Have you ever caught yourself daydreaming in a long and boring staff meeting about how much better things could be if there was a tool to make planning the meeting easier and more effective? Or what if you got your manager to see things your way about a new way to market your company? Guess what? You’re probably applying Startup Thinking without even thinking about it!
Enterprise scale business requires a management style that favours the corporate whole over the individual. The French invented a word that describes this and which the world has adopted—bureaucracy. It’s no surprise that this word emerged right around the time of the industrial revolution.
Typically, a more bureaucratic management style starts to take root and becomes an absolute necessity for stable growth when a company’s headcount climbs above 500. A well-functioning management bureaucracy is an absolutely critical requirement when you’re a 5,000 person enterprise.
Take the sales process for instance. When you’re a smaller business a certain amount of latitude exists for the sales team, say when you’re offering a customer a discount as part of the negotiation process to close a deal. As companies grow and sales departments become more structured, it becomes more difficult to offer a discount without first getting managerial approval—and for good reason. Cashflow and performance projections on a $500 million pipeline become a lot more complicated when discounting isn’t closely managed.
However, it’s precisely this management style that makes enterprise business so susceptible to startup disruption. Smart enterprise companies know this and invest in activities that are more closely tied to the spirit of the startup.
Think of Google’s 20% Time or 3M’s 15% Time. Other companies support innovation-driven ‘skunkworks’ divisions that operate without many of the bureaucratic restraints imposed on more traditional lines of business.
The drive for innovation fuels much of the M&A activity for larger organizations—and their preferred target? Startups. It can’t just be the awesome nap rooms and free snacks that attract corporate money to the startup scene. So what is it?
Talent. IP. Customers. Startup Thinking brings innovation to the enterprise.
I recently had a conversation with a friend of mine who is CEO of a thriving retail business. He was telling me how much success he was having with Facebook as a marketing tool. Having previously worked for Hootsuite—a social media management tool—I was pleased to hear that social media was helping my friend build his business.
My friend told me how other business owners have started approaching him to ask him for advice on how they could leverage social media to increase sales. He’s too busy working on his business to start consulting, but he was amazed how frequently other business owners confided in him how little they knew about social media.
They were sharing horror stories of out-of-control customer complaints, posts that failed to connect with an audience and generally a lack of social success. They wanted my friend to fix their Facebook problem.
Social media for all its popularity can still be a challenge for business owners. Using old school sales pitches and traditional PR messaging just doesn’t work. The complaints my friend was hearing are a commonly shared frustration for startups that are trying to leverage social media.
If a customer walked in the door would you hand them a brochure and point them to the checkout line and wish them luck? I hope not! Many businesses do exactly that with their social posts. What kind of relationship are you building with your customer?
Start getting your social on by thinking about which social media network makes the most sense for your business to be active in. Don’t be a Jack of all trades and a master of none. Where do your customers live on social media? Are they on Facebook? Twitter? LinkedIn? Does your sales process lend itself to one network over another? Begin there.
And how will you define success? Is Facebook is better at driving customers to your business or do you get more traction on LinkedIn? How do you know? Are you asking your customers how they found out about your business? Better yet, track every interaction you can.
We live in the era of big data, so start using it.
So you’ve moved beyond proof of concept. You have a product that’s earned validation in the market and now it’s time to start ramping up your sales efforts and start building a business. So how is that going?
Sales is the lifeblood of business. Without sales your startup is just a good idea that failed to launch. And as the saying goes, it’s not the idea it’s the execution. So how are you selling your product or service?
What is your sales strategy? How are you going to market? What’s your positioning? How will you market your business? What’s the competition doing? Are the founders or CEO managing sales activity or have you hired someone to do that?
Sure, a capital investment will carry you through the early launch phase, but as many investors will tell you they want to invest in companies that are already showing traction so their money contributes to accelerated growth not science projects.
As a founder, keeping your eye on early sales activity and gauging its success will help you avoid going down the wrong rabbit hole. Going after the wrong target market will not only consume precious time and resources but it can set your business on a dangerous course if your competitors get it right out of the gate.
As you build your business you are going to hear a lot of tall sales tales. Stories of how CEOs singlehandedly build multi-million dollar businesses with nothing but a phone and single minded purpose are legion. There’s no doubt that some CEOs get lucky and there are many that have great charisma and personal networks that help launch amazingly successful businesses.
I’m a big believer in doing the work. Sales is strategic. Sales is tactical. Sales is a process. Sales is methodology. Successful sales systems require hands-on management. Sometimes you get lucky but you don’t build a successful sales program based on luck.
The sooner you start building a sales system the sooner your business will succeed.
Let’s assume that you are Software-as-a-Service (SaaS) business. There are three key metrics you should track and measure all your sales activity against:
- Customer acquisition
- Customer churn
- Lifetime customer value
How your customers pay you (monthly or annual) and how your revenue model works (how you license your product—by user/department/organization) will determine the inputs for your model and indicate goals you need to monitor. The sooner you start tracking these metrics and reporting against them the better.
Remember—hope is not a strategy.