Month: February 2020

As Mark Cuban says – the market size is almost immaterial

As Mark Cuban says – the market size is almost immaterial

This post originally appeared on the blog series “Skinned knees—what an MBA didn’t teach you for rebel sales in a software startup” on the Agile Stack website.

The next in our series “Skinned knees—what an MBA didn’t teach you for rebel sales in a software startup” where we discuss ignoring market share and simply focus on selling and your customers.

Do you watch Shark Tank? If you are in sales at a startup, there is probably no other television show that is as relevant to your life as Shark Tank.

Shark Tank is the television equivalent of a VC conference. Entrepreneurs pitch their ideas to five extremely wealthy people and try to get them to invest. In a startup, if you are not personally responsible for talking to investors, your manager probably is doing it.

My company, Agile Stacks, where I am the Chief Revenue Officer, will never go on Shark Tank. Not because we don’t want the attention of these well-connected investors, but because we are already too well-funded and too large to consider them taking a substantial portion of our company which they prefer to control.

There is one consistent sign that the entrepreneur is going to be rejected by the Shark Tank panelists. It is when the founder starts to talk about how massive the market is for their product. Mark Cuban is usually the first to pounce on this aggressively, and often it is his reason for not funding the startup.

If you are brand new and haven’t sold a single product, then regardless of your targeted market, your market share is 0.00000000% (take that out to an infinite number of decimal places). As soon as you start to sell, the number of decimal places gets fewer, but through most of the time as a startup, you still have well under 1% of your market. You can have an incredibly successful startup and have a meager market share.

Almost every day, the companies Uber and Lyft are in the business pages. They are the big guys in the peer-to-peer ridesharing market. But they are incredibly small in the drive-to-some-destination market (which is dominated by people that get behind the wheel and drive to a destination). On most American streets and highways, not 1 vehicle in 100 on the road is a rideshare car (obviously this varies by city).

Until Uber convinced their first customer to get into a car with a stranger, the peer-to-peer ridesharing market was tiny. It didn’t matter though. What mattered was that the founders thought they could build a company by making it easy, convenient, and affordable to get paid for driving people around in something other than a taxi. They built a product that they thought people wanted, and then they went out and convinced people to try it.

Market share simply doesn’t matter. What matters is getting those first customer purchases and making that customer happy with your service and product. Then get the next purchase (and the next, and the next….). It is only customer purchases that matter and the satisfaction of your customers with your product. 2020 for Agile Stacks is all about traction, I’ve come aboard and inherited a sales team. We rarely discuss market size on my weekly pipeline calls. My drive is to focus the team on working the deal to close. That is what’s important to my leadership and my Board.

Nothing else matters. Just go sell something.

Header photo is courtesy ABC.
Selling without being sold

Selling without being sold

There is an old saying that everyone sells. I believe in this saying. As I explain in my book, Eliminate Your Competition, selling is nothing more than helping someone make a decision that is favorable to you.

My life is business-to-business (B2B) sales. My book is designed for those sales situations and most of the advice on this site is geared toward that audience. However, I am frequently most impressed and most unimpressed with a particular type of business-to-consumer (B2C) salesperson: the waiter/waitress at a mid-high level restaurant.

Did s/he make a special drink for you? Accommodate you with a different type of water? Offer suggestions on pairings of wine with your plate? Suggest a particular dish based on feedback from other customers or even personal tastings or observations of the raw food that arrived earlier that day? Perhaps, encouraged you to try today’s chef special (which almost always has a slightly higher margin for the restaurant)? And of course, checked back 2 or 3 times to make sure that food was prepared to your liking and offering a further refreshment from the bar?

When we go to a restaurant, we expect the food to be exactly correct. There are too many choices in any mid-size or above metropolitan area if the food isn’t excellent. However, my favorite restaurants are where the servers are amazing.

I live in Cincinnati. My favorite restaurant in town (where my wife and I will celebrate her birthday in a few weeks) is where we ask in the reservation to be seated in David’s area. There dozens of fine restaurants in downtown Cincinnati but David’s restaurant is where we go on special occasions, and it is primarily because of David.

David has been our server for over 5 years. We know that his service and recommendations will be fantastic. My wife will likely order one of her two favorite dishes that the chef prepares to a standard that is probably unmatched in downtown Cincinnati, but I will experiment. David will guide the choices of my appetizer, entree, and dessert.

David is our Trusted Adviser at this restaurant, and he fulfills that role splendidly. He will recommend a couple of wines based on his knowledge of our tastes and our dishes and perhaps steer us to wine by the glass if our meals are not complimentary (driving up the profitability of the restaurant). This is the role of a salesperson. Better service, customization, and higher customer satisfaction at a higher profit. I know that I will spend more money with David than another server, but I also know that my wife’s birthday will be even more special.

Salespeople excel when the quality control of the product that we sell is fantastic. This means we don’t need to cover for an overdone or under-seasoned dish (or outside of the restaurant world – a product or service that was not made to par). We can focus on other high-value activities that add continued relationship value to our customers.

However, working at a business with excellent quality control is only part of the reason for the success of a salesperson. What did you do to offer extra value to your customers? Are you part of the success of that restaurant in the eyes of the customer?

In my book and on these pages, I frequently say that there are three items that each salesperson sells:

  • your product
  • your company
  • yourself

If any single one of these three things is missing, then you risk winning the deal. In the case of David and his restaurant owner, you risk that we will go to another fine Cincinnati restaurant on the next special occasion.

You may purchase my book, Eliminate Your Competition, from your favorite book retailer. The ebook version is available at the most popular retailers such as Apple, Amazon, Barnes & Noble. The paperback version is also widely available at such retailers as Amazon, Barnes & Noble, and Books A Million.

Header Photo waiter by zoetnet