My very first significant sale came over a decade ago, when I sold equity to investors in my first company. Armed with a pitch deck, I reached out to dozens of potential investors to present my startup. They’d listen to my presentations carefully and ask thoughtful and challenging questions.
After a lot (and I mean a lot) of pitches, one investor finally said yes. And then another. I left fundraising with a renewed sense of confidence. I felt like I’d cracked a secret sales code.
If I could sell what was essentially a plan with a million-dollar price tag to investors, then I could sell anything!
I approached selling my product to companies in the same way as I pitched to investors. After getting the warm intro, I’d show up and excitedly pitch my product, answering questions with conviction. The excitement was infectious and meetings usually ended on a high.
But despite all the excitement generated in the meetings, it didn’t convert into sales. I was at a loss.
To learn how to sell more effectively, I started taking as many sales courses as I could. I quickly realised that pitching investors and selling software to companies are different in some very important ways.
Venture capitalists are already sold on the idea of investing in early-stage startups, so traditional investment pitches are set up to focus on the product, the business, and the founder. The founder speaks most of the time—in fact, it can be hard to get a word in edgeways.
However, in an effective sales meeting, the focus should be squarely on the prospect, their role, and their specific needs. This difference has big implications for the way you run meetings and the structure of your sales deck, so let’s go through the key changes for each.
In Chris Croft’s course on Practical Sales Techniques, he describes an ‘old process of selling’ as having four stages: contact, qualify, present, and close. As conveyed in the image below, most of the time is spent presenting and closing. I instantly realised he was describing the way most founders pitch investors.
Chris then introduces a ‘new process of selling’ in which far more time is dedicated to building a relationship with the prospect and identifying their needs. Here’s a quick summary of each step in the ‘new’ process.
From experience, I’ve realised that pitch meetings with venture capitalists tend to have a ‘let’s get straight to it’ approach. Because of this, it’s easy to overlook the fact that if someone likes and trusts you, they're more likely to buy from you.
There are many ways to make a positive impression, so it’s important to find out what works for you. Classic advice is to ‘use their first name’, ‘go in with compliments’, and ‘give away a present, like a book, in the first meeting’.
However, the approach that I use is to take a genuine interest in them and their business. Most people love to talk about themselves, so a surprisingly effective approach is simply to start a conversation with an open question:
Actively listening and encouraging them to continue will help them feel interesting and heard. And who doesn’t like that?
This step is often missing entirely from investor meetings and instead, the founder will quickly launch straight into the product. But to win at sales, this is a habit you’ll need to break.
Ask the prospect questions to identify their specific pain points:
Your mission is to get them to say, ’Actually, I really need to do something about this.’ It’s worth noting that many of these questions are similar to the ones you would use in a customer development interview, or even in a coaching session.
Now you understand the specific pain points of your prospect, you can ‘prescribe’ your product, just like a doctor would prescribe medicine. This is powerful because you can focus on the features and benefits that really matter to the prospect.
The following formula works well:
[Product name] has [feature] which means [benefit to prospect]
Naming the feature makes the benefit credible—and it’s the benefits that prospects really care about. After you describe each benefit, check-in to see if it resonates:
This allows you to validate assumptions and figure out ‘where to push’.
How should you react when your prospect voices concerns about your product? Here are a few ways you can handle objections:
a) Peel the onion. Rather than take the objection at face value, probe a little deeper. You may find that the first objection (often the price, or a feature request) isn’t the real objection. Ask questions such as:
b) Quantify the opportunity. Price is the most common objection and you’ll need to peel the onion when it comes up. However, you can also ask questions to help customers evaluate price versus benefit:
c) Feel, felt, found. Showing that you hear people is a powerful way for you yourself to be heard. The following format might prove useful:
Listening to your prospect’s needs and objections will give you a sense of whether your product will help them or not. If it will, it’s helpful to have a few closing comments, to guide questions over the line:
It’s wise to keep the ball in your court after the meeting. Rather than let the prospect follow up with you, ask when would be the best time for you to follow up with them. Sales can take longer to close than an investment round, so you need to be proactive about keeping the relationship warm.
To help you focus the meeting on your prospects, you’ll need to adapt the structure of your sales presentation. Standard investor pitches lead with the problem your product solves, but this isn’t always best when speaking with companies.
In his essay, ‘The Greatest Sales Deck I’ve Ever Seen’, Andy Raskin notes:
When you assert that your prospects have a problem, you put them on the defensive. They may be unaware of the problem, or uncomfortable admitting they suffer from it.
Raskin recommends using a ‘strategic narrative’ and framing your product around an important and undeniable trend. Here are the five components of a strategic narrative:
The most convincing visions are extrapolations of trends that are already happening. When highlighting a shift in the world, ask questions that get prospects to explain how the shift affects them, how it scares them, and where they see opportunities. For example, Zuora (the company described in Raskin’s essay) starts their pitch with the trend towards subscription products.
Everyone wants to stay ahead of the next trend. Emphasise the stakes involved by showing how failing to adapt to the change is already causing significant problems for other companies—and how the winning companies find a way to adapt. Zuora points out that Blockbuster died, while Netflix thrived.
As tempting as it is to jump to the product itself, it’s worth spending more time elaborating on the opportunity. What does winning actually look like? Using specific criteria can help prospects visualise what it could be like for them. This gives you an opportunity to identify specific needs.
What are the obstacles that stop your prospect from reaching the promised land? As you uncover them, you can prescribe the features that help prospects move forward. But features are not the only thing holding prospects back. ‘Limiting beliefs’, such as ‘I don’t believe I can really pull this off’, will also stop clients from acting. When you identify a limiting belief, hold it up to scrutiny and replace it with a new, more empowering one.
This is where social proof and traction are needed, to reassure prospects that they can trust you. Existing customers, investors, and data are useful here, to show that you mean business.
When pitching to investors, you can get away with using the same pitch deck for most of them, improving it along the way. But selling to a company may involve multiple stakeholders with different roles in the business—for example, IT, HR, finance, marketing, etc. Each may require a different approach to help them understand the value proposition as it relates to them.
Learning to sell is an incredibly valuable skill that applies far beyond product sales. Partnerships, recruiting, and yes, even raising funds, will become easier when you understand some basic sales principles—namely, it’s about them, not you.
If you’re having trouble selling into companies, here are some additional resources to consider:
The opportunity to sell software into businesses is real, but it’s becoming increasingly competitive. Your ability to build relationships, and to understand the needs of your customers, might just be what sets you apart.
Thoughtful essays on growing teams, building products and raising money by Serial Entrepreneur and Investor, David Bailey.