going to wait until we hear from four more customers." And, you know, oftentimes I find even in that case, if they still want the product, they'll buy it even without that one feature. And hopefully, end up building what they need anyways, but, but at least then you're not building something for just one customer.

Third closing trap: free trials! You get so close to someone. They're so interested; they're your perfect first customer, and then they say, "Yeah, we’d just like to try it for 60 days." Folks, when you are starting your company and when you are out there trying to make your startup work, you need things like commitment, validation, you need revenue. And guess what? A free trial doesn't get you any of those things.

And so at every company I've been at, I've never worked at a company where they did free trials. We just said, "We can't do it. We're spending a lot of time out here trying to find the right customers for our product. You're spending a lot of time building the right product. You know, we're not gonna give it away for free on the hopes that maybe you'll decide you want it."

But we flipped it around and said, "But we want to be reasonable, and we know you're taking a chance on us. There's risk. So we only do annual agreements here; that's how we operate. But if for any reason you're not satisfied in the first 30 days, you can opt out of the agreement, and there won't be any penalty to cancel."

And flipping it and having it that way where the default is they're a customer but if something goes wrong, they're still protected actually meets both parties meeting in the middle, and it solves for their concern that they're taking a risk on someone new while solving for your concern which is that unique commitment and validation to keep going and way better to be in a case where the default is that they're a customer than the default is, "Well, you need to renegotiate something in 60 days from now," and you're right back where you started.

So to the extent you can avoid the free trial trap—so that's closing! So now you know how I've approached prospecting, how I've approached the conversations, how I've approached closing. Happy to answer questions on these when we break, but just to end on some final parting thoughts. What I've described here is the enterprise sales process I've used going from 0 to 1 million, our first million in revenue. This is the exact process we've used multiple times, and it's worked.

But not every company—well, every company is different! And one of the things that I love to encourage founders to think about early is what kind of company, and specifically what kind of sales motion are you going to have in the long term? Kristof Chua, who's a VC, has this really incredible blog post. I just love how memorable it is. But he says there's five ways to build a hundred million dollar business from a sales perspective.

If your average customer pays you a hundred thousand dollars, well, then you just need to find a thousand customers and you're done! Or if your average customer pays you ten thousand dollars, then you need to find ten thousand customers and you're done! Or on the far end—so those are your elephants and your deer. On your far end, he has these flies, and they only pay you ten dollars, but you need 10 million of them.

So it helps to think about, as you're starting to think about your sales motion, well, how much are my customers paying, and therefore how many of them am I going to need to have? And what sort of sales motion is going to be sustainable for my business? Because if you're—the way you're selling your product today is you're flying to people, you're meeting them at conferences, you're doing everything I touched on, you know, I described this very kind of high touch, high energy sales process. But your customers are only paying you $10 a year or $100 a year or $1,000 a year, and you're going to have to repeat that 10 million times—it's impossible!

It's impossible, and it's, you know, way too expensive for you to build your business that way. On the other hand, if you're successful in building a low touch sales model where you're able to do things, you know, scalably, maybe you're selling to small businesses, you know, of which there's millions, maybe you have some way that people are doing self-service and sign up, well then you can be over on the right side of this graph, and you can have—and you can have a lower price product.

But the price of your product and your sales motion are inextricably connected, and that's something that, you know, took me a little while to understand. But I thought this graph really helped make clear is depending on how much you're able to charge for your product and depending on how much people are willing to pay for your product, that'll change how you approach sales as you're building your company and building your sales team.

So those are some lessons I've learned along the way doing sales. I want to end and just say good luck out there; you know, you guys are figuring this out! It's the most fun time of your company. You get to have these really energizing conversations with tons of users and figure out if they’re potential buyers. Good luck because you'll always look back on this as one of the most fun parts of your journey. So thanks for having me, and I think we have some time for Q&A.

Yeah, why don't we start here. Thank you very much for the talk! Quick question: You mentioned about follow-ups and so forth. What would be the appropriate time between emails and, you know, just so you don't feel this—you don’t seem overbearing?

I'd say, on average, maybe a little under a week. So if you email someone and they don't get back to you, I think it's, you know, polite and not overeager to nudge, you know, five, six, seven days later.

Yeah, oh, here. Hi, my name is Raisin, I was happiest on sales day! At what point throughout your process did you feel like you were pestering the customers? You put it in a nice way, you know, like, "Oh, you got to keep on going, you got to keep on asking, you got to keep on sending them along the process." Did you ever feel like you were pestering your customers or not?

Yeah, so the question was do you ever feel like you're pestering your customers when you send them follow-up emails? I like to think that if they haven't told you "no," then you're within your rights to follow up, you know, a reasonable number of times. If you're talking about emailing someone eight times, and they haven't gotten back to you, I mean, take a hint. Great! But, you know, I think if they haven't told you "no," and especially if you had an earlier conversation where they were interested, you know, assume the best. Assume they're busy. Assume that they've got other things going on. You might not be their top priority, but there's nothing wrong, especially if you're doing it on a weekly cadence or something like that.

And your emails are thoughtful and personalized. I have never once in my life been annoyed by somebody sending respectful follow-ups as long as they seem thoughtful and personalized. Don't forget that part! If it's just like I'm getting mail merged every week with another template, I mean, you know, nobody likes that person!

But yeah, over here?

Yeah, I would say you don't learn about product market fits from—oh, sorry! The question was when you're getting these "no's" or in early sales conversations, how do you know when they're just not an early adopter? And how do you know when you should be reading signs of product market fit or lack thereof?

And my answer to that is I don't think you discover a product market fit from the "no's." I think you only discover it from the "yes's." So I think when you get "no's," there's a lot of reasons people could give you "no's," and I wouldn't even necessarily believe, you know, the reasons that people give "no's" because in the same way that you can't trust when VCs give you "no," you know, the reasons, there's just—as people struggle to be upfront and honest and, you know, everybody wants to be polite.

Well, you get to product market fit and, you know, you have something as when you start hearing "yes's." And so you just have to try, and if you can't get any "yes's," well, there's your signal that you don't have a product market fit. And if you can get "yes's," there's your signal that you do have product market fit, and I think that's all that matters.

What is the importance of reference customers in terms of would you prefer going out to big brands, big names, even if they require far more work than going to small?

No, but yeah, that's a great question. How should you prioritize big companies, which would be amazing names and logos if you had them as reference customers, or small companies, which might be faster? You know, I think about the advice YC gives for investors, which is to do a breadth-first search, meaning optimize for speed and optimize for, you know—I would say talk to all those companies! Talk to the big company; talk to the small company.

But then you’ll know which ones can can move quickly and not, and optimize for speed. A customer is better than no customer, and the big companies are never—are never these great—they're great references, but you might not necessarily— I'd go for who needs your product the most and who will move quickly, and the reference stuff and, you know, the logo stuff— you know, I don't think you have to worry about that in the early days. You're just looking for validation and customers.

Yeah, over here?

Hi, I'd like to hear about your pricing journey. We have asked interested customers that we’re beginning to now get nervous about the pricing, so want to know about your journey.

PS I did have sales at the UCLA baby bro.

Oh, nice! Oh, good to meet you! So your question was about the pricing journey? Yeah, and how to set pricing—that is a hard question because it's so specific to every company. I'll tell you what we did at Clever: we guessed! You know, we guessed, and you get feedback.

It's actually kind of neat; you get feedback from the market, you know, pretty quickly, and you can—in the early days, you can iterate. You know, there's a—there's a Patrick McKenzie likes to talk about how most startup founders need to charge more, and we'll usually guess too low.

So maybe one strategy for guessing would be to guess a number that seems reasonable to you, and if you can close that sale, you know, try doubling it the next time. And if you can close that sale, try doubling it again. You—it's really hard to know what customers will pay, but I'll tell you that that, you know, that original deal I mentioned for $100,000 that we closed very early on: why was it $100,000 and not, you know, half of that or double that?

It was just, you know, us doing a little bit of this and guessing, but we got feedback and iterated from there on the pricing model. So I think you just gotta try things, be bold. Whatever you say, you got to believe it, this is the right price for our product. There’s no other price would that would be fair for this, you know, this thing.

But then quickly, you know, be willing to iterate as you get that feedback.

Yeah, no problem! In the back there?

Yeah, I'm not sure I understand the question.

Yeah, so the question is how do you—if you're talking about a $50 price point for a product, how do you—and you know, early on in a company's journey, how do you bootstrap a sales effort around that?

I mean, if you're talking about a $50 product, even $50 per month, you are basically—basically, you probably shouldn't do any of these things, and you should instead invest in a marketing function because you are gonna need so many customers, and, you know, you can't do it in a high-touch way.

So, you know, I look at things like, you know, demand generation and email campaigns and self-service signup flows and referral codes and things that, you know, companies that that small price point kind of have to do to be scalable, or raise the price of your product to support, you know, a true sales.

Either way, but that's probably how I'd approach it.

[Music]

Why isn't there anything on your website?

Yeah, there's no product other than the product—that's something I don't talk—okay, it sounds like sometimes founders do this. I said, "What if there's not enough case studies on our website for people to come by?" I thought of founders think they're the net; it's never enough! Whatever they have is never enough to get people to buy; if they were one more reference account, if they had a few more case studies, that's what people, you know, that's what it would take for people to buy.

Guess what? If you go on the Wayback Machine for clever.com from 2012, we didn't have any case studies, you know? We didn't have any customer testimonials. All we had was a page that described the product, and, you know, and that was enough to get, you know, for people who had the need, they didn't care about any of that. They were like, "Oh, finally, someone's built a solution to my problem. Great! I will run through walls to get it."

And we didn't, you know, maybe we have some of that stuff five, six years in, but we certainly didn't have it at the beginning.

So, uh, yeah, over here? Sorry, one more time?

Oh, what resources? Yes, the question is what resources have I learned from, you know, in doing sales?

There is—well, first there's no excuse, there's no substitute for doing it. I've read a number of books on sales; I've, you know, watched things online. Ninety-five percent of what I've learned has just come from trying it over and over again. And actually, it really appeals to the math and statistics side of me because you kind of get to A/B test everything.

Yeah, you try something new in a conversation and, "Oh, that didn't really work. Okay, gonna, you know, try something again." You just get to iterate over and over and over again, and so that is the number one way to learn sales.

There are some books—there's this one that I love; it's called "How I Picked Myself Up from Failure to Success in Selling." It's from like the 1950s, and it's written in this kind of hokey, corny way, but it so beautifully encapsulates the journey of learning sales and, you know, some of the hustle and things that I was describing as part of it earlier.

So that's one resource I've recommended to founders, but really you just got to try it!

Okay, last question!

Yes, you look—I give a question about hiring salespeople. First of all, you have no business hiring salespeople until you've done a lot of sales on your own! And the reason is not just, you know, because of what I was saying earlier about how good you are; it's because you won't even know what kind of people to hire until you've done a lot of sales on your own.

You won't know what the core skills are: is it traveling a lot? Is it a lot of phone calls? Is it a lot of, like, you know, really good emails? You just won't know. Once you have done sales for a while, the good news is you'll know exactly the kind of people that you should hire.

And typically, that's how I've done it. So I've done sales, you know, by myself for three, six, nine, twelve months, made it repeatable to a degree, and then there's, you know, there's literature out there about what you want your first sales reps to look like.

And oftentimes, the term that's used is "Renaissance sales rep." I, and that's kind of differentiating from the "coin-operated sales rep." Maybe, you know, coin-operated meaning, like, they need everything; they need every piece of collateral, every playbook, every script, and then they can go out and execute on it just relentlessly.

On the other side of that spectrum, you have the Renaissance reps, what you need to start up. And these are folks who don't need a lot of direction, don't need a lot of playbook, and they're just figuring things out. And probably your earliest reps, you know, even Clever today, I, you know, we're Renaissance.

But you know, bigger companies will have much more on the other end of the spectrum, and so you want to look for those Renaissance players who can—who really love to learn. Oftentimes they'll have some industry expertise, but maybe not too much. You know, you probably don't need the person as your first salesperson who has, you know, just—you probably don't want someone, you know, don't be too blown away by fifty years of experience.

Not that that's bad, but it's also, you can probably get away, you know, if you have the hustle and the grit, that's what's most important at this age more than experience.

And so yeah, those are the things I look for: a lot of energy, a lot of passion, kind of that Renaissance sales rep mentality, and then pattern matching to what I've been doing in the sales process. If they have those skills, great!

Thank you!

Thanks, guys!