john gibbon
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Product First Sales Strategy

7/24/2016

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(and a few other not-so-novel observations about the SaaS sales process)    

     A few weeks ago I was having dinner with a new friend, Bern Shen, who had just become the CEO of Dharma Platform.  After having this discussion and running into a few related blog posts, a few observations came to mind:

First Hire an SE    
     Sometimes a start-up's first "sales" hire should be a pre/post sales engineer who can both communicate the product's value to prospects  (often sourced and closed by an early stage company's CEO) and help make sure early customers are wildly successful.


Early Customer Success = Early Company Valuation
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​As Tom Tunguz shows, early customer success (or account expansion, i.e., lack of early customer churn) is the biggest factor in the valuation of Series A SaaS companies. http://tomtunguz.com/leading-predictor-saas-series-a-valuation/

PQL > MQL (sometimes)
     Tom Wentworth recently described how much more powerful a Product Qualified Lead (PQL) is than a Marketing Qualified Lead (MQL).  For the right product, users can qualify themselves by using the free or open source version of a product; and then inside sales can help try to convert them to a paying customer.   https://tomwentworth.com/why-im-killing-the-marketing-qualified-lead-95c90874bc6f
     Personally I think that this only works if the "time to value" of the try-before-you-buy version of your products can be short. Your product needs to be dead simple to configure - a great goal but not always possible with enterprise SaaS.  Often customers are better served by being educated via other marketing methods - maybe even product focused ones such as product demo videos, sales engineers configuring and demo'ing the product, and detailed testimonials from current users. 

Drive Towards Low-Touch/No-Touch Sales
(Lower ASP = Shorter, Virtual Sales Cycles)
(1 Touch = Unprofitable Customer)
     This may be the most obvious observation.  One of the biggest challenges for the new generation of enterprise SaaS companies with lower-cost point solutions is how and when a sales representative should engage with a prospect.  
     I have heard CEOs talk about a one-touch or zero-touch sales models.   Specifically when I talked to Oversight systems CEO Patrick Taylor about a low-touch model he said "You don't need an in-person salesperson to make the service real, trials do that"  https://twitter.com/johngibbon/status/675704863913717765      
     Other CEOs who have products with very low price points say that "as soon as you pick up the phone (for sales or support) that customer is no longer profitable."  When I was on the board of one company we tried to keep the CaC (customer acquisition cost) as low as possible in part by making all sales interactions virtual and usually programmatic. This was done to keep our CaC low since our ASP (average selling price) was relatively low for enterprise SaaS standards.  We obviously broke this rule if the potential deal size was very large. 

Add an SDR
     On a related note, Matt Bertuzzi recently came to the conclusion that an average SDR (sales development representative) will make an AE (account executives) more productive if the ASP of a product is higher than $8k.  http://blog.bridgegroupinc.com/whats-the-minimum-asp-where-sales-development-makes-sense
     Certainly you don't want to extend the sales cycle of a low ASP product by introducing two people interacting with the customer.  However I wouldn't read this as not introducing virtual sales team members in lower ASP products, it is most likely reflecting that during the sales process for these lower ASP products Account Executives (AEs) are more virtual like traditional SDRs.


Mind the Gap (or gaps in the funnel)
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     As leads migrate through your marketing funnel, where is the largest drop-off (or largest drop-off compared to industry standards)? How can you optimize your sales by understanding where leads fall out of the funnel? Where should you increase (or decrease) your resources throughout the marketing and sales funnel?  
     Of course there are many ways to improve conversions through the funnel; however the most important to consider in a product focused sales strategy is to make sure your product is successfully solving an important problem for your customer.
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Three Mistakes to Avoid When Networking from the HBR and Two Other Suggestions

8/4/2014

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 Networking? 
          My current favorite blog post on networking (in the Harvard Business Review) says:
                 -Don't misunderstand the peeking order
                 -Don't ask to receive before you give
                 -Don't fail to state your value proposition

     I would add:
      -They have the power, they have the job; what can I give?
          -Provide Information.  You have done some research and you have been talking to people in this field.  Everyone is trying to stay current, but no feels like they are completely up-to-date. (" ... I've been talking to execs in your market..."   "....Recently I read...")
           -Listen to their story.  Everyone has one and most people want to tell it.  Often the best favor you can provide someone is asking a few leading questions and letting them tell their story. ("... Wow, that must have been an interesting few years at ...").


     -Why are they doing this?  (Make it easy for them to help you.)
          People take networking meetings or calls often because they want to feel like they are being a good person and helping others (and so that you can maybe help them later).  So make it easy for them to help you.
          -Ask for their advice. Reiterate it back to them in your thank you note and in the note you send them after you land a new job (in which you thank them again). This reinforces that they were helpful.
          -Ask for a few (just a few) introductions.  Crosscheck your target list with their LinkedIn contacts. (Use this list of company lists to create your target list.)  LinkedIn makes this easy by providing a search box on the top of a person's contact list.  (In that search box just type "Company A OR Company B OR Company C".)
         
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Travel Technology Resources

3/25/2014

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As I learn more about the travel technology business; I have found a few sources particularly helpful: 

     skift.com  @skift

     tnooz.com  @tnooz

     gbta.org @GlobalBTA 

     thebeat.travel   @TheBeat_travel

     phocuswright.com @PhoCusWright 

     The last two are paid content.  
     And of course: 

     tripit.com/blog/ @TripIt

     concur.com/blog @Concur


(Thanks to @dmhoffer and http://www.tripit.com/blog/2014/01/15-must-read-travel-blogs-for-2014.html)

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Slides from "Decisions You Must Make to Grow" Your SaaS Product Business" (Presented at Dreamforce '13 Founders Forum)

11/21/2013

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Growing Your SaaS Product Business from John Gibbon
Growing your SaaS Product Business (with speaker notes) from John Gibbon
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Cloud Business Fundamentals: 5 Rules To Live By (Decisions You Must Make to Grow Your SaaS Product Business)

11/1/2013

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Presenting at Dreamforce '13 as part of Founders Forum 

A hands-on session around company and product strategy which will help you make decisions on how to grow your SaaS product business, including how to:

-Measure growth and define success
-Identify common roadblocks to company growth
-Determine where to focus your efforts 
-Refine company & product portfolio strategy and trade-offs
-Assess different potential opportunities    


Thursday, 11/21/2013 10:00 AM
p.force.com/foundersforum
Click here to learn more about my session in the Dreamforce app


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So You Want to Grow Your SaaS Product Line       (Product Management / Product Strategy Notes)

10/12/2013

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Talking Product Strategy at Apttus Accelerate

9/9/2013

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Answering Questions CIOs Ask About Cloud / SaaS

7/11/2013

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Presenting at SydStart, CeBIT, and Salesforce CCT

5/28/2013

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Presenting "Enterprise Application Opportunity" at Sydney Startup @ CeBIT 2013 Also presented "AppExchange" at Salesforce CCT (Customer Company Tour) 2013
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Presenting "Enterprise Opportunity" at SydStart 2013 with Peter Lee (sydstart.com). Also gave similar presentation at Salesforce Partner Academy at Sydney 2013 CCT
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THE Questions for a Product Management Team

6/22/2012

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Recently a CEO suggested I consider doing some short term consulting work for his company.  He wanted to know what questions I would ask to figure out how I could help his product management / products team.

This is what I came up with (what do you think?):

-How do you balance short term improvements with long term innovation and new revenue opportunities?

-How do you make product decisions using different market, portfolio, and client analysis techniques?

-What are the components (including success metrics) you include in a business case or MRD for different situations?

-Which among the many different PRD or requirement documentation options do you use?

-How do you change the organization of a team and its processes based on the stage and size of the product line and the company? (i.e. How agile should you be?)

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    The postings on this site are my own and don’t necessarily represent my company's positions, strategies, or opinions