The Startup Sales Guide

The Product Market Fit guide to sales & go to market strategy

Hey everybody welcome back to the Product Market Fit Newsletter 🚀

My name is Guillermo Flor and I write this weekly to help founders, growth professionals and product people to grow & fund their companies.

Let’t get to work, but before… Fun fact: Two of the lead singers of the Chainsmokers are GPs of Mantis VC a Venture Capital Fund that invests in quite deep tech software. So, listen one of their songs for the ocassion 👇

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News!

• I’m opening up 2 hours of free weekly consulting for startups fundraising or going to market. Find a slot here.

• Inbound website is live! Go check it out!

Premium Founder Toolbox:

Ongoing! Updating the investors network (access with PMF Founder Plan).

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Now, let’s get to the real stuff.

I see many startups following the wrong go to market strategy and eventually kill their companies.

This is a mistake made mostly by first time founders which are basically learning on the go (don’t get me wrong, it’s the best way to learn, but when you don’t know what you don’t know it is very easy to make mistakes that kill your company).

So, I wanted to do a quick explanation of what might be super basic for expert founders but not so much for people starting their business owner journey.

1. The company structure

Every startup is:

1. Marketing: Helping people know you exist & that you are good

2. Sales: serving the product to the customer & getting paid for it

3. Product: solving the problem

4. Finance: Make sure you have money to produce, market & serve.

5. Ops: Coordinate everything

2. Strategy starts at the customer

Who your customer is affects your whole company structure, from the way you market it, sell it all the way to what type of product you build and how much you are going to attend your customers.

The first thing you have to think is: what is my ICP and how much it can pay for my product/service.

You’ll typically differentiate between:

1. Entreprise: they typically have big budgets they are looking to invest in improving their processes, sales, product, etc. However, they are hard and take a long time to sell because there are many internal processes and checkpoints to approve a purchase.

2. SMBes: they are typically easier to sell but have low budgets.

   

2. The reality of outbound vs inbound strategy

Now, weather your ICP is a SMB or an enterprise is going to affect your go to market strategy dramatically:

1. Pricing:

For SMBes: Your average MRR will not be higher than 2/4k. If your pricing is over that and you target SMBes, it’s probable most of your target customers won’t be able to afford your product.

For Enterprise: Your average MRR should be above 10K.

2. Marketing:

For SMBes: Inbound Marketing Strategy

Because your ticket is so low, your marketing strategy has to be focused on generating leads that access your product on their own.

You cannot afford to hire a sales team, and even if you can, think about it: A team of 4 sales people might make 1 o 2 sales a week doing outbound (at most). With your MRR of 500€, the unit economics make no sense.

You’ll never grow fast enough and never make money.

For SMBes Top of mind Marketing

When selling to enterprises, marketing will help you get your foot in the door.

However, most of the time, you’ll need to have a sales team and a customer success team to be able to close the deal.

2. Sales:

For SMBes: Your website + product has to do the selling. I will talk about this in detail in another article.

For SMBes: you need sales teams & customer sucess following a Playbook

The B2B sales funnel that always closes sales

I closed the first sale of my startup in less than 14 days. This was at the time when we didn't have a product other than a very limited open source version of Dropbox while we were trying to validate a contract management software.

I had no experience whatsoever in sales. I had never been in a business role before. To be fair, my only professional experience before was in M&A Law, drafting agreements and studying regulations all day.

However, I didn't close this sale by luck, I knew exactly what I was doing.

This is how first time founders can make their first sales with ease - the B2B Saas Sales funnel