Years ago I was the president of a company which held the patent for storing and forwarding faxes. Our salesmen would start a conversation with a prospect by saying, “I’m here to talk to you about your fax problems.”
The prospect would respond, “I don’t have any problems with fax. I dial a number, wait for the fax tone, insert the document, and walk away. No problem.”
This was a big problem for the company I was leading.
The startup must solve a problem which needs solving now.
Startups have one big issue which is out of their control. Time.
Time is money. There is never enough money, so time is of the essence. As an entrepreneur, it is your job to get to revenue in the shortest amount of time possible. When you generate revenue, you extend your time. Extend your time and you win.
So what is the secret to conquering the time problem? You must build a product people want…now.
Here’s what works.
From 35 years of watching what works and what does not, here’s what I have found that successful companies do.
1. They have a sixth sense for qualifying. They know their market well. Because of this, they focus on people who are experiencing the problem their product solves. Not all the prospects have the budget to solve the problem, but they sure as heck have the problem.
2. They don’t beat around the bush. When they finally get to talk to the prospect, they zero in on the problem they solve. It is all about time. They have to make a sale today. This means they need to be talking to someone who will buy today. As I said earlier, long sales cycles kill startups because they waste time and burn money. The entrepreneur must be more concerned about time than he is afraid of rejection.
3. They price the product to match the severity of the problem. Especially in these early sales, the price must provide a more than reasonable return on investment. Underprice the product and you lose credibility. Price it too high and you are in for an extended sales cycle. Getting in the door, getting paid money, and establishing a reference is critical.
Experienced entrepreneurs solve a well-defined problem and close deals quickly. If your sales cycle seems to go forever, revisit the problem you are solving. Narrow the scope and close deals.