Last updated - February 21, 2024
Startup founders often wear multiple hats, and they are the ones in charge of the sales process. However, their efforts go beyond selling products or services to potential buyers. As a founder, you must also position your company in the market, attract investors, and build brand awareness.
This approach is a founder-led sales strategy. It works well because startup founders deeply understand the business, its mission, and the target audience. Plus, they believe in what they sell and would go the extra mile to turn their vision into reality.
A founder-led sales strategy can drive revenue and business growth when executed properly. At the same time, it promotes learning within the company, serving as a blueprint for operational success.
Let’s take a closer look at this approach to sales and why it’s important for B2B startups.
Founder-led Sales, a Cornerstone of Business Growth
Most startups operate on a tight budget and may hesitate to hire salespeople. Some only have two or three employees who do a little bit of everything, but they manage to make things work.
As a startup founder, you know your product inside out, so you’re in the best position to promote it to potential clients. Moreover, you’re passionate about your idea and have a clear vision of positioning your brand. Plus, you’ve done market research, identified a gap in the market, and created a product or service that could fill that gap.
In the early stages of a startup, it makes sense to take the matter into your own hands rather than rely on sales reps. After all, no one knows your product as well as you do. You also have the drive and motivation to push through any barriers you may encounter and reach your goals.
Given these aspects, it’s easy to understand why almost every startup goes through a period of founder-led sales. This phase may involve pitching to investors, setting up exploratory calls, researching your audience, and more. You’ll do these things yourself or alongside a small team as a startup CEO.
The Importance of Founder-led Sales for B2B Startups
When a startup founder is willing and able to lead by example by taking charge of the company’s sales directives, everything else tends to fall into place.
First, this approach allows you to understand your target audience and its pain points. As a result, you’ll be able to meet their needs and guide your team in the right direction.
Second, you’ll get to know the intricacies of the sales process, which can help you become a better leader. Plus, you’ll have a chance to research the market, create buyer personas, and adjust your marketing and sales strategies accordingly. Moreover, you can use this data to improve your business plan and set SMART goals.
Third, a founder-led sales strategy could be the key to startup success. According to Harvard Business Review, only one-third of startups deliver positive returns to investors. As the scientists note, many founders lose time and money simply because they fail to research customer needs.
On the same note, CB Insights reports nearly 40% of startups run out of cash, whereas 35% close their doors because there’s no market need for their products or services.
Founder-led sales can mitigate these risks, helping you keep your business on track. With this approach, founders can learn first-hand how to position and sell their products, talk to potential clients, and articulate their value proposition.
Why not Simply Hire Salespeople?
Edith Harbaugh, the co-founder and CEO of LaunchDarkly told Heavybit that many entrepreneurs prefer to hire salespeople before getting to know their audience and its needs. However, selling is part of your “job” as a founder.
It only makes sense to employ a sales team if you know who your customers are, what they expect, and what draws them to your brand. This step should be timely to help your business and your team.
Also, the best salespeople are unlikely to join a new company with no established process for attracting, retaining, and engaging customers, says Harbaugh.
If you reach out to independent sales reps, they might need help understanding your business or product and its intricacies. Another option is to hire an in-house sales team, but you can’t teach something you don’t know.
A founder-led sales strategy can lay the foundation for business growth. Selling by yourself will help you develop the skills needed to train others and build a winning team. Furthermore, it will set the tone for the company’s sales processes and allow you to create a customer-centric culture early on.
Still not convinced? Let’s see other potential benefits of founder-led sales:
- Validate your business or product idea
- Gain insight into how to present your business and services
- Get the chance to improve your products, which can lead to higher acquisition and retention rates
- Learn more about your customers’ needs and wants
- Experiment at a smaller scale instead of jumping all in
- Find, measure, and achieve product-market fit
- Build a sustainable sales process that aligns with your brand strategy
- Determine how and where to allocate resources
Many entrepreneurs want to create the perfect product but need to understand the bigger picture. When their products hit the market, it’s already too late to adjust to meet customers’ needs better.
With a founder-led sales strategy, you’ll be able to plan things out based on first-hand insights and mitigate risks.
For example, you could run a focus group, conduct interviews, and create surveys to learn more about your target audience. Another option is to launch a minimum viable product (MVP) to see how customers react. After that, you can tweak your offering, pricing, marketing strategy, and other aspects of the sales process.
There’s nothing wrong with hiring salespeople, but you must do it at the right time. Spending time and money training a sales team when your startup is new to the market is pointless.
Are there any Drawbacks to Founder-led Sales?
A founder-led sales strategy is crucial for early-stage B2B startups but has limitations.
First, most companies adopt this approach out of necessity, and their founders end up chasing revenue. When that happens, they have little time left for the core aspects of running a business, such as product development and value creation.
Second, you might educate or entertain your audience instead of selling.
Imagine the following scenario:
You meet with investors and potential clients, present your brand, and discuss your products. Everyone smiles and shakes your hand, but you have zero sales at the end of the day, leaving you wondering what went wrong.
Investors and potential buyers are naturally drawn to startup culture and like to keep informed on trends. Some are passionate about tech or feel inspired by new ideas. However, there’s no guarantee they’ll buy from you.
Another potential drawback is that founder-led sales can stall business growth. A startup—or any new business, for that matter—requires ongoing commitment from its founders. If you’re too focused on sales, you might miss out on growth opportunities or make mistakes that can affect the company’s bottom line.
Additionally, only some entrepreneurs are naturally good at sales. This business activity involves a learning curve, and by the time you get it right, you’ll likely mess things up in one way or another.
All in all, trying to do everything by yourself isn’t sustainable in the long run. That’s why it’s important to know when to stop and scale your business beyond founder-led sales.
How to Get Started with Founder-led Sales
Founder-led sales make sense for early-stage startups, but doing things right is crucial.
For example, Harbaugh says it’s essential to know who you’re selling to and walk away from bad prospects. If a customer says, “We don’t have the budget,” or something along those lines, it’s in your best interest to move on. Chances are, they either want to end the conversation or might be unable to afford your products.
To avoid this scenario, look up the company before you reach out. In this digital age, you can find anyone’s business email address and other relevant data, such as financial reports. By researching your prospects beforehand, you’ll be better able to identify high-converting leads.
What should you do next?
Set up Discovery Calls
Assuming you have already researched your target audience, go one step further and schedule discovery calls with prospective clients.
Discovery calls can allow you to wow your prospects and learn more about their needs. This strategy also allows you to address their pain points and set expectations immediately. Plus, it ensures you’re both on the same page, which can help prevent misunderstandings later on.
To get started, list questions that match the buyer’s journey. Then, be prepared to tweak your questions for different prospects at different sales funnel stages. Finally, consider asking open-ended questions to encourage a detailed response.
Let’s see a few examples:
- Can you tell me more about…?
- Can you walk me through…?
- What’s your perspective on…?
- How would you describe your biggest challenge?
According to a recent study, it’s best to ask anywhere between 11 and 14 questions addressing three to four business problems. Then, base your questions on the responses you get and work them into the conversation naturally.
Also, provide real-world examples of how your product has helped other clients with a similar profile. Better yet, set up a demo call for your next meeting. Then, briefly describe the next steps before hanging up and leaving room for further discussion.
Create an Onboarding Process
Acquiring new buyers is five times more expensive than keeping the ones you already have. Yet, only 18% of companies focus on customer retention.
Any business, big or small, can benefit from nurturing existing customers. Even a modest 5% increase in retention can boost profits by 25% to 95%. Additionally, loyal customers spend about one-third more than new buyers.
Customer onboarding is particularly important, as it can determine whether a client continues to use your product and services or leaves after a couple of weeks. If done right, this process can improve trial conversions, increase engagement, and drive repeat purchases.
The main goal of customer onboarding is to get new buyers accustomed to your product to leverage its full potential. This strategy will differ from one business to the next, but it usually includes the following steps:
- Sending out welcome emails
- Creating how-to videos, tutorials, webinars, and other learning resources
- Setting up an interactive walkthrough
- Defining customer-centric milestones
- Conducting regular check-ins with existing clients
- Delivering personalized experiences at every stage of the buyer’s journey
Great customer onboarding can prevent churn and pave the way to business growth. The above steps may seem overwhelming, but your efforts will pay off.
Leverage Automation to Streamline your Workflows
As discussed earlier, one of the biggest challenges of founder-led sales is finding the time you need to get things done. Running a startup is difficult enough, and managing the sales process yourself adds complexity.
One way to address this problem is to automate whatever you can. For example, you could set up an automated invoice approval workflow to free up your time and avoid payment delays.
Similarly, you can automate other accounting processes, marketing, and sales activities, customer service, and inventory management. If you’re ready to grow your team, look for HR tools that automate payroll, employee recruitment, onboarding, timekeeping, and benefits management.
Some aspects of the sales process can be automated, too. These include but are not limited to lead generation and scoring, sales reporting, forecasting, email marketing, and more.
Automation software is only the answer to some things, but it can streamline repetitive tasks and reduce human error. In the long run, it may decrease operational costs and give you more time to focus on the core aspects of your business. Plus, it can boost productivity and efficiency, increase customer satisfaction, and improve work quality, among other benefits.
Devise a Founder-led Sales Strategy that Drives Results
A founder-led sales strategy is about building a narrative around your brand and products early on. But, unlike a traditional sales strategy, it requires a DIY approach.
As a startup founder or CEO, you may not know much about sales, but you know your product better than anyone else. The key is to take one step at a time, try different strategies, and adjust your sales process. Keep an open mind, take calculated risks, and focus on prospects most likely to buy.
Lastly, automate repetitive or time-consuming tasks, such as prospecting, lead enrichment, reporting, and customer service. This approach will streamline workflows, help you prevent burnout, and increase efficiency.
