The main reason I share stories of my ups and downs in business here is to help fellow innovators on their journey toward success. I’ve learned much from others over the years and know the value of a “workaround” to avoid pitfalls and discover wins.
The second reason I write is to remind myself of those same pitfalls and shortcuts to success.
Startup founders tend to be wired differently. Some might say we’re a little bit insane. It’s fitting that Albert Einstein said: "Insanity is doing the same thing over and over again and expecting different results."—because every time we start over, we tend to make the same mistakes.
This is one of those stories. Maybe you’ll learn better than I have…
“Can we meet on Sunday?”
It’s Saturday at 3 pm, and I’m taking my dog outside for a bathroom break before I meet friends for beers. We’re going to the big soccer match tonight, and the weather is wonderful. My phone buzzes, and I see an incoming call from Michael, the leader of an organization that my team and I at Hearty have been working with.
Over the past few months, I’ve been arm-in-arm with Michael on an exciting new partnership between our teams. It’s a game-changer. It’s something the world really needs. We’ve spent a ton of time and energy on it. We’re getting early client meetings at a rate that is unheard of in the world of enterprise sales. And they are loving what we share with them.
My first thought is that he probably butt-dialed me—why else would he be calling on a beautiful Saturday afternoon?—so I let it go to voicemail. But Michael follows with a text asking me to call him back. I bring the dog back and pull up the phone.
Michael: “Hey, Bob, do you have time to get together today…or tomorrow?”
Bob: “Sure…uh…is everything OK?”
Michael: “Yeah, I’ve just got a lot of strategy thoughts coming out of our recent pitch meetings and need to get them on the table.”
We plan to meet at 1 pm Sunday at our shared office space. I usually practice productive paranoia, but this time I’m just plain paranoid. Memories of similar “surprise meetings” flood my brain. I go back to my parents saying, “We need to talk…” and the many direct reports who put mystery topics on my calendar, which end up with them resigning.
But I pack those bad memories away, hope for the best, and drink an extra beer or two at the game.
Flash forward to the next day, and I meet Michael at the office. I’m feeling a little off from the extra beer or two last night, but eager to get into whatever’s on his mind.
And we proceed to have an amazing strategic conversation. Whew!
Michael proceeds to point out a major “Aha” from our past few weeks of pitching. He describes that while clients are reacting positively and we’re continuing conversations, we are getting caught up in some internal budget and decision-making issues. We’re trying to sell to two departments at once, and it’s making it harder for either of them to buy.
I completely see the truth and agree, and we spend another ninety minutes laying out a better positioning strategy and product roadmap. Overall, we’ve got to make it easier for our clients to buy what we’re selling.
Before we part I jokingly ask Michael not to scare me like this again. It’s all part of the process of building a new partnership—and friendship. We head back home to enjoy the rest of the weekend.
I’ve been here before…
As I walk back home from our discussion, I flashback to a similar discussion in the summer of 2013…
I’m a co-founder of another early-stage startup. This one, called Ahalogy, offers a solution for big company marketers to succeed on Pinterest. My biz dev lead and long-time personal friend, Raman, and I are in New Jersey for a day of pitching brands at Novartis.
We’d been on the road for months trying to sell our new solution, with a team of employees and investors counting on us to win some contracts. We came up with a pricing model that was creative and seemed to fit with what we thought clients would want:
Use of our special software platform to optimize their Pinterest accounts.
Performance-based pricing that’s determined by the number of incremental Followers they earn.
A 3-month test term, with a $15,000 maximum capped fee.
On paper, it sounded great! Low cost, limited time, and performance-based were all things these marketing clients said they liked. But it’s not selling.
As we sit in our rental car between meetings, it finally dawns on us: We’re making things too freaking complicated!
First, the clients don’t want to touch yet another piece of software. That’s why they hire agencies to do work for them. Second, performance pricing doesn’t work in their budget process. They ask Finance for a specific number, not a “pay as you go” open bank account. Finally, the 3-month test barely gets them off the ground.
The good news is that we’ve got many more clients to call on—including another one in 15 minutes! Raman pulls up his laptop and quickly updates our deck. We increase our fee to $50,000 and say that our client success team will do the work using the software. We kill the performance pricing and make it a flat fee. And we double the term to 6 months so there’s enough time to see our positive impact and get a bigger budget in the next contract. We head back into Novartis HQ to speak with the next brand on our list.
It goes much, much better.
We get a yes from that brand. Raman and I high-five in the parking lot and head to the airport for a flight to Chicago and a meeting with Kraft. The next week Raman gets Olay to sign on Monday, then a couple of brands at Kellogg on Wednesday, and we end the week with a Yes from KIND Snacks.
Make it easy to buy and it’s easier to sell
Today, having been through this process a few times, it’s clearer to me that your product or service can be positioned and priced “easier” by looking at a few key pieces of the puzzle:
The clients have real pain - this makes it easier to justify buying and easier to sell internally.
There’s a spot in the budget already - it’s set aside or can be pulled from cutting something that’s not working.
There’s one decision-maker - avoids the inevitable internal friction.
ROI is clear - preferably touching this decision-maker’s personal success measures, like reducing cost and/or increasing revenue.
Client success is standing by - Doing anything new is hard; client success is required to make it much easier.
Your solution is innovative - IF all of the above is present, then clients love to play with new toys. They are generally curious, looking for better solutions, and often want to be on the cutting edge. This is where they can make their day more interesting and potentially be recognized for successful risk-taking when it’s time for their annual review and promotion discussions.
Don’t kick yourself for getting this wrong in the first months of pitching. No product, pricing, or positioning plan survives first contact with a customer. Your early goal is to get feedback and learn what they really need and what it will take to make it easier for them to say Yes.
Two heads make it easier
Thank god I’ve always had good partners to pitch with.
One of my weaknesses is that I can get too excited about a big vision and creative business models. I’m thinking about Year Five when we must get through Week Five. So going into these meetings with a co-presenter can be critical early on. Two people in the room make perspective more balanced when you’re debriefing. In my case, Michael and Raman brought me back to earth.
It’s also a lot more emotionally rewarding to innovate with others—and I couldn’t imagine going through the grind of getting off the ground all alone. When one is feeling down, the other brings you up. And celebrating the wins is much sweeter together. No success story is self-made, so surround yourself with people that balance your weaknesses and let you flex your strengths. Innovation is a great team sport.
Bob Gilbreath is a 2x-exit entrepreneur and co-founder of Hearty, a curated matchmaking service that combines top software developers with early-stage, venture-backed startups.