Sales Strategy...Solutions v. Products

I see a lot of startups and more seasoned companies that are trying to cold sell their product. Cold selling a product is hard.

What I mean by cold selling is that they have a product (could be a service too) they like/love and they think just about everyone else will too, if they knew about it. This attitude is often characterized by statements like:

- "Everyone is a potential customer"
- "Sales are not a problem if I just had some more money"
- "I'm not worried about sales"

****Newsflash - Everyone should be worried about sales...it is the lifeblood of the company****

And there is help available.

Sales are indeed a process. In fact there are any number of websites that will be happy to show them to you. One simple flowchart is from www.better-sales-and-selling.com :



This type of chart is a good start toward a real sales strategy because it is simple enough to be flexible for a variety of companies, but segmented enough to build a legitimate strategy outline.

Each step in the process should have a defined solution and in really great sales organizations there are numerous solutions to each step.

Nonetheless, the heart of the process will almost always be the solution. The solution has to have a compelling value proposition to the customer, or inertia and the noise of life/business will makes sales much more difficult. If a company has a solution with a compelling value proposition then most of the remaining process is simply communication.

To validate or formulate a value proposition is critical and there are also any number of websites that will talk about that process as well. Blue Ocean Strategy is probably my favorite, but the simplest one is something I have heard many times around the house:

1. The easiest thing to sell is something that "makes" money,
2. the next easiest thing to sell is something that "saves" money, and
3. the hardest thing to sell is something that "cost" money.

Whatever they choose to use, if a company wants to have better sales, they probably need to look at their overall sales strategy because it can (and usually will) drive the success of a company.

Is a Company ready to think about outside investment....?

"Sequence of Blue Ocean Strategy" is pretty much a summary of the initial evaluation of an angel deal... www.blueoceanstrategy.com/abo/sequence.html

1. Product/Service has Significant Value/Utility to the User
2. Compelling Price
3. Appropriate Cost of Production (i.e. good margins at the compelling price)
4. Reasonable Adoption Plan

At least self certifying (if not certification by a relevant 3rd party) that a deal passes well through this evaluation should probably be a requirement for beginning any fundraising effort.

Recap - Birmingham Angel Network meeting last night

We had a smaller (typical for summer) but very engaged crowd last night to hear our two presenters, Transaction Tree and YouthMinistry 360.

Jason Shapiro with Transaction Tree engaged the crowd with a lively discussion on POS systems, e-receipts and the direction of commerce in the digital age. Les Bradford and Andy Blanks of YouthMinistry 360 then gave an inspiring discussion about youth ministry and working with teens and those supporting them.

All in all it was a fun night and a good time was had by everyone. For those that couldn't make it we would love to see you at the next BAN event and we certainly expect to hear more from our presenters as they grow into the future.

www.birminghamangels.com

Birmingham Angel Network meeting next Thursday night (6-8pm).

Birmingham Angel Network meeting next Thursday night (6-8pm) at Innovation Depot.

We will be having a couple of company presentations and it should be a typical slower and more relaxed summertime meeting, so a great time to bring a guest.

www.birminghamangels.com

See you there.

Estate tax remains unresolved

It has come to this: Congress, quite by accident, is incentivizing death.

When the Senate allowed the estate tax to lapse at the end of last year, it encouraged wealthy people near death's door to stay alive until Jan. 1 so they could spare their heirs a 45% tax hit.

Now the situation has reversed: If Congress doesn't change the law soon—and many experts think it won't—the estate tax will come roaring back in 2011.

Not only will the top rate jump to 55%, but the exemption will shrink from $3.5 million per individual in 2009 to just $1 million in 2011, potentially affecting eight times as many taxpayers.

The math is ugly: On a $5 million estate, the tax consequence of dying a minute after midnight on Jan. 1, 2011 rather than two minutes earlier could be more than $2 million; on a $15 million estate, the difference could be about $8 million.

Of course, there is a "death incentive" whenever Congress raises the estate tax. But it hasn't happened in decades; the top rate has held steady or fallen since 1942, according to tax historian Joseph Thorndike of Tax Analysts, a nonprofit group. In fact, the jump from zero to 55% would be "the largest increase in a major tax that we've ever seen," Mr. Thorndike says.

Too Rich to Live? The estate tax is set to come roaring back in January. That sets the stage for a perverse calculus: End it all—or leave a massive bill for your heirs to deal with. WSJ.com, July 10, 2010

Baseball and Investing

Growing up with a dad that played a lot of baseball, many of the advice I heard around the dinner table related to the strategy of the diamond.

Particularly, I think about frequent advice to focus on the fundamentals while hitting singles and letting the home runs happen. Great advice for a young man that had (maybe, "has") a talent for sometimes biting of more than he could chew.

But the thing I was thinking about this weekend was the mystery of a streak. You know, "don't mess with a man on a streak" and all of the hocus pocus that makes for so much fun on the outside looking in.

I think deals may be somewhat like baseball streaks (and maybe home runs too). I never really know what trigger gets a deal on a hot streak, but I sure don't want to touch them too much when they are on one.

I wonder if it would help to suggest wearing lucky socks too.

What do Angels want to see?

Angel investors should want to work with entrepreneurs that (1) value their investment even more than they do and (2) are fanatical about the product or service...but social intelligence is huge too.

Social intelligence makes almost all of the many tough things about starting a new business easier...marketing, sales, HR, customer complaints, negotiations, investor relations and the list goes on.

Unfortunately, it is the lack of social intelligence that makes many brilliant and creative people a terrible fit to lead a new venture. That doesn't mean those people can't be involved at all, but the overall leadership needs to be good with people.

So if you are an odd duck, be honest with yourself about it and try to partner with someone that can be a great face of the company or you may be fighting a long battle.