Be Your Own Connector
I frequently network with colleagues and friends who are interested in finding "rainmakers". My colleague, David Ryan of Grey Matters Group speaks very eloquently about the role of rainmakers in professional services. I think his point is very simple - rainmakers are scarce and expensive.
Most rainmakers are "connectors", based on Malcolm Gladwell's definition in his book, "The Tipping Point". These people are seemingly connected to everyone important to your business. They can generate all sorts of sales opportunities and have the personal relationships to enable the right pipeline. Most start-ups believe they need a "connector". At best, there may be 500 to 1,000 of these people in the US. They are far more rare than you think. Why?
Trick Question: How many CEO's are there of Fortune 500 companies?
Many start-up executives believe their personal connections are going to carry the day to generate enough significant revenue to intially grow their business. Let's examine your connections more closely.
Let's say you are running Start-Up, Inc. and you have 20 good, solid contacts. You think, "I create my business with my 20 contacts and then my momentum will bring in other deals." In other words, build it and they will come. Okay – let's concede that you actually get business from some of your contacts – a good closing ratio would be 20% - 4 contacts. Now let's say your product sells for $15,000. How long is $60K going to sustain your business burning cash at, say, $30K a month....
Okay, if you sell a 1,000,000 widgets at $5 a widget every month to your customer, then you can say I'm wrong.
I don't mean to offend anyone, but if people were so well connected, why do we have a multi-billion dollar industry of books and self-help consultants teaching people about "connecting"? (Also called networking, social networking and a bunch of other terms, but you get the idea.)
This is going to sound like Sales 101, but there is some simple blocking and tackling that every Sales executive needs to do when considering revenue: You have to plan for sales, and in my experience, many people simply skipp directly to "firing" instead of "aiming".
Here's four tips on where to start:
Tip #1: Who is going to buy your product?
Yes, this seems really obvious, but I have met many founders that have never identified their target customer. They assume that the customer is someone "just like them"; that is, a business that used to be their client as a consultant or the company they worked for – not enough. Can you produce a list of 500 companies that would buy and use your product? If you can't you may not be thinking big enough to generate "huge revenue".
Tip #2: Create a sales budget and put a real sales process in place.
How are you going to contact your 500 top prospects? Once you contact them, what is the sales cycle like? How long does the sales cycle take? What are the steps? How do you know the customer is "qualified" to buy your product? When and how do you expect to close the deal? Do you have enough deals to be profitable?
If you don't know anything about sales process, read one of the many best-selling books on sales process, such as Spin Selling, Strategic Selling, Solution Selling or CustomerCentric Selling. Or better yet, bring in someone who knows how to set up this kind of sales infrastructure....
Tip #3: If you are not a sales person by background, hire a Sales Person.
Not a necessarily a "rainmaker"- A professional sales person who knows about sales process and is willing to go out and aggressively help you generate revenue is worth every penny! Pay them a salary plus commission – don't make them "earn" their income by paying with equity or 100% commissions. Pay them a market based salary. This is not about what a sales person's rolodex look like: it's about their track record in selling and their ability to execute.
Tip #4: Focus at least 80% of your attention on revenue generation...
That means instead of spending all your time planning for the next set of product features and benefits,
Pick up the phone and call the CEO of your potential customers! You would be surprised to find out how many of them would at least take a call to discuss what you are doing.
Of course, I know this is an over-simplification of what needs to be done to enable a strong start-up business. I am not minimizing the fact that you have to have a good product or service in the first place, that you need to be clever in organizing and planning your business, and that you probably need to have or (more likely) raise capital funding.
But all the organization and product benefits in the world do not replace a sales plan.
Focus on revenue not on rainmakers!
If you would like more ammunition around creating an effective sales strategy, check out my section in Resources and Tools called Sales-in-a-Box. It's a complete plan with resources that will cost you less than $100 but will provide you with all the tools you need to get started. Feel freel to reach out and Contact Me if you have further interest in talking about sales strategy.