Fix Your Map, Not The Terrain

I recently had the pleasure of joining Nat Eliason on his podcast ‘Nat Chat’ to discuss Antifragile by Nassim Taleb, which if you don’t know, is one of my all-time favorite books. During the podcast, Nat gave an example of a “naive intervention” that’s been percolating in my mind ever since: In response to children being distracted in class, doctors have, for years, been liberally prescribing Ritalin to “help” students focus. Instead of examining and redesigning the distractions and flawed class structure that leads to almost 20% of American boys being diagnosed with ADHD, the education and medical industries have decided to drug students into submission. And this naive intervention leads to long-term issues, as there seems to be a link between taking Ritalin and cocaine addiction later in life, due to the similarity between the two drugs. Nat referred to this overprescription trend as “trying to fix the terrain, instead of fixing your map”, the terrain in this case being children and their attention span while the map is the solution to capturing their attention.

To put it more broadly, your map is your model of the world while the terrain is the actual world. Models are always, always, always (I can’t stress this enough) an approximation of reality. When models are effective, there is very little difference between the model and reality. When models fail, there’s a large difference. And because the world is constantly changing, models require continual feedback loops and updates to remain effective. Changing the model is much more in your control than changing reality, yet many notable screw-ups (like the ADHD example above) happen when humans try to re-shape reality instead of re-shape their model.  

This terrain/map concept is so powerful and broadly applicable. Through the work I do, I see a ton of parallels with both corporate innovators and startups trying to force the landscape to adapt to their expectations instead of adjusting their solutions to the new reality.

Retail: Legacy Brands vs Adaptive Brands

In retail, the vast majority of legacy brands still base their strategy on a terrain that existed pre-Internet and pre-social media: namely, the supply-driven retail business model. Spotting these companies is fairly simple: they are the ones who are late to the game on almost every trend. Why? Because trends now emerge organically through “the public” (sometimes influencers but often just the dregs of the interwebz) instead of through corporate tastemakers.

The old model for retail was for a buyer or tastemaker to decide which products would be released in a given season. These buyers were/are extremely skilled at understanding consumer preferences and the model worked well for a long time. But now that we’re able to access products from around the world, taste has simply become too complex for any single human being (or in my opinion, an algorithm alone) to control or predict. Instead of a top down model of tastemaking, trends now generally emerge from the vast pool of humanity, without an easily determined reason – though people will try (and fail) to analyze trends in hindsight.

Brands that have embraced this new model (like Zara) are able to identify emerging trends through rapid piloting, kick the design and supply chain processes into action for successful experiments, and get products in-store before the trend has really taken off. Equally important, they can economically halt the process and respond to the next trend when the current one is over. Brands that have built processes like this to adapt to the new retail environment are exemplifying the idea of “fixing their map” to adapt to the new terrain.

Startup Sales Process

Likewise, over the years, I’ve seen plenty of startups miscalculate just how long and involved the enterprise sales process is, how many stakeholders there are, and the risks involved when a large company works with a small one. The startups who successfully navigate this process are the ones who, often through trial and error, develop an accurate model for the organization they’re selling to. This includes knowing who the key decision-makers are, what they are being judged on, what their top priorities are, and most importantly, how your startup fits into the picture.

The startups who get frustrated in this process are usually those who come into it with unrealistic expectations of how quickly a deal will get done, simply because of how much sense it makes…on paper. While mapping a deal on paper is important, it isn’t nearly enough to move things along.

To successfully close a deal with a large company, it takes an understanding of who in the company is actually buying your product, what that person or department is tasked with, what they’re succeeding and failing at, and so much more. All of this deep, detailed knowledge can only be gathered through research and many interactions with the target company. And this knowledge is then used to build and iterate on your map (i.e. model) for how to get the deal done.

But if a startup runs into a wall during the sales process and attempts to change the procurement process (i.e. change the terrain) – good luck. Those processes were likely created by a painstaking process involving dozens of people and months of debate. Most importantly, you – a little startup – don’t have the leverage to demand that the large company change their process. If the startup has a ton of leverage, it’s possible (though unlikely) that the large company may volunteer to fast-track the deal. But I have never seen a startup successfully demand that the large company change their process.

Conclusion

When things aren’t going right or are more difficult than expected, it’s easy to look externally and blame outside forces. But more often than not, it’s our model that’s flawed, driven by expectations which don’t match the reality of the terrain. Taking a step back and evaluating our map is often all we need to do to correct things. An even better tactic is to build in opportunities to check and adjust your map as you go along, for example interacting with customers often to continuously test your assumptions. These feedback loops are the only way to make sure the map you’re using is an accurate representation of the terrain and not a forced fit “solution” that has little connection to reality.

The Powerful Sales Hack I Learned By Watching 8 Mile

Confession: 8 Mile is one of my favorite movies. That’s not only because I’m a huge hip-hop fan. The gritty Detroit scenes, the classic hero’s journey, the great acting, and yes, the rap battles all play their part in making 8 Mile one of the movies I turn to when it feels like life is beating me down.

In addition to being such an inspiring and entertaining film, the final scene features a major lesson to be learned for anyone trying to sell. For those who haven’t seen the movie (or if you just want to see some great rap battles), start by watching the video below:

Prior to the above final scene, Jimmy Smith Jr. (played by Eminem) constantly has his physical and personal characteristics thrown in his face as insults, the most immutable being the fact that he’s white in a neighborhood that’s mostly black. On top of that, he and his friends aren’t known for being gang members or drug dealers and are simply people who have regular, low wage jobs at an automotive plant. For the majority of the movie, Smith feels defeated by the constant attacks on something he can’t change. The turning point comes when he realizes that his perceived weaknesses can be turned into his strengths, especially if framed the right way. Nowhere is this seen more strongly than in the final battle:

This guy ain’t no motherf***ing MC,
I know everything he’s got to say against me,
I am white, I am a f***ing bum,
I do live in a trailer with my mom,
My boy Future is an Uncle Tom.
I do got a dumb friend named Cheddar Bob
Who shoots himself in his leg with his own gun,
I did get jumped by all 6 of you chumps

One of the things that shows skill when freestyling is being able to come up with creative insults. When someone calls out everything you’re about to say, how in the world can you respond? Their self-deprecation takes all the responses right out of your mouth and leaves you gasping for air.

Sales Pitch Objections

The preempting insult strategy from 8 Mile always reminds me of something I love to hear in sales pitches. Startup founders and salespeople have heard every objection in the book. Things like:

  • Your company is too small
  • You’re too young
  • The product isn’t “polished”
  • You don’t have enough customers

Most salespeople will do their best to brush over the perceived weaknesses of their product. They certainly won’t be bringing up their product’s weaknesses as part of their pitch.

However, none of the above common objections is insurmountable and can actually be turned into advantages. For example, a way to pre-empt the “you don’t have enough customers” objection is to say that you’re currently working with a select group of invite-only early adopter clients. And we all know everyone wants to be part of an invite-only club. The “your company is too small” objection can be reframed by saying you have a small, agile team that can respond to customer requests more quickly than any large company ever could. You get the picture.

I’ve even seen some companies include some of these common objections in their pitch decks or as part of an FAQ section of their website. This is the ultimate show of confidence and highly recommended if you know your responses are going to be powerful.

*****

Ultimately, whether you make a sale or not is highly dependent on how you respond to objections and questions. Every product and company has strengths and weaknesses. Those that try to gloss over the weaknesses and only highlight their strengths run the risk of being perceived as shady or dishonest. But a company that shows you what it’s weaknesses are AND is able to re-frame those weaknesses as strengths? That’s who you want to work with.

Four Common Mistakes Startups Make When Selling to Large Companies

For the typical early stage startup, closing a deal with a Fortune 500 company can provide a huge boost in morale and momentum (and hopefully cash). Enterprise deals are a signal for investors to indicate traction, a common source of free media attention, and a key factor when potential employees will weigh your offer against other opportunities.

Over the past several years, I’ve sat on the corporate side in my role building the External Innovation group at The Estee Lauder Companies, where I’ve worked on 200+ deals with startups of all sizes. Before that, I sat on the startup side of the table and led growth at several venture-backed companies; closing enterprise deals with companies like Proctor & Gamble, LinkedIn, Spotify, and Honda.

With this dual background, I’ve seen (and made) my fair share of mistakes in building startup-corporate interactions. Avoiding the mistakes below just might be the difference between celebrating a deal with a new enterprise customer and sitting on the sidelines wondering what happened. To paraphrase the classic sales quote from Glengarry Glen Ross: champagne is for closers.

Mistake #1: Assuming Large Companies Have Limitless Cash

Yes, you may be pitching to a billion-dollar company but the person you’re pitching to doesn’t have a billion-dollar budget. While corporate budgets may (keyword: may) have more wiggle room than startup budgets, your corporate counterparts are still dealing with many demands on a limited budget. On top of day-to-day budget concerns, large companies, even successful ones, may implement spending freezes for specific departments. It’s entirely possible that your potential customer will be comparing your product with something in a completely different industry, simply because you’re competing for the same budget dollars.
Have some empathy for the budget concerns of your corporate counterparts and it’ll pay off by differentiating you from other salespeople they encounter.

Mistake #2: Trivializing Deep Corporate Knowledge

While it is possible that your startup is “changing the world”, the Fortune 500 companies you’re pitching to have already changed the world and know a thing or two about how things work. There’s nothing more annoying to your corporate counterpart than trivializing the deep knowledge they have of their industry.
You can also run the risk of shooting yourself in the foot by extrapolating current trends in your presentation. Do you really think you’re the first person to tell a corporate innovation director with twenty years of experience that artificial intelligence is going to take over every industry by 2030? Whether you’re right or not, the point is they’ve heard that story before and may view it as a sign of arrogance. Showing some humility and using phrases like ‘our hypothesis’ go a long way towards establishing your honesty and credibility.

Mistake #3: Using Too Much Startup Jargon

True story: the first time I mentioned the word “accelerator” in a corporate R&D lab I was consulting for, a senior scientist gave me a confused look and said he “didn’t realize particle accelerators were funding startups now”. While this may initially make you facepalm, it was a great reminder that those of us in “startup world” truly live in a bubble that most of America, and the world, are not part of. Taking the startup jargon down a notch will help you get your point across.

It sounds cliché but knowing your audience is the key to effective communication. When pitching to individuals who’ve spent their entire careers in large companies, avoid using startup words that they won’t understand and connect with. It’s not the job of the audience to figure out the presenter – but it is the job of the salesperson to make sure their pitch isn’t going over the audience’s head.

Mistake #4: Ignoring Implementation Costs

In the omnichannel world we live in, any large company with a physical retail presence is constantly pitched new in-store technology concepts. While the startups offering these technologies are charging reasonable prices (often as low as $30/location/month), what is often ignored is the cost a company must incur to implement a new technology. For example, a technology that provides customer intelligence via iPad to in-store sales staff so they can sell better requires an extensive training program, troubleshooting, and potentially even in-store hardware upgrades. So even though a technology like this may only cost a total of $6,000 per month (200 locations x $30/location/month), the implementation costs (for things like hardware and training) across 200 locations could easily exceed $100,000.

Implementation costs are difficult to avoid entirely but there are steps startups can take to help their clients reduce costs and get themselves closer to signing a deal. These steps include negotiating reduced hardware pricing with manufacturers, assisting with or even providing free training, and offering to troubleshoot software issues for sales staff. Whatever you do, the important thing is to make it feasible and simple for the large company to say yes to working with you – and that doesn’t always involve the price of your actual product.

*****

Once you’re able to snag a meeting with a decision-maker at a large company, it means you’ve got their attention. They are interested (albeit at a very high level) in what your product can do. That said, these decision-makers are looking at dozens of other companies who are competing for the same budget. The easiest thing for a decision-maker to do is say no and any of the mistakes above give them an easy out. By always keeping your audience in mind, being empathetic to their concerns, and avoiding critical mistakes, your probability of closing a deal goes way up. And that’s ultimately the outcome that both large companies and startup salespeople are after.

This post originally appeared on the Global Accelerator Network blog. Thanks to Joe Benun for feedback on an earlier version of this post.

Sales Prep: How Do You Get In The Mindset To Sell?

On the surface of it, selling something is pretty weird. You’re basically using words, Jedi mind tricks, and (occasionally twisted) logic to convince someone that they should do something, which usually consists of them giving you money.

Oh and if you’re about to skip this post because you’re not a “salesperson”, let me ask you something: have you ever had a job interview? Have you ever pitched an idea? Have you ever asked your teacher for a deadline extension? Yea…you’re a salesperson. Don’t be ashamed, we’re all salespeople. Own it.

So if we absolutely have to do the uncomfortable act of selling something, we might as well do a good job right? The art of selling is first and foremost about confidence. If you don’t believe in what you’re selling, you can be damn sure no one else will either. Salespeople require a similar level of unshakeable confidence as athletes do and just like athletes, salespeople tend to have a “sales prep routine” to get into the right sales mindset. Here’s one that works for me:

Step 1: Watch these 2 videos (language NSFW) featuring Vin Diesel and Ben Affleck from the movie Boiler Room. Awesome demonstrations of sales techniques in here too:

Best quote from these videos: “There is no such thing as a no sales call. A sale is made on every call you make. Either you sell the client some stock or he sells you on a reason he can’t. Either way a sale is made”. Word.

Step 2: Review your plan – why should this person give you what you want?

I’m not a big believer in sales scripts. In my opinion, scripts are a great way to make yourself seem robotic and unlikeable (unless you know the script really, really well – so well that it’s second nature and you don’t have to think about it). That said, it’s still important to have a gameplan in place – where do you want the conversation to go, how you want it to flow, and what you want them to do. Most importantly, you have to be able to answer the question: why should the other person do what you want them to do?

Step 3: Review objections – why would someone say no to what you’re selling?

Inevitably when selling, someone is going to say no to you. The key is how you handle their objections. Obviously you need to know what the objection is in order to respond to it and improve in the future, so make sure you make the effort to find out. It amazes me how many people take “no” at face value in the sales process and completely miss the opportunity to iterate on their product/pitch. By understanding objections, at the very least you know what you can improve for next time. And yes, you should be writing these objections down.

Step 4: Watch Alec Baldwin motivate you to sell in Glengarry Glen Ross (language NSFW)

Remember: Always be closing!

On a more serious note though, the AIDA (Attention, Interest, Decision, Action) framework that Baldwin talks about is really, really effective. Learn it and use it.

Step 5: Go make the sale

You got this. Have fun with it – what’s the worst that’s gonna happen? They say no? Their loss.

Step 6: Drink some coffee (because coffee’s for closers only)

If you want to go deeper into learning sales skills, I highly, highly recommend buying Jeffrey Gitomer’s Sales Bible book and getting tons of real life practice. There aren’t any shortcuts to getting good at this stuff. It just takes confidence and hard work.

Don’t Get It Twisted: Customer Development = Startup Sales

There seems to be a misconception out there in startup world. There is plenty of talk about “customer development” and Lean Startup Methodology (talking to and learning from potential customers) in the product development stage, which is great. But there is simultaneously a sense of apprehension when it comes to “monetizing”, as if it’s this mythical, frightening beast. I’ll let you in on a secret: customer development and early stage startup sales are literally the same process.

This comes back to a fundamental misunderstanding of what selling is. Way more than any slick sales pitch, it’s about matching your offering with a customer’s need. To create this match between product and need, you need to listen but you also need to expose yourself to failure by trying to sell and seeing what happens. The biggest mistake you can make is giving the impression that your product is free when it actually isn’t.

And once you do bring up price, always be ready to close the deal! Most people separate customer development from sales so that they are either only:

1) Learning during customer development conversations

2) Trying to sell while in sales calls with potential customers and not trying to learn anything

Yesware’s founder Matthew Bellows offers a warning of this exact symptom in one of his early blog posts where a potential customer was ready to buy licenses for their sales team but he was too busy thinking of potential features to notice the buyer’s intentions. Yesware has raised double digit millions and is absolutely crushing it (I love using horrible cliches) so if they can make a mistake like this, it’s very possible that you can too.

But what happens if you misread the potential customer’s intentions, try to sell them, and they reject you? You’ll hit an objection. Objections are great because you learn why the customer is saying no! If it’s something wrong with your product, you can now go fix that problem. If it’s related to your pricing, you can work on that. The real problems come when you aren’t getting any feedback on why the customer isn’t buying – it’s impossible to fix the problem when you don’t know what the problem is in the first place.

There’s another hidden advantage to having paying customers – it’s way easier to get useful feedback. At one of my previous companies, we went down the free trial route and got solid adoption from one of the core audience groups (high school counselors). The problem? They never used the product unless we told them to. We weren’t sure if it was because of our design, our product, or if we just weren’t solving a true need. You’ll never have this problem if you’re asking initial users to pay money to use your product – they’ll either not buy your product or they’ll quickly cancel if you aren’t solving their need.

Don’t overcomplicate things. If you’re doing customer development already, just add a step and try to close the sale. Worst case, you’ll learn more and if all goes well, you’ll have some revenue. And if you’re not already doing customer development and you run a startup, the time to start was yesterday 🙂