I believe in four simple things: be confident, ambitious, work hard and trust yourself, and you will achieve what you want.
—Hasnain Noorani, Pride Inn
In the previous chapters we discussed how entrepreneurs can identify their target audience and assess whether their idea or product fills a need within that market. The next step is to engage stakeholders, demonstrate the value of what the entrepreneur offers, and achieve buy-ins. This is the initial phase of the engagement process, where entrepreneurs reach out to their leads and pursue those that show interest. It is a time of making calls (we will explain the difference between cold and warm calls in a bit), managing gatekeepers, getting appointments for meetings (face to face, online, over the phone), and eventually pitching and conversing with prospects. It is a time-consuming process filled with surprises, objections, and tons of challenges (we will also discuss this in greater detail later). While the nature of this engagement will depend on the particular parties and products involved, the overarching process can be broken down into what we like to call the “Six Phases of Yes” (Figure 4.1).
Identify: This phase consists of drawing up a list of potential stakeholders—everyone from prospects to investors, employees to advisers. Names can be mined from publicly available information or from the entrepreneur’s close circles, but either way, they are often those with declared or demonstrated interest (direct or indirect) in the idea/product at hand. The idea here is to brainstorm without editing (that step will come next). For example, when you’re looking for funding, don’t just list banks and other lending institutions, but consider outside-the-box options like crowdfunding and angel investors.
Figure 4.1 How to navigate the six phases of yes
Seeking prospects is the most obvious—you want to list individuals and entities that could potentially benefit from your idea. You can find them not only through your personal contacts, but also in business directories and trade associations and shows. Don’t forget your existing customers, whether they are satisfied, dissatisfied, or dormant accounts.
If you’re seeking advisers, you might reach out to faculty or alumni from your alma mater. Was there a guest speaker in one of your classes that you especially admired, or a former boss or colleague in a relevant field? Reach out to them to see if they might provide counsel to you as you set up your venture.
You may have different criteria when searching for board members; for example, people who are well known in the community, such as former senior executives or members of the local chamber of commerce.
Chris Regan of RF Venue made an excellent point around who to engage, and when.
One thing I did this time around, prior to engaging dealers and prospecting early sales, we worked with an expert in this field, an expert with wireless audio. A guy who works on big Broadway productions and award shows and TV shows. We approached him early on and asked him to consult with us, test our products, and tell us how to finish development, and provide feedback, white papers, and support.
Regan goes on to explain how valuable this connection was, not just in terms of the work but also as a reference to their first customers.
It’s like you establish credibility for what you’re doing prior to the actual release of the product line. So when you release the product line, try to sell it—you don’t need six months of dealer testing. You get the influencers in your category involved as early as possible. I think the most important thing in sales, especially start-up sales, is credibility. How do you get as much credibility as you possibly can—whether it’s data from your product or testimonials or a third party? It’s a highly influential period in a company before anyone knows about you.
Qualify: Now that you have brainstormed your list of potential stakeholders, the next step involves trimming that list to a more realistic and manageable one. For example, is the prospect real and reachable? Is she or he worth approaching based on what they could bring to the table? Can I engage them in a serious conversation? Beyond that, will my product benefit them and are they able to pay for it? Might they have a budget for such services? If you are narrowing down your list of advisers or board members, you want to ask yourself whether that person has the relevant experience and reputation to bring significant value to your venture. When assessing investors, you want to examine the sort of investments they have made in the past.
For Mike Norwood of Type-U, focusing on the bottom line helps him narrow down his prospects.
You better really know that whoever is [supposed] to pay will. I think that’s the hardest thing to figure out because ... we were told very early on, “Oh, we’ll get the insurance company to pay and I’m like, Good luck.” Randomized clinical trials, 5,000 people, and then you get in line [waiting to be paid]. You could start an app tomorrow, but you’re going to get lost in an ocean of clutter … that’s something I would never encourage because unless it’s the latest, the greatest, and the next Instagram for healthcare, you have to really understand who’s going to pay and how you’re going to differentiate and all of that.
Tom Wiese of Wieselaw Contract Studio also employs an excellent strategy in this regard.
Probably the most powerful, or catalytic, [thing] I did was I started focusing on clients who had clients. Specifically, one of my first clients was Wells Fargo Bank—and they have hundreds of clients—so in getting them I got lots of other clients. So I call most clients gateways. I would do a deal and get known in an area where there was lots of volume. That has been a great strategy for me and it’s something I’ve always done.
This sentiment was echoed by Enrique Salcido of the event management company Groups2Go:
I turn to my customers’ recommendations very [often]. They have already worked with me, so when I [approach] a new customer I ask my first customers to call or somehow contact the new ones, or I mention them as references in my presentations, because … [these] details make us different from every other business of this kind.
Approach: The next step in the process is to get your idea or product before those in the position to purchase it. In order to do that, you need to be able to set up one-on-one conversations with those parties; however, it is much more complex than that. The key is to pitch a story that is compelling enough to generate interest for an in-depth follow-up meeting.
Making the appointment. When trying to get that face-to-face meeting, it is important to know who specifically you will be speaking to. Warm, as opposed to cold, calling is highly preferred. A warm call is one that leverages a contact you already know and who the target knows, respects, or admires. Whenever possible, reach out to people who know your target contact (directly or indirectly) and ask them to recommend you; you can then utilize this recommendation to get face time with your target. Invite them to lunch, dinner, or coffee and take care of the bill unless they insist on paying for it. Be likable, but respectful. Be confident, but never arrogant. Be passionate, but open to criticism and suggestions. “It was quite interesting trying to get people to become our customers,” said Okey Akpa of Avro Pharmaceutical, “We took out a few people to sound them out; trying to see if we could get a buy-in before we really get out. We wanted people with structure that could really pick these products and give it credibility in the channel.”
Know your audience. Every individual has a background and motivation that shape their preferences and actions; therefore, knowledge of the person you are meeting with could inform the customization of your story and help anticipate potential questions or objections in each meeting. Some of the critical stakeholders to consider include: individuals who are directly affected by the problems/issues your idea intends to address; the direct supervisors of those affected; the manager of the strategic business unit where the issue is being experienced; the custodian of the resources that could be utilized to address the issues (e.g., human resource and finance managers); the business owner or chief executive officer; and, last but certainly not least, gatekeepers who control access to the individuals mentioned. It is worth noting that the one person may wear different hats at different times, as this could save you time and money when pitching prospective buy-ins.
Tom Wiese had this to say on the topic:
My biggest surprise was how many people, including myself, don’t actually listen to what clients want. They sell what they have. It took me a long time—and I am embarrassed to say how long it took me—to figure out that I needed to sell clients what they wanted and try to listen versus trying to sell them what I had … and once you start listening to client, they tell you what they want; you don’t have to come up with it, you just have to listen.
Articulate your story. This is your value proposition, or “pitch.” You’ll need to write down and rehearse it over and over again until you are comfortable with it. Basically, why should others (i.e., your target) care about what you have to say? If you can’t answer this question in the first few seconds, you still have some tweaking to do.
Naturally, the tone of your pitch will depend on who you are speaking to. If you are speaking to a potential adviser or board member, it will focus on the value they will bring to you. For example, “Given your area of expertise and success at mentoring and shaping budding ideas, it will be a great honor to have an opportunity to receive your opinion and critique of my idea. You can help me avoid going on a wild goose chase.” If you are asking someone to join your board, you definitely want to name any other boards he or she has been on in the past and the benefits they brought to that company.
If, on the other hand, you are speaking to a potential prospect, you want to focus on the value you can bring to them, for example, “One of the major challenges facing companies like yours is__________. We believe you are a chat away from minimizing or eliminating this frustration. We’re not asking that you discontinue your existing relationships with vendors. All we’re seeking is an opportunity, no matter how small, to showcase our capability and offer you alternatives or fallback options. You never know until you try and there is nothing like direct validation.”
JB, the proprietor of P’Kolino, a toy design and manufacturing company in Miami, had excellent advice about creating a pitch around a particular audience.
First thing is that every business is different, so you have to look at your business and your customer and build that bridge between the two that is best going to suit that business and the communication platforms available. It’s totally different if you’re going to be selling to the government or selling to the consumer, or B2B or B2C. I have always believed there is no one answer, but that you have to look at it in multiple ways.
Some, like Darrell DeVeaux of HealthDetail, feel the pitch begins before you even go into that first meeting.
Try to position yourself as a subject matter expert in whatever the product or service or industry you are in, to give yourself some credibility; because … the only way you can have credibility is to have a lot of people look at size or past history … [but]you don’t have that. You can establish it with social media and blogs and things like that … or [even] the old school newsletter … or industry conferences. Once you have a little bit of credibility, it’s a little bit easier to get those first meetings and get in the door with some of those companies. I would definitely say this is important for a startup company.
Terchi Development Services’ Chinyelu Amangbo expressed a similar sentiment.
I think the first advice is to package yourself very well, in terms of what value you are going to add to that organization, and [do] very good research so that you are very specific. The other aspect is, what particular challenges is this company facing? If you know that then you can introduce your company from the perspective of “this is the value you are going to get.” So, for instance, if they are having challenges with their salespeople’s prospecting [ability]. They are spending too much time and energy on the wrong prospects. So you are going to introduce yourself as a company that is going to help the sales team enhance their performance by improving the quality of their prospecting. By this time it usually hits on some problem the person has been to trying to solve and then they are more likely to be able to talk to you and give you an audience.
When pitching potential team members or employees, it makes sense to combine acknowledgment of their talent/desires with the opportunities your venture can provide. For example, “Wouldn’t you rather be in the forefront of an organization, where you have opportunities to utilize and hone your abilities, than in the shadows making photocopies and coffee? In our growing company, every staff member holds the destiny of the company in their hands.”
Get past the gatekeepers. As mentioned before, one of the groups you must consider when trying to get face time with prospects is the “gatekeepers.” These are the administrative assistants, secretaries, or personal assistants to the individuals who determine whether a new product is acquired. Gatekeepers can be a valued ally for an entrepreneur, or they can present a major hurdle. They are privy to a lot of information and know who’s who in their organization. Furthermore, they are likely aware of other sellers calling on their organization, some of who might be the entrepreneur’s direct or indirect competitors.
Apart from treating them with respect, entrepreneurs need to creatively convince the gatekeeper to provide you with access to decision makers. In order to do this, you must present gatekeepers with a story that will make them want to link you with the person you’re interested in, or with someone in a similar position. Think of this as the pitch before the pitch; that said, you do not want to use the word “selling” when talking to gatekeepers, especially if they are secretaries or administrative assistants. Instead, explain to them that you’re seeking feedback on an idea that might interest x, y, and z. Be sure to articulate the reasons why the idea might interest them. Keep in mind that while their job is to insulate their bosses from unwanted distractions, secretaries and other gatekeepers do not want to be responsible for the company missing out on the next big idea.
Know your geography. Oftentimes your strategy will depend on where your target audience is based. In the United States, businesspeople tend to answer phone calls even when they do not recognize the number that appears on the caller id. However, this is not the case in Latin America and Africa. Since it is not prudent to leave a voicemail and hope that the target decides to call them back, entrepreneurs in those parts of the world have to reach out to third parties. This is the tactic Gerardo Cortina, founder of Marmoles Arca, a Mexican company dealing in marble flooring, used:
Once I’m aware of the owner of a construction firm, I asked people that I know, “Do you know this person or someone that knows someone that knows the person?” Then I said, “Can you please recommend me to him? … Please, could you speak to him on my behalf so that the next time I call s/he will pick the phone?” This approach worked for me most times.
Rafael Davila is another entrepreneur in Mexico whose company Meda Ratan specializes in the restoration of upholstered furniture. The first thing he did when beginning the engagement process was to identify the three biggest hotels in the region. He then chose one of the hotels and went to have lunch in one of its restaurants. While there he noted that much of their furniture was worn and faded. After lunch he approached the restaurant manager, explained why he was there, and asked to speak to the person who handled such matters. The restaurant manager in turn directed him to the hotel’s Maintenance Director. In that meeting, the entrepreneur pointed out his observations about the furniture’s condition, as well as the fact that it would be cheaper to refurbish it than replace it. He then offered to take a few pieces of furniture home and demonstrate how he could make them look like new for a fraction of the replacement cost. The Maintenance Director agreed, and this led to the entrepreneur’s first deal and series of service requests from all the major hotels in the region. If he had limited his efforts to phone calls, it would have taken much longer to get the opportunity, if he got it at all.
Choose your strategy. In addition to location, there are other factors that will influence how you engage prospects; for example, the amount of time and money you have to spend on the process. Your strategy will also be different when you’re targeting another business (B2B), as opposed to the end user or consumer (B2C).
Tom Alexander, a self-described “serial entrepreneur” and cofounder of the Ethernet company Optical Gigabite, hired a salesperson to search for Beta testing sites while he was developing a prototype.
I told [the salesperson] to call on many of the corporate companies in Silicon Valley … Sun Microsystems, Cisco, Hewlett Packard, and Intel. We got one customer, which was Sun Microsystems. We did a prototype, we gave it to the customer for testing and they were happy with it … they gave us [the first] purchase order.
While some give away prototypes, other entrepreneurs offer to demonstrate how their product works. The purpose of this demonstration is not only to get the prospects interested in starting a conversation, but also to obtain valuable information that enables the entrepreneur to reconfigure his or her value proposition, product position, and sales strategy. According to Click Catalysts USA founders Raul Pellerano and Mikaela Gillette, “the goal [of our demo] was not only to explain what we do, because we could explain that really quickly, but to extract information about their business and how we can actually help their business.”
For Glenn Kelley of Kelley & Co., that strategy depended largely on research.
One thing you really have to try to figure out is your point of differentiation. Agencies and marketing people do it all the time for their clients, but they don’t necessarily do it for themselves. So you don’t figure out a very clever way to position themselves against the competition and—why would somebody hire you? So again, our thinking was, we wanted to own a couple of industries so that we could say we know this industry better than Hill Holliday, we know this industry better than Arnold and Mullen. This is where we live. We spend time in the affluent wealthy premium consumer industry with all these brands I just mentioned. And people look at that and it’s got credibility … you want to be able to make a claim I think that is somewhat tangible and you can prove.
Be creative. When entrepreneurs are unable to get appointments to see prospects, they must find a way to make prospects come to them. Pride Inn is a niche hotel and conference facility founded by Hasnain Noorani in Kenya. When he opened its doors, Hasnain organized a couple of cocktail parties for every sector (e.g., Banking, Insurance, IT/IS, and Energy) every week for about three months. This strategy of mass yet focused prospecting led to several contracts that began with the first deal being inked the day after the first cocktail party:
I would call to find out who is in charge of accommodation and conferencing, then send those people invitations to a cocktail party. Along with the invite I included a gift voucher as an extra enticement. Amazingly, it worked—the turnout was great. Let’s say out of a hundred clients my turnout would be 85%. I included in the invitation cards the list of 15–18 foods that would be served: “Come and sample a wide variety of cuisines, and the drinks would be on the house as well.” They would have a look at the facility, and then they would come into the lunch area, the dining area, and that would generate into a small cocktail setting. I would give a small speech and tell them what Pride Inn was all about and I would also give away brochures with all the information in it. I hosted a total of about 25 cocktails.
Gerardo Cortina had a simpler yet profound approach when seeking prospects for Marmoles Arca. “I had a list, which I studied carefully. I went online and found out the biggest construction companies in Mexico. I then asked myself, Who are the owners of these companies? How and where can I possibly reach them?”
This deliberate, focused, and question-driven search led to the prospect that gave Marmoles the flooring contract for an entire terminal of one of Latin America’s largest airports, making the founder, at the age of 20, one of the youngest self-made millionaires in Mexico.
Many entrepreneurs include in their background research the length of their prospects’ buying cycle; this allows them to appropriately time their calls to get that first appointment or submit bids before the deadline. Take, for example, those whose products are seasonal; entrepreneurs may find it prudent to call a few months before the season begins.
That was the case of North Wind Energy (cofounded by John Grayson), a start-up specializing in energy-efficient heating/cooling systems:
We essentially performed market analysis to understand where all the options were for us … and we knew through a survey that we had done where all the old equipment was, so we were trying to target buildings constructed in 1995, ‘96, ‘97, and ‘98, as their cooling equipment would have reached the end of its useful life. [These buildings] would also likely be impacted by new Montreal protocols, which was basically phasing out CFC-based refrigerants. And so we’d go to somebody with … a two-to three-pronged sales pitch that covered both operations and finance. Essentially, we were saying, “We will continue to provide you with chilled water, but without any new capital outlay on your part.” Basically, we positioned the benefits in a different way, based on who we were talking to.
Convince: Now that you’ve laid the groundwork and made the initial approach, it is time to focus on turning your target into a committed customer, board member, adviser, employee, and so forth. This step encompasses managing conversations with the goal of learning more about the target’s motivation, pain, need, situation, and aspirations; positioning the idea/product with respect to the target’s objectives; handling his or her concerns and objections; gauging the level of interest; and even politely walking away if there is no basis for collaboration. This phase could be concluded in one or several meetings, depending on several factors such as the nature of the idea; the quality of the idea; the ability, experience, and passion of the entrepreneur; the fit between the idea and the need of the target; and the urgency of the need. For example, in business-to-business contexts, convincing requires that an entrepreneur understands prospects’ business models and can demonstrate how the novel idea could enhance prospects’ ability to deliver value to their customers. Entrepreneurs will need to convince multiple decision makers who might differ in their assessments of the idea’s potential value. The most important skills one can have for managing these types of conversations are questioning and listening skills. The outcome of the conversation is driven largely by the quality of the questions posed and the listening that feeds the insights thereof. The next chapter will focus specifically on the sort of questions you might ask a prospective client; following are suggestions for managing conversations with other critical stakeholders.
Advisers
Who do I need to talk to in order to improve my idea?
What red flag(s) do you see in my idea?
If you were in my shoes, what would make you drop this idea?
What else should I be looking into?
What other resources could I benefit from?
Board Members
What influences your decision to join a board?
You serve on many boards. What are the three top reasons people invite you to join their boards?
How can I make it worthwhile for you to be on my board?
Which is the most effective board you’ve served on and why?
Channels
What do you look for in a product?
What does an incoming product have to provide to gain “shelf space” from an incumbent (competing) product?
What endears your customers to your organization?
What would make my product ideal for your customers?
Existing Customers
Why do you currently do business with us?
What would make you consider leaving us?
What aspects of our relationship would you change?
If we did not exist, how would you address your needs?
Which of our competitors will likely eat our lunch and why?
What endears your customers to your product/service?
What change in your business model could likely make our product/service redundant?
Employees
What positive aspects of your current position will you have to give up if you join us?
If you could bring someone or something from your current employer, who or what would that be and why?
How does our culture differ from that of your current employer?
If you get this job, what would make you want to go back to your former employer?
Who are the two most productive people you’ve ever worked with and to what do you attribute their productivity?
Financial Institutions
What is unique about your support for growth-oriented businesses?
What difference(s) have you made in the life of the growthled businesses that you have partnered with?
What do you want to see in an SME before agreeing to explore potential relationships with them?
Beyond granting credit facilities, what support do you provide to SMEs?
Investors
What are your criteria for investing in a start-up or SMEs?
What is your exit strategy?
Beyond investing, what managerial insights and support do you provide to the companies you invest in?
What would you do differently if you were in my shoes?
Partners
What is your philosophy on collaboration?
What was your best collaborative experience and why was it outstanding?
How would you define leadership?
What is your view on conflict?
What strengths do you think best complement your strengths? Why?
What personality best complements yours? Why?
What characteristics would your ideal partner have? Why?
Suppliers
What are your payment terms and options?
What are your typical order quantities and are these related to your pricing structure?
What role do SMEs like mine play in your company’s mission and strategy?
What has been the most mutually beneficial relationship you have had with start-ups/SMEs? Why?
What characteristics would your ideal start-up/SME partner have? Why?
Talent
How would you describe your ideal working environment?
What courses have you gotten the best from? Why?
What do you envision yourself doing in your 30s?
From what type of student colleagues have you learned the most? Why?
From what type of teachers have you learned the most? Why?
Who have influenced your life and philosophy the most? Why?
Deliver: This is where the entrepreneur fulfills his or her part of the call to action emanating from the preceding conversations. This includes addressing requests made by prospects, delivering on promises made, completing paperwork related to the deal, and sending “thank you” notes. It is also a phase that can be leveraged to prospect for more business leads. Entrepreneurs need to assess various delivery modes that are consistent with the purchase behavior of prospects. This is important because different delivery options might require different selling strategy. One final component of delivery that is often forgotten is collection: the sales cannot be considered made until payment has been received.
Stay in touch: This phase consists of nurturing the relationships that have resulted thus far. When properly cultivated, these relationships become seedbeds for further collaborations. There is never a one-off transaction, even if the product in question is bought once in a lifetime. The purchaser of a product is connected to people who might have a need for the same product or a modified version of it. Thus, if the “one-time” buyer is unsatisfied with a product, she or he will not recommend it. More so in this age of social media, whereby positive and (especially) negative experiences are amplified and disseminated very quickly. It is in the interest of the entrepreneur to view every transaction as one having “longterm” consequences. This mindset facilitates cross-selling, deep-selling, and opportunities for new product development and lead generation. As Busola Oyebadejo of Power Engineering says, “Treat your customers like your friend. Customers are not your enemies, or people that just bought from you, no! After a while, you will find [them] on your list of friends.”