In the blog “What a Startup CEO Can Learn from a Presidential Candidate,” I drew a comparison between how being a candidate for the President of the United States is not much different from being a CEO of a startup company. To be successful, both the presidential candidate and the CEO have to keep their focus on the big picture, which is to quickly grow --- a campaign for a presidential candidate (by adding staff, get more volunteers and raise money) and a company for a CEO (by adding staff, acquire customers and raise money).
In the blog, “Winning Lesson a Startup CEO Can Learn from President John F. Kennedy,” I looked at a specific example of how President Kennedy's campaign team used him effectively during the Democratic primary to win in West Virginia where they determined (based on the information they gathered being on the ground) that John F. Kennedy had to address the religion issue directly to win. Kennedy did it effectively and won.
In this blog post, I look at a real world business example of how this important lesson from Kennedy’s campaign team was used to help a startup increase its sales and market valuation by closing two six-figure deals in less than three months.
It all started when I met, through a mutual acquaintance, a CEO of a startup company based in New Jersey. The company specialized in developing both hardware and software for indoor real time location system (RTLS) solutions using WiFi/RFID. The technology allows a company to track assets inside a building using the WiFi network and RFID tags on the assets. This is referred to as an Internet of Things (IOT) or Internet of Everything (IOW) type of a solution.
After talking to the CEO I discovered that the company was having difficulty generating sales. In addition, the CEO explained that one of the reason for this is that he was doing both sales and being a CEO; hence, he could not do his job of being a CEO and grow the company. I agreed with his assessment, especially when you are pursuing business to business (B2B) opportunities which are quite complex, highly political and very time consuming.
I made an obvious recommendation to the CEO that he should hire a dedicated sales person, to which he replied that he was not having much success in finding a talented sales rep who had both the business acumen and deep technical depth. The solution the company was selling was quite technical and had to be sold at various levels within a company, ranging from technical managers to business executives. He asked me if I would be interested in joining his company and lead the sales and marketing effort.
Since we happen to work with startups and small companies, helping them drive sales and secure funding from investors, I proposed to him that we work with his company as a business development “pinch hitters” on a three month contract. During that time, we would manage sales and marketing and execute his growth strategy. The CEO liked the idea but wanted to make sure that he would not lose control and was always kept in the loop of our sales and marketing activities. We had no problem with that since we were there to help him grow his business, so we both agreed and signed a three month contract.
During our initial meeting with the CEO and his technical team, we discovered, as indicated by the CEO, that the company was having difficulty in generating business. But, we were kind of puzzled since the company had an excellent technology (e.g. Apple recently acquired a company called WiFiSLAM that does what this startup was doing) and technical know how to deliver value. They expressed a real concern that if things did not turn around real soon, they would run out of money and would have to shut down.
Even with this difficult challenge, we were confident that we could make this company succeed with a focused approach to sales, marketing and support. We were eager to get started and prove once again that if we had the right attitude, methodology and approach, we could turn this company around, too.
There were four things we focused on for the limited time we had:
1) Let CEO focus on running the company
2) Build and nurture key partnerships
3) Focus on content and context marketing
4) Differentiate with customized solution for mid to large sized companies.
Let CEO be CEO.
This was the most important thing we had to do since the CEO was very good technically and had the guts to start a company, but needed some help him with sales and marketing. He alone could not do it in the short time frame he had ti turn things around. He had to deal with investors who were very worried about the future of the company and their investment. The CEO has to allay their concerns so they did not file a lawsuit to recover their investment.
Since the CEO had to deal with the investors, we agreed that he would focus on the existing accounts (due to his existing relationships) and we would focus on new opportunities.
We worked with the CEO to build partnerships with several key companies, including Cisco, Motorola and Honeywell. Though you have to always prove you can win your own deals to gain respect from partners, but you also have to work hard at forging key partnerships that are needed to grow the company. The CEO knew that partnerships take time but had to be formed and made himself available to meet with partners' executives to get the partnerships formally in place.
Leverage content and context marketing
Content and context marketing are becoming very important today since customers want to buy and not be sold. To sell in this environment, you have to quickly produce the right content in the right format with the right message that speaks directly to the prospect’s needs, wants, hopes and desires. Whoever does this well today gets invited to have conversations with the prospects so they have all the information they need to make the purchase decision. The CEO agreed that we should focus on this over other marketing efforts that was not generating that many good leads.
The company had a good solution but could easily be commoditized by other domestic and foreign competitors, so we worked with the CEO to position the company as a customized WiFI/RFID indoor solution provider to address their specific business needs. This was our differentiator -- focus on large mid to large sized customers where we can jointly co-create a solution. The CEO and we both agreed that this was the only way we could target large accounts.
Today, your only advantage to winning is that you have a methodology that can do things faster, smarter, cheaper and better than your competitors. Everything else can be copied very quickly. To compete and win, a company requires coordinating and integrating sales, marketing, partnerships, customer development and agile/lean methodology -- this was done using the 5 Tool Methodology that we have developed from research, experience and thought leaders.
We targeted healthcare field since the company had experience in that area but not big hospitals. Hospitals have a very long sales cycle and unless you are working with a strong partner who can bring you in, it is better to not go on your own. Even for a mid-size opportunity, we worked with a partner to target a hospital in New Mexico.
Since our strategy was to provide customized solution, we targeted logistics and suppy chain because we felt the company's solution was a good fit for this vertical industry.
We worked well with the partners and won the business in New Mexico. The total size of the deal for us was over $100K for phase 1 and over $100K for subsequent phases.
The second deal was a major deal with one of the largest logistics provider in the world. To win this business required us to change the game with our RFP response. We realized that unless we came up with an alternative solution we would not win. We put together our response (as a team) over a weekend and ended up winning the business against some major well funded competitors.
We were awarded the contract for over $100K for the pilot. The phase 1 of the project was valued at over $500K for the US deployment. The phase 2 of the project was valued at over $2M for the global deployment. We felt that there was a potential for over $10M in this one account alone if we executed flawlessly in sales, support and development.
After the deal was signed, we transitioned the sales and marketing over to a new VP of Sales and Marketing and focused on securing funding from investors now that the company had sales success and can command a higher valuation because we proved it in the field where it counts in business.
Our success had lot to do with how we approached sales. Though we had limited budget and resources, we made it up with strategy, focus, methodology and execution to not only play the game but to win it. One of the part that often gets lost in a startup’s success is the role and the leadership played by the CEO. The CEO supported our efforts all along and got actively involved when we felt that he alone could help move things forward. This not only helped us focus on doing our job well, but it also made the CEO more effective in his job.
We took away an important lesson from President John F. Kennedy’s example in his campaign in 1960 that a leader is most effective when he is supportive and is ready to get involved quickly to help move things forward. He left many of the decisions to the people who were close to the action since they had the best intelligence, relationships and know how to get the job done. We were that team for this startup and got the job done.
One of the hallmark of a successful startup artist is his ability to delgate. Just like a Presidential candidate who can't do it all alone, a business entrepreneur can't do it all on his own also. Richard Branson, a business magnate and Chairman of Virgin Group, attributes his success to his art of delegation. He says in this article in Entrpreneur.com that "one of the key skills I learned as a young businessman was the power of delegation. That has prompted me to bring in strong managers to build the Virgin companies, which allowed me to focus on our latest ideas and projects, and on finding the next businesses to start up."
Today there are lot of opportunities to start a business, but most don’t succeed for various reasons. For a startup to succeed is a real long shot. It takes lots of guts to take this shot, and with strategy, execution, innovation, creativity, passion and luck, you can make it. Sometimes an assist (from a company like 5ToolGroup) is needed to get the ball in the hand of the CEO with the guts so that he has an opportunity to make the long shot with time is running out, so he can win the game.