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Our strategy was to not try and find a shortcut or hack to grow our sales. We just ground it out by cold calling/cold emailing, paid ads, etc. The problem with

Our strategy was to not try and find a shortcut or hack to grow our sales. We just ground it out by cold calling/cold emailing, paid ads, etc. The problem with shortcuts is they are usually not repeatable or scalable. For example, a viral video or website can provide a boost of growth, but you can't predict if the next thing you produce will also go viral. What you want to find is a predictable way to generate sales where the economics work. The economics work if the cost to generate a sale is 1/3 or less of the lifetime value of the customer. Even if it takes a lot of effort to generate the sale, if you have a predictable way to generate leads, and you know how many leads you need in order to produce a sale, and you make a good profit on that sale, you are golden. You can then ramp up your lead gen and you know your sales with grow faster. It doesn't take any luck to display more ads, send more emails or hire sales reps. This is the strategy we used to grow from $0 to $1M in ARR in six months. We could then go to a VC and tell them that if they invested $X, we could turn that into $Y in ARR. It made fundraising pretty simple for us. tl;dr Treat sales and marketing like a science and design a repeatable process.

brilliantcode 10y ago
holy shit this is by far the most valuable comment I came across of all time on HN
- tucaz 10y ago
  Also what all small companies should do before raising money to "accelerate growth". Lots of them just burn through other people's money without knowing what to do.
- exolymph 10y ago
  Allow me to make your day: https://news.ycombinator.com/threads?id=patio11 https://news.ycombinator.com/threads?id=patio11
devopsproject 10y ago
No, cold calls are something my father did. I am a Growth Hacking Ninja Rockstar.
cynusx 10y ago
did you guys use experienced sales people?
- rsweeney21 10y ago
  Prior to product market fit, the founders need to be selling. Once you have product market fit, you need people who already know how to sell your type of product into your target market. That was a mistake that we made. We started by hiring smart people and trying to let them figure out how to sell. I strongly recommend NOT doing that. In startupland, time is your greatest enemy and you don't have time for people to learn. Also, you probably aren't a sales expert, so you can't teach them what they need to know to be great. Another mistake we made was hiring people who were good at selling other things. Medical device sales, consumer product sales, SaaS sales to SMB, SaaS sales to enterprise, etc. Once again, great sales people in other types of sales can learn to sell into your market, but it can take a long time and you probably don't have the expertise to teach them. We spent 12 months trying to use smart people with no experience and sales people that were great at selling into different markets and generated essentially $0 in sales. We were ready to give up. Finally we hired a senior sales person from a competitor that was selling a very similar product, into the same market (med-large business) and we've taken off since then.
  - contingencies 10y ago
    Interesting. Can I ask was it familiarity with segment-appropriate marketing channels, segment trends, consumer terminology, competitor product weaknesses and pricing structures, something else, or some combination of the above?
    - rsweeney21 10y ago
      Right before we found success, we had hired an enterprise account executive and an enterprise SDR. They were doing what they knew how to do: building long term relationships. The problem is that in the medium and large business space, they don't care about relationships. Once we had someone who knew how to sell SaaS to medium and large businesses, we just started doing what they considered obvious and fundamental. It was a revelation to us. :) We started using software to send emails, track opens and clicks and then call prospects that did any of those things. You have to do a lot of dials, but eventually, someone answers. Of course they're not interested, so back to dialing. After 30 answers you'll get one that is interested. Sales is just a numbers game. It's hard work. It's hella hard work. But send enough emails and make enough calls and you'll make some sales. And there is nothing like the feeling of closing a sale after grinding it out. Over time the sales add up, and before you know it, you are having a party with silly string and noise makers because you passed $1M in sales! (That was a fun day!!!)
contingencies 10y ago
What you want to find is a predictable way to generate sales where the economics work. 1000x this. Test on a per-channel basis, ie. marketing spend per customer acquisition, immediate customer value, (conservative) value over customer lifetime. Frankly anything but the initial sale is largely bullshit, but investors love it if you can show nice numbers here. At my first startup (China-wide multilingual hotel reservation platform) I had an angel work through this with me and come to the same conclusion I did: we'd tried pretty much everything, so customer acquisition was either going to be very slow organic or expensive and cashflow negative / capital intensive, save some kind of channel partnership deal.
palidanx 10y ago
I'd also recommend reading Aaron Ross's updated book https://www.amazon.com/Impossible-Inevitable-Hyper-Growth-Companies-Predictable/dp/1119166713 https://www.amazon.com/Impossible-Inevitable-Hyper-Growth-Co... for software engineer's approaching marketing for the first time.
xiaoma 10y ago
Congrats! It sounds like you found the right channels for your business (at least for a while). Direct sales and paid ads are both solid channels. Others that I've seen work are SEO, Content Marketing, Social Media Marketing, Partnerships, API Integrations, Meetups, Conferences, Engineering as Marketing, Viral Design, Affiliates, PR, Newsjacking, Branson-style Stunts, User Incentives (like Paypal giving people $20 for signing up), etc... What works depends a lot on what your price points are, what your competition is doing and your stage of growth. The worst thing is when a startup's ideal channel—and it usually is just one or maybe two channels that will work really well—happens to be one that the founders dismiss without even realizing it. In fact, a lot of technical founders would dismiss the exact kind of direct sales that worked so well for you.

brilliantcode 10y ago

holy shit this is by far the most valuable comment I came across of all time on HN

tucaz 10y ago
Also what all small companies should do before raising money to "accelerate growth". Lots of them just burn through other people's money without knowing what to do.
exolymph 10y ago
Allow me to make your day: https://news.ycombinator.com/threads?id=patio11 https://news.ycombinator.com/threads?id=patio11

devopsproject 10y ago

No, cold calls are something my father did. I am a Growth Hacking Ninja Rockstar.

cynusx 10y ago

did you guys use experienced sales people?

rsweeney21 10y ago
Prior to product market fit, the founders need to be selling. Once you have product market fit, you need people who already know how to sell your type of product into your target market. That was a mistake that we made. We started by hiring smart people and trying to let them figure out how to sell. I strongly recommend NOT doing that. In startupland, time is your greatest enemy and you don't have time for people to learn. Also, you probably aren't a sales expert, so you can't teach them what they need to know to be great. Another mistake we made was hiring people who were good at selling other things. Medical device sales, consumer product sales, SaaS sales to SMB, SaaS sales to enterprise, etc. Once again, great sales people in other types of sales can learn to sell into your market, but it can take a long time and you probably don't have the expertise to teach them. We spent 12 months trying to use smart people with no experience and sales people that were great at selling into different markets and generated essentially $0 in sales. We were ready to give up. Finally we hired a senior sales person from a competitor that was selling a very similar product, into the same market (med-large business) and we've taken off since then.
- contingencies 10y ago
  Interesting. Can I ask was it familiarity with segment-appropriate marketing channels, segment trends, consumer terminology, competitor product weaknesses and pricing structures, something else, or some combination of the above?
  - rsweeney21 10y ago
    Right before we found success, we had hired an enterprise account executive and an enterprise SDR. They were doing what they knew how to do: building long term relationships. The problem is that in the medium and large business space, they don't care about relationships. Once we had someone who knew how to sell SaaS to medium and large businesses, we just started doing what they considered obvious and fundamental. It was a revelation to us. :) We started using software to send emails, track opens and clicks and then call prospects that did any of those things. You have to do a lot of dials, but eventually, someone answers. Of course they're not interested, so back to dialing. After 30 answers you'll get one that is interested. Sales is just a numbers game. It's hard work. It's hella hard work. But send enough emails and make enough calls and you'll make some sales. And there is nothing like the feeling of closing a sale after grinding it out. Over time the sales add up, and before you know it, you are having a party with silly string and noise makers because you passed $1M in sales! (That was a fun day!!!)

contingencies 10y ago

What you want to find is a predictable way to generate sales where the economics work. 1000x this. Test on a per-channel basis, ie. marketing spend per customer acquisition, immediate customer value, (conservative) value over customer lifetime. Frankly anything but the initial sale is largely bullshit, but investors love it if you can show nice numbers here. At my first startup (China-wide multilingual hotel reservation platform) I had an angel work through this with me and come to the same conclusion I did: we'd tried pretty much everything, so customer acquisition was either going to be very slow organic or expensive and cashflow negative / capital intensive, save some kind of channel partnership deal.

palidanx 10y ago

I'd also recommend reading Aaron Ross's updated book https://www.amazon.com/Impossible-Inevitable-Hyper-Growth-Companies-Predictable/dp/1119166713 https://www.amazon.com/Impossible-Inevitable-Hyper-Growth-Co... for software engineer's approaching marketing for the first time.

xiaoma 10y ago

Congrats! It sounds like you found the right channels for your business (at least for a while). Direct sales and paid ads are both solid channels. Others that I've seen work are SEO, Content Marketing, Social Media Marketing, Partnerships, API Integrations, Meetups, Conferences, Engineering as Marketing, Viral Design, Affiliates, PR, Newsjacking, Branson-style Stunts, User Incentives (like Paypal giving people $20 for signing up), etc... What works depends a lot on what your price points are, what your competition is doing and your stage of growth. The worst thing is when a startup's ideal channel—and it usually is just one or maybe two channels that will work really well—happens to be one that the founders dismiss without even realizing it. In fact, a lot of technical founders would dismiss the exact kind of direct sales that worked so well for you.