00:00all right good morning everyone we are
00:04halfway through startup school can you
00:06believe it already Wow yeah or more
00:12correctly we will be after this week and
00:14this is going to be a great week of
00:17talks lectures conversations today we
00:22have Tyler from clever who's going to
00:24give a talk on how to sell to begin with
00:28and after words harsh and Amin from
00:32triple bite are going to talk about how
00:34to build an engineering organization to
00:36pretty important things if you want to
00:38build a successful company I will start
00:40off quickly with my usual administrivia
00:43we will shortly be sending out a mid
00:46point feedback form for you guys to fill
00:51out we really will appreciate getting as
00:54many responses as possible this is our
00:56form of talking to our customers you all
00:58and getting feedback we're always trying
01:01to improve startup school we hope to do
01:03it every year and make it better every
01:05so please tell us what you think and
01:07what you think we should change adora
01:11and i we're talking a little bit about
01:13updates and I've talked to a bunch of
01:16people alive and some on the forum about
01:19about updates and and what makes sense
01:22for updates and just to put it bluntly
01:25think hard about your metrics the ones
01:28you're using do not use metrics
01:30what is a metric it's a metric
01:33that doesn't really measure the road to
01:36success for you it's something you're
01:38making up any startup that you're
01:40building is an enormous complicated
01:42difficult crazy task and no matter what
01:46you're doing if there is no mile stone
01:48on the way to that to achieving that
01:51enormous task then you're kidding
01:53yourself and you're not really a step on
01:55the way to success those milestones are
01:57more than anything for you for you to
02:00measure that you're making progress
02:01towards your goal so don't make stuff up
02:04because you think that's what we want to
02:05hear or just because you're bored
02:08it won't help you okay
02:13as always problems etc email to start-up
02:18school at Y Combinator calm and with
02:24that I think Tyler we are ready to go so
02:28my good friend Tyler basmati from clever
02:36hey everyone it's an honor to be here I
02:39was speaking with you today thanks for
02:41my name is Tyler basmati I'm the CEO of
02:44a company called clever and I wanted to
02:47talk to you about something that I think
02:49is one of the most fundamental and
02:51important things any founder needs to
02:54master which is sales and before I get
02:59started and share some of the things
03:01I've learned and picked up over the way
03:02I thought it might be helpful to share
03:04my own personal journey to sales as
03:07something that I've come to learn and
03:09just you know really appreciate and
03:11respect as a craft when I was in school
03:15when I was in college I was a math major
03:17my you know my graduate degree was in
03:20statistics I was the last person I ever
03:23thought would ever do sales and so my
03:27own journey to getting here was I was
03:30working on the college newspaper I
03:32joined the college newspaper it seemed
03:33like a fun thing to do had some friends
03:35who are on it and one of the roles they
03:38had open was they needed somebody to run
03:40the advertising for the newspaper and so
03:44I was spending in college hours a day
03:47you know figuring out how to sell ads to
03:50local businesses so we'd have enough
03:52money to print and put out the paper
03:53every day and over the doing this for
03:59several years if you know anything about
04:01college newspapers you know one of the
04:03things the biggest determinant of how
04:05much money they make every year is how
04:06well the economy is doing it's a lot of
04:08the ads are for recruiters but B I just
04:12happened to be there during some very
04:14good years and when I was leaving the
04:16advertising sales team we had we set
04:19records for the Crimson and so we just
04:22you know we sold a lot of ads and so I
04:25thought okay this is interesting you
04:27it's an interesting craft and then as I
04:30was getting ready to graduate school you
04:32know getting ready to graduate go off to
04:34college or excuse me golf to work you
04:38know I'm doing math I'm thinking to go
04:39off to finance do a hedge fund something
04:41like that a buddy's starting a company
04:43and he says to me Tyler I need you to
04:45come join because you're the only person
04:47I know who knows how to do sales and let
04:52me tell you I was offended like this was
04:56not how I saw myself this was not you
04:59know what I imagine doing after school
05:01but I was also really intrigued and I
05:04was really good friends with this guy
05:06and I said oh you know why the heck not
05:07so ended up on going on a very different
05:10path and joining his startup building a
05:14sales team you know we were selling to
05:15newspapers across the country and if
05:18you've ever worked with or or thought
05:20about newspapers before you can imagine
05:22they are very hard customers to sell to
05:25and so I really cut my teeth and have a
05:27lot of fun frankly over many years
05:29figuring out how to sell into this
05:31market and we sold to a lot of
05:33newspapers then fast-forward a little
05:36bit and I come on to start clever and
05:39one of the co-founders started through Y
05:43Combinator about six years ago
05:44and if you don't know anything about
05:46clever you know we're a single sign-on
05:47platform used in schools and today over
05:51half the schools in America use clever
05:53and so we've really done a lot of
05:55selling and really had to figure this
05:57out once again in a different context
06:00and so I was thinking about you know
06:04what would be most helpful to talk about
06:05what I'd most want to hear in your shoes
06:07or what I most would have appreciated
06:09knowing when I was first starting to cut
06:11my teeth on sales and so that's what I
06:13want to share with you today it's just
06:15things I've picked up along the way
06:16some observations I've had and hopefully
06:18some practical tips that you can take
06:20home and implement you know as you get
06:23your startups off the ground running
06:24sales sales has a lot of mystique and a
06:32lot of lore around it or at least it did
06:34to me when I was thinking about sales
06:36early in my career you know when we
06:39think about sales and we think about
06:41people you know a lot of us picture Don
06:44Draper we picture these people who are
06:47so charming so impossibly funny who they
06:51always have the right line at the right
06:53moment you know to win the deal this you
06:56know they're of course incredible
06:57golfers this is how sales is portrayed
07:00in every movie in every TV show and so a
07:04lot of people go through life thinking
07:05that this is what sales is about and
07:08because we have we build up this
07:11mystique of what sales is and the types
07:14of people who can do sales
07:16I hear founders say very often things
07:19like well right now we're just building
07:21the product and once it's finished you
07:23know then we'll go and hire the
07:24salespeople well guess what hire the
07:30salespeople that's you
07:32and it's that looks nothing like the
07:35mystique and it looks nothing like the
07:36lore in my experience you know this is
07:39my co-founder Dan in the early days of
07:41clever and we were doing sales you know
07:43here he is on a broken chair in a three
07:46by three call room I think he's eating a
07:48bagel because he probably didn't have
07:49time for breakfast that's what sales
07:52looks like you know could not be further
07:55from the Don Draper imagery that a lot
07:57of people think of so sales is you and
08:01you know Y Combinator
08:02Paul Graham I remember when we were
08:03going through the program Paul Graham
08:05got up on this stage and he said you
08:08should be spending every moment of every
08:10day doing one of two things building
08:13your product are talking to users and
08:16talking to users a big part of that can
08:19be selling so this is a core
08:22responsibility of every startup founder
08:24is not just building the product but
08:27also talking to your users understanding
08:29their needs and as you'll learn that is
08:31really a big part of what selling is so
08:35this is a core responsibility for
08:36founders you know a lot of founders
08:38think well I haven't done sales before
08:39and that's true and they say well I'm
08:42not good at sales yet and that could be
08:44true too but one thing I've learned is
08:47that as founders you also have some very
08:50unique advantages that will that can
08:55the powerful at sales and very potent
08:57and the two advantages that I've noticed
08:59one is just your passion you are more
09:03passionate about the product that you're
09:05building and selling than anyone in the
09:07world because otherwise you probably
09:09wouldn't have irrationally quit your
09:11jobs and moved in with your parents or
09:13whatever you've done to start this
09:14company so one is your passion that is
09:17so powerful in sales and the second
09:19thing you have is industry expertise you
09:22know this problem better than anyone you
09:24know why it needs to exist you
09:27understand this problem more deeply
09:29hopefully than anyone and so these two
09:32things even if you've never done sales
09:33before I mean you can be incredibly
09:35effective and so don't think otherwise
09:40early on with clever one of the things
09:43we did that really worked for us was I
09:45had two co-founders so there were three
09:47of us and we just decided that one of us
09:50had to own sales it was so important
09:53that we needed one person to be thinking
09:55about this every day and so that ended
09:59up becoming me my other two co-founders
10:01were focused on building the product and
10:03implementing the product and I folk I we
10:06decided this was important enough that I
10:08decided I was gonna peel off and spend
10:10almost a hundred percent of my time
10:12selling this product starting from
10:14before it was even built so from that
10:17point you know from early enough on
10:18think about who and your company is
10:20really owning this and it should
10:22probably be a founder and it should
10:24probably be as much of a full-time job
10:26as you can spare so now I want to talk
10:29about how sales actually works and if
10:32you know anything about sales you know
10:34sales 101 as a lot of people talk about
10:35it like a funnel and there's different
10:37variations of this funnel I have a
10:39really simple one that I put up here
10:41step one of the funnel is finding
10:44prospects prospecting these are leads
10:46who might even be interested in buying
10:49your product who might even be
10:51interested in taking a call from there
10:54you have conversations okay so you
10:56figured out they're interested but you
10:58got to have a lot of conversations to
10:59figure out is this the right product for
11:01or not third is closing okay you
11:05actually they actually want to buy the
11:08do not snatch defeat from the jaws of
11:11victory and lose the deal oh yes to go
11:14through a closing process and if you
11:16complete all of those things then
11:17hopefully you are in the promised land
11:19and you have revenue when you have your
11:21first sales and so this is how I think
11:23about the funnel and what I'm gonna do
11:25now is just walk you through each of
11:27these stages and share how I've
11:29approached these in my career and some
11:31tips that have worked for me along the
11:32way so your mission in the first stage
11:37of prospecting it's to figure out who
11:40will even take your call and one of the
11:43things that for me was really helpful to
11:46understand is well you're gonna hear
11:49know a lot you're talking you you start
11:51talking about a new product people and
11:53you're just gonna hear a lot of nose but
11:55one of the things that was really
11:55helpful for me to understand is you have
11:58this technology adoption curve this was
12:00put out by a guy Everett Rogers in the
12:0160s and it starts on the left you have
12:04your innovators then you have your early
12:06adopters of new technology or early
12:08majority your late majority your
12:10laggards these are terms that people in
12:12Silicon Valley throw around that I'd
12:14been hearing for years but what I didn't
12:17know was that the inventor of this
12:18framework this technology adoption
12:20lifecycle Everett Rogers he describes it
12:24as a bell curve and he actually went
12:25through the effort of quantifying the
12:27area under the curve in each of these
12:29different segments and one of the things
12:32and so one of the things you notice is
12:34looking at this the innovators segment
12:37is just 2.5 percent of the population
12:42that means 2.5 percent of companies will
12:45will even consider buying a product from
12:49a startup that is unproven with no
12:51revenue and when you realize that - some
12:55founders that's kind of depressing like
12:57wow that's a very small percent of the
12:59market but when I found this out I
13:02actually found it massively motivating
13:04and massively invigorating because all
13:07of a sudden it makes what you have to do
13:09really clear you have to talk to you a
13:12lot of people because you have to find
13:16that 22.5% it's a numbers game means
13:20you're gonna have to reach out to
13:22200 companies to find just two and a
13:25half on average who are even in you know
13:28potential buyers for your product you're
13:32basically playing like a version of
13:35Where's Waldo you know where you're
13:37looking for the you know the very few
13:40companies who might be in this innovator
13:42segment and so expect early on sales is
13:48not reaching out to a you know two four
13:51ten companies reaching out to sale
13:53reaching out and doing sales is a lot of
13:57grinding and it's a lot of effort in
13:59order to get the result you want when it
14:04comes to actually starting these
14:05conversations I found there's three
14:07things that work for me so in terms of
14:10finding those innovators the first thing
14:12that work has worked well for me is
14:13using my network the second which is a
14:16little surprising to people is
14:18conferences and I'm going to talk about
14:19that and the third is cold emails these
14:24are the three ways in which I find
14:26prospects I'm not going to talk about my
14:28networks I think most people understand
14:30that but I can tell you many of the
14:32earliest deals I've done it every
14:35company I've been at have been through
14:36people I've known friends of friends so
14:39do not underestimate your network
14:41especially if you know the industry you
14:44might think it's not very big but you
14:45probably know a few people and those
14:47people might know a few people and so
14:49spend some time thinking about your
14:51network because you might find some
14:53really great sales opportunities that
14:54come through there and those are the
14:55best you don't need a hundred people in
14:57your network to get to sales you can
14:59usually do it with much fewer but let's
15:02talk about conferences because I think
15:03conferences are the most underrated
15:05aspect of sales and them and one of the
15:08least understood aspects of sales
15:11when I say conferences a lot of people
15:12think I'm talking about this like CES or
15:15e3 and going you know it's at some place
15:17where there's 80,000 people and it's
15:20basically more like a rock concert than
15:22you know then it's than anything else
15:24and when I say conferences I'm talking
15:29about something very different
15:30usually they look like this usually it's
15:33a bunch of you know executives or
15:36people in a hotel room cooped up for a
15:38couple days you know oftentimes you know
15:41in places like Milwaukee or Kansas and
15:45let me tell you this is such a powerful
15:49way these conferences are such a
15:51powerful way to meet your users you have
15:54to go where your users are and many
15:56times if you're selling to a business or
15:58to a corporate buyer this is where users
16:01are they go to conferences they're there
16:03with their peers they're learning and
16:04that's where you should be - now let me
16:08say a few words about how I've
16:10approached conferences in the past
16:11because this this really is where so
16:14many of clevers initial partnerships and
16:17customers came from one figure out what
16:22are the big industry conferences for
16:25your product in your startup usually
16:29there's not just one usually there's
16:30like 10 and you have to work to figure
16:34out what they are ask people in the
16:35industry where do you what conferences
16:36do you go to which ones do you you know
16:38are on your radar but there's usually
16:41quote there's usually quite a few in
16:43definitely more than one - pick a few
16:47that you're going to attend buy a ticket
16:48sometimes they're expensive you know
16:51thousands of dollars sometimes you don't
16:53even need a ticket you know depends on
16:54the event but figure out the conference
16:56and decide you're gonna go hopefully
16:59weeks or months in advance three get the
17:04conch get the list this is such an
17:07important part of making conferences
17:09like this worthwhile find a way to know
17:12who's gonna be there write to the
17:13organizers write to sponsors you know
17:16maybe it's on the website but figure out
17:18who's gonna be there in advance don't
17:20just show up at a conference and think
17:22you're gonna like network your way and
17:23meet everybody although if you can pull
17:26that off by all means do it it's just
17:28not something that that everyone can do
17:32but when you have the list of who's
17:34gonna be there then you can email people
17:36in advance and say hey you know I'm
17:39gonna be at this event I noticed you
17:40were - I'm working on this thing I'd
17:42love to show it to you can we find some
17:44time to chat and don't just do it with a
17:48few people do it with his men
17:50potential buyers or prospects as you can
17:52my goal when I go to a conference or
17:55when anyone from clever goes to a
17:56conference is that we have our entire
17:58days booked up in 30-minute increments
18:01because we've done so much effort in
18:04advance of the conference's trying to
18:07line everything up getting these
18:08meetings and they end up becoming the
18:11most productive day of the year when we
18:13actually go and we actually get to have
18:15all of these conversations and have all
18:17of these buyers and I get to the end of
18:19a night even the first night at a
18:21conference when yeah just been doing one
18:22day and let me tell you every time I am
18:26exhausted and I am also so energized
18:29because there's nothing that's more fun
18:31than meeting with customers and meeting
18:33with potential buyers and hearing their
18:34reactions to what you're building so I
18:37cannot emphasize enough how important
18:39conferences have been in every aspect of
18:42in every company I've worked in sales at
18:44and I highly recommend you explore this
18:47so that's conferences the other and
18:50frankly the you know more probably more
18:53common approach is called emails people
18:55don't really cold call too much anymore
18:57maybe you could make it work but cold
18:58emails I mean I still do that today and
19:02and a lot of people are don't know how
19:05to write cold emails they don't know how
19:07to you know reach out to someone in a
19:09productive way I know this because I'm
19:11on the receiving end of so many bad cold
19:13emails we probably all are they're
19:16really long they're not personalized or
19:19not actionable they're boring they're
19:21irrelevant so don't do that but if you
19:26don't do that like well then what do you
19:28do how do you have a cold email you know
19:30strategy that's effective in the early
19:33days of clever in the early days of
19:35other startups we would sit and sit down
19:38and we'd send you know 10 30 50 emails
19:42to cold prospects and it would look
19:44something like this and I've actually
19:46found an old email and I put it up here
19:48so you guys can see it you feel free to
19:49copy it but it is the simplest thing in
19:52you'll notice it's short it's to the
19:54point it's personalized it's actionable
19:57hey my name is Tyler and I'm the CEO of
20:00clever this is you know what we do I
20:02thought this might be rel
20:04for you because of XYZ reason that's you
20:06know personal to you
20:07even if you're not in the market I'd
20:09love to chat with you about this which
20:11is true do you have some time this week
20:13later this week I'm free I'm free now or
20:16you know I'm free at this time super
20:19simple super you know this will probably
20:21get read as opposed to some of the
20:23paragraph long you know diatribes about
20:26why my product is the best and why
20:28you're crazy for not using it and before
20:31all you're trying to do is get a call
20:33with somebody and actually meet them and
20:34so we'll send out cold emails it's it's
20:38very effective but you know make sure
20:40you do it right make sure you're writing
20:42emails that are interesting to people
20:43that aren't too salesy that are
20:45personalized and that are genuine and
20:47remember all you're trying to do is get
20:49a conversation get it out of that
20:50prospecting phase and into stage two
20:52which is conversations so let's talk
20:57about stage two stage two okay if you've
21:00gone to conferences you've done cold
21:02emails you've worked your network and
21:03now you're talking to prospects this is
21:07exciting people want to talk to you they
21:09might want to buy your product this is
21:12what you've been waiting for when this
21:15happens and you get them on the phone
21:17remember to shut up and listen and when
21:22people ask me you know what's your
21:24number one sales tip what's the number
21:25one when new sales people say what's the
21:27number one thing I should practice or
21:28work on if you take nothing else from
21:31this presentation take this sales is
21:35about listening I've had the opportunity
21:39in my life to shadow some of what I who
21:42I think are some of the best salespeople
21:45incredibly successful salespeople and
21:47they look nothing like the picture I
21:50showed you on the first slide you know
21:53they were soft-spoken they and what I
21:55remembered specifically was that they
21:57were world-class listeners and the
22:03reason that's so important is because
22:04that's what sales is at its core people
22:07think sales is about just you know you
22:10know like a being a battering ram and
22:12just hitting you're getting your points
22:13across and repeating them over and over
22:15until somebody finally you know breaks
22:17by your product and let me tell you that
22:20doesn't work and what does work is is
22:25building relationships with people
22:27understanding their problems
22:28understanding what their needs are and
22:30then seeing if you can help them with
22:32your solution and in order to make that
22:36you have to listen so most founders when
22:40I I've shadowed a lot of sales calls and
22:43I one thing I see very frequently is a
22:46founder they're so excited they finally
22:48got someone on the phone they're hooked
22:49they're definitely gonna be the first
22:51customer and they get them on the phone
22:53and they just talk and it's
22:56understandable right you're excited
22:58you're excited that you know about your
23:01product you're passionate about it you
23:02can't wait to show off every bell and
23:04whistle but you've spent months
23:05thoughtfully building but it will
23:07totally kill your sales your sales deal
23:10what you'll naturally do is talk for
23:14seventy percent of the time on the first
23:15call and you know maybe leave 30 percent
23:18of space for the other person the best
23:21sales people in the world when I've seen
23:23them in action it's the opposite they're
23:26listening 70 percent of the time and
23:28they're asking questions like hey tell
23:31me about the problem you're having how
23:34do you solve it today why did you even
23:36agree to take my call what would your
23:39ideal solution look like if you could
23:41have anything they're asking questions
23:44because they care and they want to
23:45understand and they want to figure out
23:47how to help this person solve their
23:49problem and yes their product might be
23:50part of that solution but it involves
23:53deep listening you know we have one one
23:57trick I can share on this is we at
23:59clever we use a tool called uber
24:01conference and every conference is great
24:03but one of the things I love about it is
24:05at the end of each call it sends you an
24:07email and it tells you how much time you
24:10spent talking versus how much time the
24:12other person spent talking and it's
24:16funny because I can look at these and
24:18it's a running joke I'll look at these
24:20in you know sometimes you'll talk to
24:22someone and say I just got off a call it
24:23was great I nailed it you know where
24:25they're gonna definitely buy and then
24:28I'll look at the Eber conference you
24:31at the end then if it looks like that
24:33I'll say I don't think that call went as
24:36well as you think I don't know if we're
24:38really you know ready to make that sale
24:40quite yet and so the number one thing
24:44that I hope to impress on you today is
24:46sales is about listening and it's not
24:49just about you know a hacker you know
24:51asking the right questions it's about
24:52genuinely listening and if you can do
24:54that the rest is easy it really is so
24:59you've got them on the you've you've
25:00spent all this time prospecting you've
25:02now even had your phone calls you've
25:04done a good job listening and then one
25:07thing another thing to know about sales
25:08is there's a lot of steps to the process
25:11you know up here I have a lot of
25:14different steps that you might go
25:15through in a sales process calls emails
25:18pricing calls you know sending
25:21references talking with different
25:24executives there are a lot of steps to
25:27sales and up here these aren't these
25:31aren't just steps hypothetical steps
25:34what I've put up here are actually all
25:36of the steps from one of my very first
25:39deals at clever this is one deal and
25:45frankly some of the stuff is kind of
25:47embarrassing right like met the person
25:50they were interested I emailed no
25:52response I emailed him again no response
25:55I emailed him again they responded I
25:58scheduled a call email no response I
26:01mean this is straight-up embarrassing
26:03and this is from someone who wanted to
26:05buy our product isn't that crazy
26:10so one of the things I hope to impress
26:13on you is it is a lot of work to do
26:16sales well and it takes a lot of
26:18follow-up and you kind of have to have
26:20this inhumane like willingness to just
26:24keep going and push through this this
26:28whole lifecycle probably took about two
26:31months it ended up we ended up closing a
26:33hundred thousand dollar-a-year customer
26:36but this is what it took and I I talked
26:39to a lot of founders who maybe they have
26:41a good meeting they do a follow-up email
26:44they don't get a response and they're
26:45like oh well maybe they weren't
26:47interested after all maybe it's not a
26:48good fit and they disqualify themselves
26:50well just remember this is what a
26:53success case looks like at least if
26:56you're doing enterprise sales and you
27:00know it's not over till it's over and
27:02it's not over till they say no but
27:05sometimes you do have to kind of remind
27:07them you know hey I'm still here hey are
27:09you still interested because probably
27:11your buyers have a lot on their mind
27:13that's not you or your startup and
27:15probably they have a lot of other things
27:17going on in their life and so being
27:19persistent isn't rude being persistent
27:20can be helpful if you do it in the right
27:23way and you're respectful now I will say
27:27one thing here follow-up is really good
27:30and really important but what's also
27:33really good sometimes you get to know
27:36and getting those noes can also be
27:39really good and really helpful because
27:41when you're a small startup with this
27:42you know founder small founding team
27:45you've got to figure out where to spend
27:47your time and energy and you can't have
27:49a pipeline of hundreds and hundreds of
27:50deals going at one time you just can't
27:52you you won't be able to do it and so
27:54there's actually a lot of value my
27:56friend Steve Garrity taught me this
27:57there's a lot of value to driving
27:59conversations to a yes or no quickly
28:02because knows you can move on and get
28:06and start filling the pipeline with
28:08other people that could become yeses so
28:10I would encourage you to have relentless
28:12follow-up you know be determined go you
28:14know don't let don't let things drop but
28:17at the same time if you get a know you
28:19know see it as a as a as a blessing in
28:21disguise because you can move on to the
28:23next deal that could be a yes okay so
28:27you've prospected you've had these great
28:30conversations with customers you've you
28:32know made it through the rigmarole
28:34you've gone through all these steps now
28:37let's talk about closing this is an area
28:39that it just it's weird it's foreign so
28:41you have to figure out how to close a
28:43contract with a customer who's told you
28:44they want to buy it's harder than it
28:47sounds a lot of deals get messed up in
28:48here so let me just walk you through a
28:50few things I've learned one assuming
28:53you're doing a you know an enterprise
28:57you'll need an agreement and then you'll
28:59send it over to the company and they'll
29:00want to change the agreement though it's
29:02a process called redlining and then
29:04their lawyers will send it back to you
29:05and you might look at it or your lawyers
29:07might look at it you might have more
29:08changes and you go back and forth in
29:09this redlining process so the first step
29:13is you need to have an agreement to
29:14propose and by the way they're gonna
29:17expect it from you they're gonna say
29:18okay you know when they're interested
29:20they're gonna say send me an agreement
29:21and make sure that you have something or
29:24you've been working on something so that
29:25you know it's not like oh I'll get back
29:27to you in a month if you don't have
29:31something I've good news which is if
29:33you're not aware YC has an open-source
29:36sales template posted on their website
29:39and I worked on this with James Reilly
29:42it could when Proctor and some other
29:43folks including the Y Combinator legal
29:46team and wisely decided to open source
29:49this so any of you can use it obviously
29:52you'll probably need to customize it for
29:53your needs and at some point you want to
29:54get counseled but as this basic starting
29:56point there's a free template that you
29:59can use for sales and Y Combinator's
30:01website and then once you have your
30:04going into this back and forth I'll
30:06never forget it I have seen some
30:08founders let this process drag out for
30:14months fighting over the dumbest things
30:18when you are at an early stage startup
30:21when you are trying to get your first
30:23customers early customers are like manna
30:27they if you get and if you don't get
30:30them you're not gonna go very far you're
30:32done and yet I have seen startups in the
30:35early phase because they think that what
30:37they're supposed to do or someone gave
30:39them bad advice quibble over the dumbest
30:41things so my advice for you is when you
30:43get to this step especially for your
30:46first early customers they're gonna want
30:48to put weird things in the contract with
30:50indemnity clauses and warranty clauses
30:53and don't say you know get it reviewed
30:55by a lawyer don't sound anything dumb
30:56but your goal is to finish and move on
31:00and just keep that in mind and if you're
31:02going through four or five six revision
31:04processes you're doing something wrong
31:06so figure out how to move this quickly
31:09and don't quibble over small things
31:11get get the first customers because
31:13that's what you need to you know keep
31:15okay another closing trap you got the
31:18customer interested they want to buy
31:20things look great and they come to you
31:22and they say hey actually I want to buy
31:25but only only if you had this one other
31:28feature would I buy it sounds so
31:31promising you're so close they just want
31:33one more thing sure you can build that
31:35thing it wouldn't be that hard
31:37unfortunately once you start hearing
31:39this in my experience unfortunately it
31:42is more often a pass than anything else
31:47and the thing to remember is
31:49unfortunately building that one thing
31:53when someone says oh I would buy it
31:54except it's just missing that one thing
31:56if you built it there might be there'd
31:58probably be another thing after that and
32:00another thing after that and you don't
32:03want to be in a world where you're
32:05building lots of one-off things for
32:06customers now your first customer second
32:08customer do what it takes folks but but
32:13very quickly you get in a world where
32:14you keep where you start hearing this
32:15and you realize it's not a good thing
32:17and so two ways I've seen of solving
32:21this one is well if you really want the
32:22sale and you really want to hold them to
32:24their word and have that commitment say
32:25okay well I'll build it if you if you
32:27agree to you know figure aided by the
32:30product which means I can't demo up for
32:31you today I can't you know show you
32:33reference customers on this thing you
32:35want but I will build it for you if you
32:36if you sign up and if you've spent the
32:38time listening and building the
32:39relationship and they trust you that can
32:41work the other thing is you say look
32:45we're gonna build what you know what
32:48customers need and we're gonna wait till
32:49we hear from four more customers and you
32:53know oftentimes I find even in that case
32:55if they still want the product they'll
32:58buy it even without that one feature and
32:59hopefully end up building what they need
33:01anyways but but at least then you're not
33:04building something for just one customer
33:05third closing trap free trials you get
33:11so close to someone they're so
33:13interested there that your perfect first
33:14customer and then they say yeah we just
33:17like to try it for for 60 days folks
33:21when you are starting your company and
33:23when you are out there trying to
33:24make your startup work you need things
33:26like commitment you need validation you
33:30need revenue and guess what a free trial
33:33doesn't get you any of those things and
33:37so I at every company I've been at I've
33:42never worked at a company where they did
33:44free trials we just said we can't do it
33:46we're spending a lot of time out here
33:48trying to find the right customers for
33:50our product you're spending a lot of
33:51time building the right product you know
33:53we're not gonna we're not gonna give it
33:54away for free on the hopes that maybe
33:56you'll decide you want it but we flipped
34:00it around and said but we want to be
34:01reasonable and we know you're taking a
34:03chance on us and you know there's risk
34:05so we only do annual agreements here
34:07that's our that's how we operate but if
34:10for any reason you're not satisfied in
34:12the first 30 days you can opt out of the
34:15agreement and there won't be any penalty
34:16and cancel and flip it and having it
34:20that way where the default is they're a
34:22customer but if something goes wrong
34:23they're still protected actually meets
34:25both part it's kind of both parties
34:27meeting in the middle and it and it
34:28solves for their concern that they're
34:30taking a risk on someone new well not
34:32while solving for your concern which is
34:35that unique commitment and validation to
34:36keep going and way better to be in a
34:38case where the default is that they're a
34:41customer then the default is well you
34:43need to renegotiate something in 60 days
34:45from now and you're right back where you
34:46started so to the extent you can avoid
34:49the free trial trap so that's closing so
34:55now you know how I've approached
34:57prospecting how I've approached the
34:58conversations how I've approached
35:00closing happy to answer questions on
35:02these when we when we when we break but
35:06just step end on some final parting
35:08thoughts what I've described here is the
35:12enterprise sales process I've used going
35:15from 0 to 1 million first million in
35:17revenue this is this is the exact
35:19process we've used multiple times and
35:21it's worked but not every company well
35:25every company is different and one of
35:27the things that I love to encourage
35:30founders to think about early is what
35:32kind of company and specifically what
35:34kind of sales motion are you going to
35:37have in the long term
35:38Kristof chance who's a VC has this
35:41really incredible blog post I just love
35:44how memorable it is but he says there's
35:46five ways to build a hundred million
35:47dollar business from a sales perspective
35:49if your average customer pays you a
35:53hundred thousand dollars well then you
35:55just need to find a thousand customers
35:57and you're done or if your average
36:00customer pays you ten thousand dollars
36:01then you need to find ten thousand
36:03customers and you're done or on the far
36:06end so those are your elephants and your
36:07deer on your far end he has these flies
36:09and they only pay you ten dollars but
36:12you need 10 million of them and so it
36:16helps to think about as you're starting
36:18to think about your sales motion well
36:20how much are my customers paying and
36:22therefore how many of them I gonna need
36:24to have and what sort of sales motion is
36:27going to be sustainable for my business
36:28because if you're it's the way you're
36:31selling your product today is you're
36:32flying to people you're meeting them at
36:34conferences you're doing everything I
36:35touch you know I described this very
36:38kind of high touch high energy sales
36:39process but your customers are only
36:43paying you $10 a year or $100 a year or
36:46$1,000 a year and you're gonna have to
36:48repeat that 10 million times it's
36:51impossible it's it's impossible and it's
36:54you know way too expensive
36:57for you to build your business that way
36:59on the other hand if you're successful
37:02in building a low touch sales model
37:03where you're able to do things you know
37:06scalably maybe you're selling to small
37:08businesses you know of which there's
37:10millions maybe you have some way that
37:13people doing self-service and sign up
37:15well then you can be over on the right
37:17side of this graph and you can have and
37:20you can have a lower price product but
37:22the price of your product and and your
37:24sales motion are inextricably connected
37:26and that's something that you know took
37:29me a little while to understand but I
37:31thought this graph really helped make
37:33clear is depending on how much you're
37:36able to charge for your product and
37:37depending on how much people are willing
37:38to pay for your product that'll change
37:39how you approach sales as you're
37:41building your company and building your
37:43sales team so those are some lessons
37:46I've learned along the way doing sales I
37:48want it to end and just say good luck
37:52you know you guys are figuring in this
37:53out it's it's the most fun time of your
37:55company you get to have these really
37:57energizing conversations with with tons
37:59of users and figure out if they're
38:00potential buyers and good luck because
38:02you'll always look back on this is one
38:05of the most fun parts of your journey so
38:07thanks for having me
38:14and I think we have some time for Q&A
38:18yeah why don't we start here thank you
38:22very much for the talk quick question
38:24you mention about follow-ups and so
38:25forth what would be the appropriate time
38:27between emails and you know just so you
38:31don't feel this you don't seem
38:32overbearing and how I I'd say on average
38:39maybe a little under a week so if you
38:41email someone and they don't get back to
38:43you I think it's you know polite and not
38:45overeager to nudge you know five six
38:48seven days later yeah
38:51oh here hi my name is raisin I was
38:56happiest on sales day at what point
38:59throughout your process did you feel
39:01like you were pestering the customers
39:02you kept you put in a nice way you know
39:04like oh you got to keep on going you got
39:06to keep on asking you got to keep on
39:07sending them along the process did you
39:09ever feel like you were pestering your
39:10customers or not yeah so the question
39:13was do you ever feel like you're
39:14pestering your customers when you send
39:16them follow-up emails I like to think
39:22that if they haven't told you know then
39:27you you know you're within your rights
39:29to follow up you know a reasonable
39:31number of times if you're talking about
39:32emailing someone eight times and they
39:34haven't gotten back to you I mean take a
39:35hint great but you know I think if they
39:40haven't told you know and especially if
39:42you had a earlier conversation where
39:43they were interested you know assume the
39:45best assume they're busy assume that
39:47they've got other things going on you
39:49might not be their top priority but
39:51there's nothing wrong especially if
39:53you're doing it on a you know weekly
39:54cadence or something like that and your
39:56emails are thoughtful and personalized I
39:58have never once in my life been annoyed
40:01by somebody sending respectful
40:03follow-ups as long as they seem
40:06thoughtful and personalized don't forget
40:07that part if it's just like I'm getting
40:10mail merged every week with another
40:11template I mean you know nobody likes
40:14that person but yeah over here
40:32yeah I would say you don't learn about
40:35product market fits from oh sorry the
40:37question was when you're getting these
40:40nose or in early sales conversations how
40:41do you know it when they're just not an
40:43early adopter or an and how do you know
40:47when they're just you should be reading
40:49signs of product market fit or lack
40:50thereof and my answer to that is I don't
40:54think you discover a product market fit
40:55from the nose I think you only discover
40:58so I think when you get nose there's a
41:00lot of reasons people could give me
41:02giving you nose and I wouldn't even
41:04necessarily believe you know the reasons
41:06that people you know give nose because
41:09in the same way that you can't trust
41:11when VCS give you know you know the
41:13reasons is there's just people struggle
41:17to be upfront and honest and you know
41:20everybody wants to be polite well you
41:22get to product market fit and you know
41:24you have something as when you start
41:25hearing yeses and so you just have to
41:27try and if you can't get any yeses
41:28well there's your signal that you don't
41:30have a product market fit and if you can
41:32get yeses there's your signal that you
41:33do have product market fit and I think
41:35that's all that matters what is the
41:50importance of reference customers in
41:52terms of would you prefer going out to
41:55big brands big names even if they
41:57require far more work than going full
42:02that's know but yeah that's a great
42:07question it is how should you prioritize
42:11big companies which would be amazing
42:13names and logos if you had them as
42:15reference customers or small companies
42:17which might be faster
42:20you know I I think about the advice YC
42:23gives for investors which is to do a
42:26breath for breadth-first search meaning
42:28optimized for speed and optimize for you
42:33know I would say talk to all those
42:36companies talk to the big company talk
42:37to the small company but then you'll
42:39know which ones can can move quickly and
42:41not and optimized for speed a customer
42:46is better than than no customer and the
42:50big companies are never the are never
42:52these great they're great references you
42:55imagine necessarily I would go for who
42:57needs your product the most and who will
42:59move quickly and the reference stuff and
43:02you know the logo stuff you know I don't
43:04think you have to worry about that in
43:06the early days you're just looking for
43:07validation and customers yeah over here
43:12hi area elevate this club I'd like to
43:15hear about your pricing journey and we
43:17have asked of interested customers that
43:19were beginning to now get nervous about
43:21the pricing so one of you about your
43:23journey PS I did had sales at the UCLA
43:25baby bro oh nice oh good to meet you
43:28so your question was about the pricing
43:31journey yeah and how to set pricing that
43:38is a hard question because it's so
43:40specific to every company I'll tell you
43:43what we did at clever we guessed you
43:48know we guess and you get feedback it's
43:51actually kind of neat you get feedback
43:53from the market you know pretty quickly
43:55and you can in the early days you can
43:57iterate you know there's a there's a
44:02Patrick McKenzie likes to talk about how
44:06most startup founders need to charge
44:08more and we'll usually guess too low so
44:11maybe one strategy for guessing would be
44:13to guess a number that seems reasonable
44:14to you and if you can close that sale
44:16you know try doubling it the next time
44:17and if you can close that sale try
44:19doubling it again you it's really hard
44:22to know what customers will pay but I'll
44:25tell you that that you know that
44:26original deal I mentioned for $100,000
44:29that we closed very early on
44:33why was it $100,000 and not you know
44:36half of that or double that it was just
44:39you know us doing a little bit of this
44:41and guessing but we got feedback and you
44:45know iterated from there on the on the
44:47pricing model so I think you just got to
44:50whatever you say you got to believe it
44:52this is the right price for our product
44:55there's no other price would that would
44:56be fair for this you know this thing and
44:59but then quickly you know be willing to
45:01iterate as you get that feedback yeah no
45:04problem in the back there yeah I'm not
45:25sure I understand the question yeah so
45:52yeah so the question is how do you if
45:54you're talking about a $50 price point
45:56for a product how do you and you know
46:01early on in a company's journey how do
46:02you bootstrap a sales effort around that
46:04I mean if you're talking about a $50
46:07product even $50 per month you are
46:10basically basically you probably
46:13shouldn't do any of these things and you
46:14should instead invest in a marketing
46:16function because you are gonna need so
46:18many customers and you know you can't do
46:21it in a high-touch way so you know I
46:23look at things like you know demand
46:25generation and email campaigns and
46:27self-service signup flows and referral
46:29codes and things that you know companies
46:32that that small price point kind of have
46:34to do to be scalable or raise the price
46:39of your product to support you know a
46:41true sales either way but that's
46:44probably how I'd approach it
46:57why isn't there anything on your website
47:01yeah there's no product other than the
47:05product that's something I don't talk
47:10okay it sounds like sometimes founders
47:12do this I said what what if there's not
47:14enough case studies on our website for
47:16I thought of founders think they're the
47:21net it's never enough whatever they have
47:23is never enough to get people to buy if
47:26they were one had one more reference
47:27account if they had a few more case
47:29studies that's what people you know
47:31that's what it would take for people to
47:32buy guess what if you go on the Wayback
47:35Machine for clever calm from 2012 we
47:38didn't have any case studies you know we
47:40didn't have any customer testimonials
47:42all we had was a page that described the
47:44product and and you know and that was
47:47enough to get you know for people who
47:49had the need they didn't care about any
47:51of that they were like oh finally
47:53someone's built a solution to my problem
47:54great I will run through walls to get it
47:56and we didn't you know we maybe we have
48:00some of that stuff five six years in but
48:02we certainly didn't have it at the
48:03beginning so uh yeah over here sorry one
48:13oh what resources yes the question is
48:22what resources have I learned from you
48:26know in doing sales there is well first
48:34there's no excuse there's no there's no
48:36substitute for doing it I've read a
48:39number of books on sales I've you know
48:41watch things online ninety five percent
48:43of what I've learned has just come from
48:45trying it over and over again and
48:46actually it really appeals to the math
48:48and statistics side of me because you
48:50kind of get to a be test everything yeah
48:53you try something new in a conversation
48:54oh that didn't really work okay gonna
48:56you know try something again
48:58you just get to eater
48:59over and over and over again and so that
49:02is that is the number one way to learn
49:03sales there are some books there's this
49:06one that I love it's called how I picked
49:08myself up from failure to success in
49:10selling it's from like the 1950s and
49:13it's written in this kind of hokey corny
49:16way but it so beautifully encapsulate
49:20the journey of learning sales and you
49:24know some of the hustle and things that
49:25I was describing as part of it earlier
49:27so that's one resource I've recommended
49:29to founders but really you just got to
49:32okay last question yes you look I give a
49:37question hiring salespeople first of all
49:57you have no business hiring salespeople
49:59until you've done a lot of sales on your
50:00own could be good and the reason is not
50:03just you know because of what I was
50:05saying earlier about how you know good
50:07you are it's because you won't even know
50:09what kind of people to hire until you've
50:10done a lot of sales on your own you
50:12won't know what the core skills are is
50:13it is it traveling a lot is it a lot of
50:16phone calls is it a lot of like you know
50:18really good emails you just won't know
50:20once you have done sales for a while the
50:23good news is you'll know exactly the
50:25kind of people that you should hire and
50:27typically that's how I've done it so
50:29I've done sales you know by myself for
50:32three six nine twelve months done made
50:36it repeatable to a to a degree and then
50:39there's you know there's there's
50:41literature out there about what you want
50:43your first sales reps to look like and
50:44oftentimes the term that's used
50:46Renaissance sales rep I and that's kind
50:50of differentiating from the
50:51coin-operated sales rep maybe you know
50:54coin-operated meaning like they they
50:57need everything they need every piece of
50:58collateral every play book every script
51:00but then they can go out and execute on
51:02it just relentlessly on the other side
51:04of that spectrum you have the
51:05Renaissance reps what you needed to
51:07start up and these are folks who don't
51:09need a lot of direction don't need a lot
51:11of playbook and they just
51:13figuring things out and probably your
51:15earliest reps you know even a clever
51:17today I you know we're Renaissance but
51:20you know bigger companies will have much
51:21more on the other end of the spectrum
51:23and so you want to look for those
51:24Renaissance players who can are really
51:27love to learn oftentimes they'll have
51:29some industry expertise but maybe not
51:32too much you know you probably don't
51:35need the person is your first
51:36salesperson who has you know just you
51:40you probably don't want someone you know
51:41don't be too blown away by fifty years
51:43of experience not that that's bad but
51:45it's also you can probably get away you
51:48know if you have the hustle and the grit
51:49that's what's most important at this age
51:51more than experience and so yeah those
51:55are the things I look for is so a lot of
51:57energy a lot of passion kind of that
52:00Renaissance sales rep mentality and then
52:02pattern matching to what I've been doing
52:04in the sales process if they have those
52:05skills great thank you
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