Essays On Business

How not to get market traction in your startup?

Airplane taking off

Almost everyone has it wrong about how to get market traction in a startup. It doesn’t matter if you are bootstrapping your company or have raised 35 million dollars. A lot of companies hire a sales team right away. They are looking to scale their business and jump on the sales wagon. WRONG. Don’t hire a sales team, don’t hire a VP of sales, the only people who should be making sales are the founders. I’ll explain why in the next few paragraphs.

We did this the wrong way with our company. After building an initial product spec and raising some capital we went and hired a sales team. All our money was being burned in the sales department. Getting traction was the highest priority. We just didn’t know we were doing it all wrong. When we couldn’t make sales fast enough with one strategy we came up with another and sent our sales team right back out.

Here’s why this is a really bad strategy for a startup. Firstly, you might think you have a great idea, but does everyone else (other than family and friends) think so too? Most entrepreneurs have two things in common, a high aptitude for risk and a big ego. If a product isn’t selling fast enough we think it’s because the sales guys aren’t doing it well enough or they need a different strategy. It’s not the product. And we keep spending money pushing the sales team out there. But, when a founder can’t sell a product themselves that triggers a different response.

A founder starts asking the question, “What is it that is preventing people from making the decision to buy this product?” It might be for a lot of reasons, but one of the obvious ones is the product market fit is not right. This means you’ve built a cool product but the market might not think it is valuable enough to spend money on. A few customers might use it here and there. But don’t make the mistake of going after a product where too few people see it as a must have.

By interacting directly with the customer a founder can pivot the product or the market to find that perfect product niche. Once you’ve discovered a “must fix” or “must have” demand for your product then you need to deliver that product.

Finally, once you have proven that you can scale your sales strategy (this means that for every 1 dollar you spend you get 2 or more back) then you can start hiring your amazing sales team and eventually a VP of sales.

By Jonathan Whiting

I enjoy sharing what I am learning and hopefully it's of interest and help to you. I live in Canada with my wife. Follow me on Twitter.

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