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How We Handle Sales Calls

Apr 06

As a business with public contact information, we are inundated with sales calls. The process generally runs roughly like this:

We get a phone call from a number that is often “blocked” for caller ID. We’ve learned to screen those calls. Some leave a voicemail, some do not. If they aren’t blocked, we’ll answer the call, and we’ll generally get blasted with a run on sentence. If it’s a short introduction, I’ll politely decline. If it’s a long monologue, I’ll hang up.
We get a followup email from the caller describing their service. They will ask for a 15-30 minute introductory discussion/presentation. Depending on how good the email is (in terms of grammar and presentation), I’ll drop a reply saying that we’re not interested or ignore it entirely.
I’ll often get a 2nd email saying something like, “when would be a good time to follow up with you. How about I drop you a line in 3 months to see how things are going?” Um, no thank you.
The really well-trained salesfolks will often also say, “Do you know of anyone else who might be looking for our services?” The answer to this is always no. I’m not going to make an introduction (which is often tantamount to an endorsement).
I don’t want to be a jerk to salesfolks. I’m sure they are by and large good folks and are just trying to do their job. But we NEVER BUY ANYTHING THIS WAY. Between a few Google queries and a few “lazyweb tweets or emails”, I can drum up a short list of vendors who are thought well of by SOMEONE, and perhaps can get a list that are actually recommended by people that I know and trust. Why would I ever buy from the salesperson who happens to be calling me? Even if they were introducing me to a class of software/service that I wasn’t aware of and really wanted, the first thing I’d do is thank them for the info and start googling.

As people get smarter about searching and social networking (and thus social recommendations) go mainstream, I continue to wonder at the future of outbound lead generation via phone/email.

So, I’ve got a new canned response in Gmail:

Thanks for your inquiry.

RescueTime does not respond to unsolicited sales requests and we’d prefer to not receive them.

When we’re interested in software or services, we prefer to do some combination of searching on the Internet and asking trusted people in our network for their recommendations.

If you’re interested in earning our business, your best bet is to serve the customers you have well so that when we ARE looking for what you offer, you’ll be highly recommended in our network and across the web.

Thanks for your understanding.

Cheers,

-Tony Wright, founder of http://rescuetime.com

http://blog.rescuetime.com (company blog)
http://tonywright.com (personal blog)

Quick Thought on Hearing Brad Feld Speak

Feb 26

I saw Brad Feld speak last night at Beer, Brad, and Boulder (you can see the recorded stream and chat here) and was really struck by something that he said.

In response to the question: "How broken is venture capital?" he said (paraphrasing, among other things): "It's not broken, but it is saturation. It's absolutely cheaper to build companies nowadays, but it's not necessarily cheaper to build them and scale them. Venture Capital is still necessary to scale businesses from the prototype stage, but no longer quite so valuable to get to that prototype stage."

(note: this is a test using Posterous to automagically post to this blog– sorry for the brevity!)

Posted via email

Startup Postcard from Corvallis, Oregon!

Jan 26

On Friday I spoke at a “Business Bootcamp” in Corvallis, Oregon. The event was fabulous (big thanks to John Sechrest) and I was pretty impressed to see that kind of passion for startups in Corvallis.

I wanted to follow up with that community with a few thoughts (that might be interesting to a broader audience, so I’ll post it here).

Thought #1: The Valley is a Unique Animal

After the Y Combinator experience, we dove into fundraising in the Valley as well as Seattle (where we ended up settling). It didn’t take long to give focus our efforts largely on Silicon Valley. Don’t get me wrong– there are some great Seattle investors. But there just aren’t many of them, and as Paul Graham points out, investors outside of the Valley just aren’t very bold. At the Business Bootcamp, a local angel investor spoke for a bit after I did about what he looks for in a company and he seemed even less “Valley-like” than Seattle investors. The big differences that stuck out to me were:

A strong emphasis on patents/IP (in 20+ meetings with VCs and angels before we were funded, not a single one asked us for our thoughts on this).
A strong emphasis on written business plans and financial forecasting (we never were asked for anything beyond an executive summary and never were asked for any financial projections except by a single angel group in Seattle).
A desire for a big equity stake. The Corvallis angel had a an equity floor that was a third more than the premium “household name” angels in the Valley. Presumably, this is because the Corvallis angels aren’t too plentiful and have a captive audience.
A desire for a more fully formed team. He wanted a 4-7 person team before he invested.

For the record, I don’t think ANY of this is bad. I just think it’s SAFE. I imagine a methodology likes this results in far fewer failures, but also results in fewer hits and disqualifies all sorts of non-traditional teams. I think many of the startup home-runs in the last decade or two would’ve been shown the door rather quickly in Corvallis. Boldness might not be a virtue from an investor’s perspective (the landscape is littered with the financial corpses of bold early stage investors, I’m sure), but it certainly is from an entrepreneur’s perspective.

Thought #2: Audience Questions

The third presenter gave a fabulous presentation called “Do you have what it takes to be a Startup CEO?”. It was chock full of info and I certainly learned a lot. Unfortunately, there were two questions from the audience that I felt weren’t answered very well, so I’m going to take a shot at ‘em.

“I’m hearing that we need a team of 5-7 people, paying customers, provision patent applications, and mess of other things before we can even begin to ask for money. That seems inherently contradictory with the idea of angel investment.”

It does, doesn’t it? Smart angels seek to mitigate/minimize risk and most angels are pretty smart. There’s nothing more wonderful than a startup with 5-7 great team members, growing revenue numbers, a pile of great patent apps, etc. Unfortunately, angels who are looking for this kind of company are really “later stage” angel investors. Unless you, as an entrepreneur, have a million bucks to get to that point, you have two options. One, find a bolder seed-stage investor (in Corvallis or move the the Valley where bolder investors are more plentiful). Two, get some freakin’ traction. Seriously, dial back your idea to the most basic offering you can manage that people will use/buy and build it with a co-founder or two (in your off-hours if you have to). If you can launch SOMETHING that people really love (and if the TAM is big enough), investors will listen. You’ve reduced two of the main risks that they are worried about; That you are a screw-up who can’t launch a product and that what you build ends up not being particularly interesting to your target audience. The better your traction and the steeper your growth curve (in terms of usage or dollars), the easier fundraising is.

If you don’t have a gold-plated team (read: previously made an investor lots of money), a pre-existing relationship with an investor, or TRACTION, I seriously advise not trying to raise money from anyone but friends and family. Given that most entrepreneurs aren’t gold-plated (I sure as hell wasn’t) and building relationships with investors is a hard to do from scratch, your only option is launching and building traction.

“I’m a college student here. What advice would you give to an aspiring entrepreneur with a notebook full of ideas?”

The speaker quite literally responded with a long answer that amounted to, “Not everyone is CEO material. You should consider that you likely aren’t CEO material.” Really? Is that what we want to tell aspiring entrepreneurs?

The right answer (IMO) is this.

First, pick the idea that you’re going to attack. I’d say, focus on tractability with a strong bias to the ideas you are most passionate about as well as the ideas that have some built in marketing (SEO or viral– relying on word-of-mouth and salespeople is difficult and expensive).

Second, figure out what you’re good at that a startup needs. Hopefully, you can code things, design things, or sell things because the vast majority of the first months of a startup is comprised of that kind of work and precious little else.

Third, read everything here: http://ycombinator.com/lib.html

Fourth, save money or borrow a few bucks from family/friends so you can work on it full-time for 3 months. If you can’t do that, do it half-assed (it can be done!).

And finally, don’t listen to people who tell you that you might not be CEO/startup material until you’ve taken a stab at it. The world is full of unlikely CEOs from Steve Jobs to Bill Gates to Mark Zuckerberg. Roll the dice and dive in– when you’re on your deathbed, I’m betting you won’t be saying, “Gosh, I wish I could go back and take fewer risks.”

Startup Founder Evolution

Nov 15

In the past two months I’ve been on two different panels with other entrepreneurs. The first was at WTIA in Bellevue, WA (“Cashing in on Web Services“)– the other panelists were very clearly what I’d call “business entrepreneurs”. All of them had relatively successful funded startups, but not a one of them had probably written a line of code, moved a pixel, wrangled a server, or written a line of copy in months or years (some probably never had).

In contrast, the most recent panel I was on (at the O’Reilly Web 2.0 Summit) was with what I’d call “builder entprepreneurs”… All startups with great traction, some funded, but all of the founders were directly engaged with the creation of the product. They designed, coded, played sysadmin, and played all sorts of other production roles for their startups.

The contrast was startling, and it made me think hard about my earlier contention that the “business guy” doesn’t really have a useful role to play in the very earliest stages of a software startup. The first panel had a pile of examples of business guys leading startups to some significant (sometimes dramatic) success.

At one of the other panels at the Web 2.0 conference, Dave McClure (master of 500 hats and 473 font colors– and one of the smartest guys in the game) summed up the life-cycle of a startup in a great way. “There’s the product development phase, the market development phase, and the revenue development– or revenue optimization– phase.” Rings true to me.

So with this in mind, let’s track the value of a “product entrepreneur” over the early life of a company:

Now let’s track the value of a “business entrepreneur” over the early life of a company:

(note: I’m talking about one person’s ability to make a major impact with a startup– I’m not saying that either person is useless at any stage of the startup… And, of course, exceptions abound)

As I’ve said before, the business guy often doesn’t have a lot to do in the early stage of product development– especially if the builders are building something that they actually want themselves. If you’re a bunch of hackers building a simple photo sharing, you don’t need a business guy telling you what the market wants. Of course, if you’re a bunch of hackers building business time management software, you might well need that. Your mileage may vary.

But what I haven’t said before (and what I’m coming to learn) is that the product entrepreneurs have an increasingly marginal role as a startup evolves and becomes more successful. In fact, I’d argue that they are in a rude awakening– they either need to evolve into business entrepreneurs (as Gates and Jobs did, for example– both shrewd business guys) or hire people to play that role (a la Eric Schmidt at Google). Building an asset is the first (and most important) challenge. But finding the customer for that asset and maximizing the revenue/profit is also a challenge (and one that many builders are ill-suited to handle).

It feels like product entrepreneurs are oftentimes “cowboys”. Flying by the seat of their pants, they rally a small team to build a product that people want. It’s no surprise that this is really freakin’ hard and requires a mythical combination of brute force time and effort, insight, customer empathy, and a huge pile of luck. Saddling the product team with a biz guy who chases big customers and locks in the product direction too early can be deadly, as the Wizard points out:

This is one reason I hate to see very early stage companies sign a big customer before the product is baked. You are encumbered by product commitments and customer support before you truly know what the market wanted. You have to be passionate about a customer and the product when you should be laser focused on the product. The customer’s needs and your goals vis a vis the market may diverge. In an effort to show progress, however, the marquee customer is attractive in the belief it will help attract investment (and this may indeed be true). In a previous life before FeedBurner, my founders and I made the mistake of signing a big name customer to a paid monthly contract before we really knew what the product’s place in the market should be. Won’t ever do that again.

The product development phase of company needs product development people and precious little else.

But as the market development phase sets in, builder entrepreneurs are oftentimes increasingly obsolete. It’s no longer time to hurl features willy nilly at your users– you’ve already built something that they like. No you need to measure the hell out of it and turn it into something that they love. You need to iterate on it and turn it into something that confuses 4% of your new users instead of 7%. It means finding a way to tune your viral loop and conquer your SEO enemies to increase the organic flow to your product. And you need to start expoloring the market to figure out who they hell is going to pay for all of this. That means crafted adwords campaigns. That means cold calling. That means price experimentation. That means exploring the world of direct ad sales. Well, it can mean all sorts of things, depending on whether you are a free web service, a freemium product, a pure b2b play or some combination thereof.

But you are firmly out of the world of building products and drifting into the world of iterating a product and exploring a market. And, likely, you’re in the world of sales, marketing, and instrumenting the hell out of your app/site.

As Papa PG says, if you look at the leaders of successful tech companies you see more CS degrees than you see MBAs. That makes sense– geeks are critical to conquer the first (and most important) problem of a startup… Building a badass product. But if you look at these same tech companies, you see CS geeks who’ve actually set aside their geeky roots (though maybe not their geeky instincts) and become very very shrewd business guys. And you also see inferior products kicking the crap out of superior products through better sales/marketing/and distribution.

So to all of you builders out there… Beware! When you reach a challenge in the evolution of your business, the most natural thing in the world is to frame it as a product problem. “If we just build this new feature/product, we’ll be off to the races and we’ll never have to do any of that business crap!”. Keep your eyes peeled for the time when you have to personally evolve and start tackling business problems, or step out of the way and let someone else do it for you.

Startup Programming Jobs: C++, C#, and Java Reign Supreme?

Sep 15

This will be a small post, but I stumbled onto some interesting data that I thought I’d share. As a background, we’re currently searching for a great C++ dev to work at our startup here in Seattle. I decided to do a bit of research to see other job postings, compensation packages, etc.

I was startled to find that (in Seattle) C#, C++, and Java jobs are hotter than everything. Period. By a monstrous margin. Take a look (numbers in parentheses are the results counts as I write this):

Jobs with C# in the title (759)
Jobs with C++ in the title (537)
Jobs with Java in the title (307)
Jobs with ASP in the title (209)
Jobs with Ruby in the title (85)
Jobs with PERL in the title (50)
Jobs with PHP in the title (46)
Jobs with Python in the title (26)

Wow. C++ jobs almost end up being more plentiful than all of the major scripting languages combined. C# jobs are even more plentiful. Toss the word “startup” into your search query and it reduces all of the results, but the big-iron languages still win by a wide margin. Really interesting to contrast these numbers with San Francisco, where you see fewer C++ and C# jobs (predictably as you move away from Microsoft-country), more Java jobs as well as a few more Rails and PHP jobs (but Java wins in SF by a landslide).

So if you could snap your fingers in Seattle and be a rockstar/ninja programmer in one of these languages, which would you pick (from a career perspective)?

(nota bene: recruiters who use the word “rockstar” or “ninja” in a job posting deserve to be flogged. While we’re at it, anyone using the phrase “FAIL” or “EPIC FAIL” deserves a healthy thrashing as well.)