You might have the best product in the world — one that could solve mission critical problems for a company, is unquestionably brilliant, and will completely change the game. But whatever your innovation, here’s the truth: market traction trumps all.
I’ve been known to shout those words in strategy meetings, because I’ve always believed that sales is the engine of the company. I get a lot of heat for that stance — mainly from inventors and technologists who believe that without them, there would be nothing to sell. There’s a perpetual conflict between inventors and salespeople: the inventor argues that the biggest challenge is in creating the product, while the salesperson argues that selling it is the true hurdle.
As someone who’s been involved in a lot of startups and has learned the hard way, it’s my job to remind you that innovation has to happen on the sales side too. Many of us entrepreneurs simplify sales into one neat formula: product + compelling reason to buy + ROI + customer reach. But customers are unpredictable. They can be fickle, skeptical, and just plain lazy. If you want to help your sales team actually sell, follow these five simple rules:
1. Beware the 9x effect
First introduced in Harvard Business Review, the 9x equation illustrates a fundamental gap between innovator and consumer thinking. Innovators overweigh their new products’ benefits by a factor of three, while consumers overweigh their existing products’ benefits by a factor of three. (3 x 3 = 9). But innovators can’t ask their future customers precisely what they want, because how can they know what they want if a product doesn’t yet exist? To change people’s habits, even when we present them with clear personal benefits and financial value, is no easy task. You need to strike a balance between consumers’ demand for innovation and their simultaneous desire for familiarity, consistency, and convenience.
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2. Innovate for the lazy
The most successful innovators innovate for the lazy. They bring forth groundbreaking customer benefits without necessitating substantial changes to the user experience. For instance, in 2005, Toyota sold 100,000 Prius cars by offering over 45 mpg while keeping its combustion engine. To the user, it was simply a car with exceptional gas mileage. In 2007, Netflix introduced the concept of streaming movies and television shows: viewers could seamlessly use their TV remote controls the same as before — requiring no shifts in their established behaviors. By 2023 Netflix had nearly 250 million subscribers. Google understood both the 9x effect and customer behavior brilliantly. In 1999, when the nascent firm moved from their humble garage to a small Palo Alto office on University Avenue, there were over ten prominent search engines in the marketplace: well-funded heavyweights like AltaVista, Lycos, Yahoo, Ask Jeeves, Look Smart, MSN Search, Infoseek, and numerous others. Google delivered valuable benefits that outshone other search engines by a factor of nine. All customers had to do was type their desired search query into a box — just as they had done on previous search engines — and the intricate algorithms operated in the background. As of 2023, some 90% of all desktop searches were conducted on Google, amounting to over 8.5 billion searches per day, or 99,000 per second.
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3. Nail it before you scale it (and don’t confuse technology market-fit with product market-fit)
Before you scale, make sure you know the difference between technology market-fit and product market-fit. Technology market fit refers to whether the company’s technology effectively aligns with market requirements in terms of performance and cost. Product market fit refers to whether customers genuinely value the product — leading to actual sales. Some startups will realize too late that they should have focused on nailing their product market fit, winning over their first ten customers and refining their sales and marketing strategies before scaling.
Premature scaling accounts for 70 percent of all startup failures, according to a Startup Genome study. Rushing to market with a flawed product or unready customer is likely to set off a vicious cycle of product recalls or customer dissatisfaction. It’s been well established that a satisfied customer may share their positive experience with just one person, while an unhappy customer tends to broadcast their discontent to as many as ten others.
4. Separate your sales pipeline from your sales funnel
This is something all entrepreneurs should understand — it’s not just something reserved for the sales team. A sales pipeline is the step-by-step, multi-stage path your business follows throughout the sales process, including lead generation, prospect qualification, meetings, proposal presentation and, ultimately, closing the deal. It outlines the journey a prospect takes as they evolve into a paying customer.
A sales funnel tracks the progression of leads through different stages, ultimately leading to converted customers at the bottom. Think of a sales funnel as a container into which you pour all your leads. You can then monitor how they move through your metaphorical shop and how many eventually transform into buyers. Forecast your sales projections on your pipeline, but evaluate your marketing strategies through your sales funnel.
5. Partner with your early customers
Don’t forget that you’re an “early-stage company,” bordering the “startup” category. Customers who purchase from a startup have a whole range of unspoken concerns: Can the company provide reference users for potential customers to speak with? Has the product been thoroughly tested, and does its performance match the claims made in marketing materials? Will the company be able to provide the necessary products and services in the long run? Even if customers don’t voice these concerns as the top ones, they are big subconscious hesitations that entrepreneurs must address upfront.
Frankly, it’s taken me a long time to understand the paradox that underlies customer behaviors. But a wise investor once told me that “the Number One way to solve all your problems is through paying customers.” It’s certainly easier said than done. But it’s also something you should never overlook. Sheer brilliance will not carry the day, but carefully strategizing with customers in mind will.
Ashwin Gulati is the author of Soul Venture: A True Life and Death Journey into the Startup Culture.
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