I retired from personal blogging in July 2008 but you can find me over at blog.xero.com
Follow @roddrury
Had some nice feedback today from the CEO of a tech company who had a few team members came to an event I spoke at in Auckland last year.
I made what I thought was a fairly simple point that your first sales are about getting some runs on the board and some reference sites. Rather than say - our software is worth $20k so that’s the price - do what you have to do to get those first few sales. Treat your first year in business as a fixed cost so any money that comes in is a positive contribution, but more importantly, a reference.
The CEO’s feedback was they were a bit hung up on the pricing for their first deals. They changed their strategy to get some wins and after a couple of months were doing a number of full priced deals based on the reference customers.
A very simple perspective change and they’re off and running.
I thought that was cool.
blog
I appreciate your post and it is v. timely. I too have a start-up tech company and we have been debating our sales strategy - if we should go straight to the larger “target customers” (and more potential revenue), or initially to smaller operators in the same sectors.
The way I see it as by going to the smaller operators 1st, this will allow us to refine our service, our sales pitch, and pricing based on their feedback - before going to the bigger players with a better service overall and some references.
With regard to Haydns post: I believe he is spot on with his new strategy, although the end game of his business will dictate strategic development beyond the initial outcomes he desires from this initiative.
Through this strategy, we have been developing our offering and working with web based surveying for 6 years. We now have a great collection of ‘blue chip’ clients. I would add that we have not had exponential growth like many start up techs desire, and I believe one of the components to this type of growth is getting runs on the board with larger clients that create the reference sites and greater publicity story to leverage from. After a number of lean years supporting low margin clients with high resource input my strategy is now a mix of;
1)Cut your teeth and develop your systems, offering, and pitch on smaller clients as they are high maintenance and will often present challenges and opportunity for your ongoing business development. They indirectly help you grow a leanness and efficiency to your systems and business.
2)Pursue in-roads into larger clients through what ever means you can, as they are the eventual sponsor to your business growth. Along the way you may discover that the desires of your ‘ultimate’ clients are not the same as that of the smaller clients you have been trying so hard to please. Your future offer will then need to reflect these differences.
In our business, we have now developed offerings in web surveying to support both small and large clients with a software-on-demand type SaaS. A single Enterprise engine runs both offerings, with the differing user interfaces controlling the feature set offering for each market. Ironically for us we have gone full circle and our end game is coming back to Small and Medium sized Enterprises with a focus on volume to generate revenue.