Andrew talks with Scott Sambucci, CEO and Founder of SalesQualia, on how to leverage the sales process for startups. Scott demystifies the selling, reminding entrepreneurs to stop focusing on the product - but instead, to focus on the problem and the solutions their product offers.
Andrew Verboncouer: You're listening to the Seaworthy Podcast, Episode 18, Startup Sales. Seaworthy is a podcast about building successful software. Today we're talking about selling on the problem you solve with Scott Sambucci, of Sales Qualia. I'm excited to have Scott Sambucci on the show with me today. Scott's the founder and chief sales geek of sales qualia. A company helping startups build successful sales systems and team. Welcome to Seaworthy Scott, thanks for coming.
Scott Sambucci: Hey, dude, awesome to be here.
Andrew Verboncouer: Yeah, yeah, we've just for everyone listening we've worked together for I'm trying to think about three years almost now. Just three years. Yeah, it's been great. I think we met at a at owner summit, which is an agency meetup agency type conference, we were in San Diego at the time, and have been working with Scott and his team, and just really believe in their approach, you know, the human side of sales. I think sales gets a bad rap. I think Scott does a really great job, as you'll see of demystifying that and really bringing you know, the human elements into the sales process and really trying to genuinely help people. And for anyone that's listening, that's your goal, you know, in creating a product around something is solving a valuable problem for somebody, and you know, trying to find those customers that can really benefit from what you're offering. And so excited for this conversation. Before we get started, Scott, you want to tell us a little bit about your background, where you went to school and just who Scott Sambucci: is.
Scott Sambucci: Oh, it all started now. I think the short version, the bullet point version is I've been doing enterprise sales for 25 years right out of college. I started doing enterprise b2b sales. And over the course of the last almost 20 years now, I've been in Silicon Valley, I've worked with three different b2b technology startups, growing each of those companies from virtually zero revenue to the first couple million dollars in revenue, most recently with a company called blend, which is in the mortgage lending space. And now with sales qualla, starting about 10 years ago on a part time basis, and now over the last five years, on as a full time basis, we work with b2b startups and tech companies and companies that want to build a more repeatable, scalable sales process. That's the focus of our work every day.
Andrew Verboncouer: Yeah, that's great. You also spent some time in, you know, teaching students in in university and business schools?
Scott Sambucci: Yeah, I sort of backed into that I was. So even trying to think now trying to put together the dates in the episodes in my life, there was a time where I took a break from startups. So I was working at a my first startup was called Aplia, which is founded by a guy named Paul Romer. Anybody who's in the world of economics might recognize that name. Paul Romer recently won the Nobel Prize for economics. And, but back in 2001, he started a tech startup in ed tech startup. And I worked with him for a couple years and really got to love economics as a field. And so so much so that I decided to leave halfway, and I went back to a graduate program in economics at the University of San Francisco, and part of the field part of the part of the degree required going internationally to do some field research. And so long story short, I ended up in a place called in a country of Kazakhstan. And while I was in Kazakhstan, I was hosted at a university there. They needed somebody to teach some finance courses. I have an MBA in finance from Duke University. And they said, Hey, can you teach Finance? And I said, Well, I don't know. But willing to give it a try. And that led to my doing some adjunct teaching. And since over the years, I've now taught at a couple different universities, most recently at a program called Hult International School of Business. And it's just something I kind of do to fill the time, give back a little bit. And I just enjoy being in a teaching position, whether that's coaching our clients or teaching students to help them learn stuff that they want to learn.
Andrew Verboncouer: Yeah, I think that that ties into a lot of, you know, our approach here at headway for sales and some of what we've learned from you and your team is, you know, if you can educate clients and teach and have conversations about elevating what they're doing and what some best practices are, you know, that's really the best selling it's not you know, the salesman that's knocking on your door trying to pressure you to buy it's helping someone realize that, you know, you have a potential problem. And there's a solution that you can offer to help alleviate, or reach their goals or, or something. I think it's you know, some of the best salespeople are great teachers. And so I think that isn't a coincidence that you've had that experience and, you know, in our, I guess, history together and working with you and your team, so yeah, that's really cool. What, what types of things keep you busy outside of work, and outside of sales and teaching?
Scott Sambucci: Well two people keep me really busy. One is my wife and one is my son. So my wife is a PhD from UC Davis. So she's an agricultural behavioral economist, excuse me, a behavioral economist. And so she did some consulting work, and she's a project scientists on campus at UC Davis. What if you asked her though, what she really loves to do? It's flying. So she's a certified flight instructor. And so she teaches people how to fly airplanes. I asked her how the day one she said, Well, I prevented somebody from dying about three times today. So that keeps her pretty busy and that keeps me busy making sure that she gets to follow that hobby and that passion of hers. My son is eight years old. So he does all the stuff that eight year olds do, which is, you know, sports and gymnastics, and he's now doing rock climbing and jujitsu. So staying busy with him outside of work, trying to keep up with him, which is pretty tough. And for me personally, the probably the one thing I do more than anything outside of work is ultra running and endurance events. So I started off doing triathlons about 10, 11 years ago, eventually did a couple of Iron Man's after the Iron Man stuff, I got kind of burned out on triathlons. So I switched over to just doing very unique long distance endurance events. As an example, I swim in Catalina channel, which is a 24 mile swim and I swam across Lake Tahoe, which is an 11 mile swim. And over the last few years, I've been mostly focused on ultra running, so doing ultra marathons, anything that's a 50 K or longer, and most of the races that I tend to focus on are 100 and 200 hundred mile races.
Andrew Verboncouer: That's pretty impressive. Do you? We have, I think we've talked about this before, but Tommy, a developer on our team is into ultras, and he, to my surprise does not listen to music or anything in these. I was curious, do you? Do you listen to music, podcasts anything? Are you kind of in nature?
Scott Sambucci: Ironic question in some capacity. I've never listened to music while I've been running or training or during races. Except for the most recent race. I did. So, back in early February, I did a 100 mile ultra marathon down in New Zealand called the Terra were 100. And I for whatever reason, when I was packing up and getting ready for the weeks and days leading into the race, I decided, you know, I'm going to bring headphones just in case. I feel like I need them. And I've never felt like I wanted them before. I never felt like I needed them but I wasn't I don't use a pacer for that. hundred mile races, a lot of people will pick up what they call a pacer. Somebody can run with you for the last 30 or 40 miles. I've never used a pacer for 100 mile race part of it is logistics and it's just like one more thing to worry about. Part of it is I like the mental aspect of just doing it on my own. And so I do know by doing these races a couple times I hit a wall like a low spot around the 70, 80 mile mark by then it's late at night, you've been going for 16 hours and it just gets hard. And so I packed these earphones and right around mile 70 I think it was or 60 I remembered I had them then I pull them out and I pulled up a Spotify playlist and I listened to that thing forget, you know, 15, 20 miles of the race. And it was it was probably the one thing that really helped me the most. Avoid this crash of ineptitude and like questioning why the hell am I doing? What am I doing out here? So that's an m&m tracks on there and yeah, Disney tunes and Imagine Dragons. It's a pretty wide range. stuff, but it definitely kept me going on the trail. So that's the one time one time so far that I've ever used music on a race or live in training.
Andrew Verboncouer: Wow, yeah, I imagine, you know, a lot of people run, you know, a lot shorter distances to clear their head and, yeah, listening to anything but you know, 10, 20 minutes at max, when you're thinking about 16 to 36 hours, you know, in your own head, you have to, you know, you got to coach yourself, I'm sure you got to make sure that you're in it and, you know, kind of check yourself as you're running. Yeah.
Scott Sambucci: Well, a lot of it's just, and I, you know, if people could check out some of the stuff I've done like post on LinkedIn or some of the blog posts or people on my email list, I oftentimes will relate the ultra running and the endurance events to sales and running a startup and growing a company growing a team because it's easy to feel very overwhelmed with the idea of doing 100 miles or in my case, I've done two 200 mile races. And so if you sit there and say like, how am I going to run 200 miles over the next three days, it's, it feels like an impossible task, because frankly, kind of is it's not but it is, in some ways, you can't really get your head around it. And so one of the mantras and ultra running is this concept of station to station. So there's frequently aid stations along the way. And so they can be anywhere from five to 10 miles apart, sometimes 20 miles apart if it's a longer race. And really, the way to run these races is just to segment the race down and say, Okay, well, I'm at mile 45, the next eight stations at mile 53. And I know what the terrain is like I have an elevation map, it's going to be 2000 feet of climbing and then some downhill and then there's going to be some technical terrain next to this lake. And you just tell yourself okay, well, this you know, this next segment is probably going to take me about three hours. And I'm just going to focus on getting to the next aid station. I'm going to focus on getting to the top of the climb and then I'm going to enjoy the two months downhill. And then when it comes to get technical, just accept that it's going to be slow. And there's nothing I can do about the fact that there's rocks and roots and trees in the way, just sort of go with it. And then you pull into the next aid station and you feel really good because you finally see people in light and food. And you sort of celebrate for a moment say, Okay, I made it and then you think, what's the next aid station. So I think just listening that I'm sure a lot of people can appreciate how much that's just like running a company or building a product or working on an enterprise sales deal. There's, it's a very long process. And if you try to think about the entire process at once it's too overwhelming, the best thing you can do is just break it down and think about what are the obstacles in the way that I need to do now? Let's focus on now now and worry about later later.
Andrew Verboncouer: Yeah, and I think you know, part of that the rush you get, you know, if you're in sales of hitting quota, or passing quota, but the realization that you now have the same or more effort kind of ahead of you depending on your company's trajectory, to really keep you know, keep yourself in it, keep your team in it, and understand that it's a ultra marathon not, you know, not a sprint, by any means.
Scott Sambucci: Yeah. And that rush is so short and fleeting. Even in the race, whenever you get to the next aid station, or even you reach the finish line. I mean, there's certainly a rush that you feel like man, it's over. A lot of times for me, I'll get to the finish line. And I'll just break down in tears because I get overwhelmed with emotion. And what I've come to realize is that the that buzz of that feeling isn't because I hit the finish line. It's me feeling a sense of celebration of all of the work that went into it. I mean, there's the age old phrase about the journey is the joy and hitting that finish line or converting that customer that you've been working on? Yes, this rush is feeling great? This is awesome. We get to celebrate. The real celebration is because you put in the work you put in the effort you did planning, you did all the right things. You got a good team to help you out when you needed it. You, you put together a plan of action that allowed you to get to that place. That's really an eye for at least for me, that's how I've always felt. That's the reason you feel that not because it's like this rush of adrenaline because you're all you're trying to do is get rushes of adrenaline, you just, you're never going to be able to find enough, right? Keep yourself up. And so that's what you have to really enjoy that journey, whether even if it's a long, 2000 foot climb, or really technical part. You just accept it and enjoy and say, this is where I want to be. I chose to be here. I'm doing hard things. And this is probably really hard. And when I get to the next day station, I'm gonna be done with this part. That's what I celebrate. Then you refuel and you feel a sense of accomplishment. I did that. And now I know I can do more, and then you just keep pushing.
Andrew Verboncouer: Yeah, I think that that's a big factor in why people keep going with their startup or end up quitting is believing in the impact and the process to get there and day to day, you know, putting in the work pounding the pavement. And so I think that's something that I've seen you know, as we've been working together with other teams that have joined is really what impact do you want to make? And I think that's so important you know, even for our work as a you know, as an agency of understanding where do people want to go and you know, not just with the product but in life in their goals and how is this a part of that because there is no work life balance, everything kind of, you know, just is and you have to prioritize and you know, especially with a family and a product and with competing things, you have to decide what you want, you know, what your legacy is going to be and how this is part of that. So yeah, I think that's huge. Do you want to just tell us a little bit more about sales qualia and in the story of starting it and you know, we know a little bit about you know, your sales experience before that, but why, you know, maybe why did you feel that it was time to go out on your own and, and how did everything get started?
Scott Sambucci: Yeah, so the the start of the company was a confluence of a couple of different things. It all just kind of happened at one time. So number one, I was the CEO at the time, I was a chief operating officer, the CFO at altos research. So this is going back to 2011, about 10 years ago. And so as a CFO, I started off just doing all of the sales and eventually growing the sales team and customer support team around me and beneath me, and then continued to just manage more and more of the day to day functions and priorities and operations of the company, and in addition to sales. And so part of that, of course, is building and continuing to manage an entire sales team. So as I started thinking about, well, how am I going to teach this team to take over enterprise sales and sell to companies like Goldman Sachs and Morgan Stanley, there's I don't have like a playbook, other than me doing it here at this company and our founder doing it. And so that was the first sort of event is this realization, like I gotta figure out a way to teach these new salespeople how to do what we knew, because I need them to be just as effective as me if we're going to keep rolling. So that was part one - part two was at that time while I was at altos, I was commuting from Davis, California down to Mountain View. So I mentioned my wife earlier, and at the time she was working on her PhD, and here at UC Davis are here in Davis at UC Davis. And so I would commute to Mountain View, I go down, usually, like on a Sunday or Monday, stay for a few nights. And then come back on a Thursday, she was doing her PhD studies, we didn't have kids at the time. So it was no big deal. Like it just disappeared. She didn't notice because she was doing her research. And I was staying at a hotel for a while. And then eventually I found the spot in a startup house near Stanford. And it was one of these It was like one of those things you would imagine where there's, I think there was something like 12 or 13 different people living in this house, and three or four startups all working from this house. So I just got to know some of the teams there and this one team was working on a product for the enterprise. It was a pricing engine product for retailers and just sort of like following them on a day to day basis. And one of the things I realized is that the team of really, really smart dudes, were very focused on the product they get worried about like, Okay, well, we're gonna change the button, the buttons gonna be blue now, or look, we've added this dashboard, or we've got this new integration. And I kept asking them like, hey, so have you talked to any customers? And like, Well, no, we're just kind of working on that. And they that's one customer said, if we do this, then maybe they'll buy. I was like, dude, you guys got to like sell this thing. Hmm. So that was kind of going on in the side while I was trying to figure out how to teach these guys at altos. I say guys, because they happen to all be men at the time. And then so the third thing that was the third event was I was reading at the time. One of the blogs I was reading is a guy named James Altucher which now he's he's gotten pretty popular, but about 10 years ago, he's just starting to do a lot of blogging. And he had been writing about this concept of writing your own book and choose yourself and becoming your own authority voice. And so it's really I was reading his blog post and I thought he basically did a blog post on how to self publish. should look like I can write a book, I've always wanted to write a book. So those three things all happening at one time, I decided, Well, let me just start taking some notes in Evernote, about what I would teach somebody if they needed to learn sales and never done sales before. And the outcome of that over a course of a month was the first book that I self published called startup selling, how to sell if you really, really have to, and don't know how. So the book then led to an invitation to teach some workshops, including the Lean Startup conference, and taught a sales workshop there that I worked with a guy named Sean Murphy on that workshop. So I had that opportunity to start teaching then, because other startup groups knew that I taught at the Lean Startup conferences today because you run that workshop with our group. And so I go do other workshops. And then every time I do a workshop, after the workshop, somebody will come up to me and say, Hey, that was really good workshop. Do you ever coach people on like, how to implement this stuff that you're teaching? And of course, my answer was sure, of course I do. And so I picked up some coaching clients just doing some one on one coaching here and there on the side while working at altos. And that was just kind of this Genesis I never really intended to like, hey, on this day, I'm going to start this company that's going to be focused on sales coaching for startups, it was just an evolution that started with this confluence of events, or doing workshops which led to coaching clients. And over the course of about four or five years I built up enough sort of, you know, relationships and clients and teaching opportunities that allowed me to step aside from at the time it was the head of sales at Blend to then make this my full time work. That's, that's the origin story.
Andrew Verboncouer: Yeah. So how is it? You mentioned you started in 2011 - When did you get started kind of full time where you decided to go out and leave blend?
Scott Sambucci: Yeah, so my first official full time day was October 1, 2015. Yeah. So October so it's been about four and a half years. Yeah, so I was doing doing on the side about four years, I guess four or five years. Yeah.
Andrew Verboncouer: Yeah. How was how sales qualia different today than then back then, when you started full time?
Scott Sambucci: So back then it was just, you know, show up to a shared workspace or some startup group. There's a Lean Startup group friend of mine, interesting Cromer he would run these Lean Startup meetups and you have to come in and do workshops. So I'd come in, show up on like a Tuesday night and teach from six to nine. And that was it. I mean, I would just kind of leave sometimes people would ask about getting some coaching help and I would have a phone call with them every week or every, every couple couple weeks just to answer the questions. It was just a very rudimentary, like the the most basic form of a coaching practice, which is teach stuff. Find a client, teach that client stuff. And there really was no system or strategy in place, it was just a matter of, I'm going to try to help out some people and make some side income. As I started thinking about, you know, moving away from blend it was it was it was a hard decision for a couple of reasons. One because one was exploding with its growth. I personally, I knew the founders of the company have personal friends of mine, that asked me to come run sales there. So on a personal level is a hard decision at a business level is a hard decision. But what made it actually easy was the fact that at the time, my son was about a year and a half, two years old. And my wife is still working on her PhD at this time. And the first time my son had to go to the hospital. It wasn't anything serious, but it was one of those things when you have a two year old and they're sick and they can't breathe because they have a really bad cold. You got to take them to the er because that's what you do.
Andrew Verboncouer: Yeah.
Scott Sambucci: And I remember getting this text message from my wife standing out out of a BW-3's in Dallas, Texas, not even Dallas it was, I think it was Lewisville or Lewiston. I forget the name of it. It's like some suburb of Dallas. There was about to meet my team for dinner. And it's about six o'clock at night. And she said, Ben was really sick, I got to take him to hospital. And I wish, I always get a little emotional on this, because it just always so vivid. And I just remember feeling so helpless. They are I am doing the startup thing. And it's fun and exciting. And we're doing all the things on the business side that, you know, it's like the dream job. You're with a great team and a great product and a huge market opportunity. well funded customers that love you. But yet as like a dad and a husband and I'm not there. And that just really sucked in that moment. I just, I got I gotta figure something out. Because this just can't go and it was only going to get worse, the more the company grew I was only gonna be traveling more and the demands are going to get even greater. So it took me a good you know, once we made the decision, I say we because my wife and I talked about this, it took a good 10 months of time from the time I said, Look, I'm I gotta make a change to the point where I could actually leave. And so in that, in that time, a big focus was how do I build some systems myself? Like, how am I going to go, I can't just like I hope to get a workshop and hope to get clients - at the end of the workshop, I can just kind of do a bunch of one on one calls with people, because that's super time consuming, and it's not really that effective. And how am I going to sell what I do? How am I going to maintain the time I'm going to grow from a one person operation? And so I spent about 10 months just starting to build systems for lead gen and starting to build systems for how can I coach more clients at one time, how can I get them teaching each other. And so through that process, really as a forcing function to build a more repeatable process within my own system within my own company that got me to where we are now, which is, you know, working with 30 teams at a time having them come together for two day, client events three times a year doing coaching calls every week in small groups doing some one on one stuff when we need to, Slack channel. I've got a team around me that's working with clients every single day slack messaging them, what do you need? What are you working on? Where are you stuck? Send me your outline, I'll take a look at it. And I've just found for us, it allows us to make a much bigger impact when we can help more teams. So the big difference is going from that sort of, you know, working from the kitchen table, single person coaching operation to actually having a company that has system and repeatability and ability support customers all over the world pretty much every day.
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Andrew Verboncouer: Yeah, you mentioned something before, you know, one of the kind of initial ideas or I guess, you know, in the startup house, you were seeing people work on a product, and they were focusing on the features and they were focusing on the product. And I think that, you know, from our standpoint, we see that a lot with people that, hey, if I just build it, you know, they'll come. If I just, I guess, kind of contrast that to your, your prep before you went full time taking a look at, hey, if I'm gonna, you know, be able to leave, I need to start mitigating some of the risk by gaining clients, I need to build a funnel, I need to prove that people are interested in this and you know engage, you know, engage with you the way that you're designing your services and, and that sort of thing. And I think when I think about jow some startups missed the mark and end up failing. It's because they, they focus so much on the product and not enough on the people and the problem that they're having. Do you see that quite a bit, you know, inbound when when you're looking at clients to work with, and maybe you kind of build that into what's, what's one of the biggest mistakes you see startups make when it comes to lead gen or sales or?
Scott Sambucci: Yeah, so a lot of mistakes that come to mind - building off of what you said, Andrew, I think the single biggest mistake, especially the earliest stage of a startup, so when we think about a startup's journey, we tend to group startups as the one big bucket, you're all, it's your startup. Well, that's not necessarily true. It's like saying all kids are, you know, the same. Well, they're not there's first graders and second graders and third graders, and they learn different stuff as they go. And so I think about the life of a startup in three main phases - there's startup - truly like get out of the garage, build your first MVP, start selling your thing, start selling your stuff and get your first 10 paying customers. You're just literally trying to get what I call problem product fit. There's a lot of talk about product market fit. Yeah, there's a market out there and our product solves a problem for that market. Before you have product market fit, you gotta get the product problem-fit like, does somebody have a problem that they're willing to pay us money for, to use this thing that we built? That's like true startup phase. Then we move into ramp up which is okay, now we have a couple couple customers, we got revenue in the door, we gotta get some repeatability in how we generate leads and how we convert deals and how we price that and how we service that. So that's phase two as we go from start up with phase one to phase two, which is ramp up. And that brings most companies to about a million or $2 million in revenue. And then it's scale time, then it scale up phase phase three, and that's getting from one to 10 or then eventually from 10 to 100. And so, for what I see the most the biggest mistake is those earliest stage companies, as you said, Andrew, they build this product and they take a very product lead lead sales approach, meaning that they're, you know, everything from their lead gen and their outbound messages are all about, hey, we built this product. And the product does this or we have this platform. We just had this conversation with one of our clients the other day where I said, Well, how are you explaining to people what you do? And they said, Well, we told them that we built like a continuous improvement platform. So what does that mean to somebody? It doesn't mean anything. Continuous improvement platform is just as ambiguous tech thing that people feel like came from the show Silicon Valley. And so like, we've got to get away from the product. Like your customers your prospects, they don't care about your product, they care about their problem. And so that's number one. They care about their problem number two, they care whether or not you really understand their problem. Can you talk about their problem in their words in a way that makes them feel like you are an authority in this problem that they have. And then step three is can you show them how you're going to help them solve your problem? Like, you're going to help them solve their problem? And oh, by the way, you happen to use your product to do that. So the product is actually the last part of the sale, the first part of the sale is getting really clear on who are the customers that have the problem you solve? Are those customers problem aware? Are they looking for a solution? And do they feel like you're the kind of person that can help them solve that problem? If all those things are true, then the rest of the sale is really easy. But if you go with the opposite approach, like we built this product, the buttons are blue, we have this integration, we're a YC, a Y-Combinator company or we're funded by Andreessen Horowitz, like nobody cares about that stuff. They only care about I've got this problem. Can you solve it? If you can, let's talk. If not, delete.
Andrew Verboncouer: Yeah, I mean, I was trying to think of an example there of you know, if you take like Gatorade, for example, I think what does it say says thirst quencher or something, right? There's a problem someone has they want to go further faster. And I know there's been some adaptations about Gatorade, you know, over time, but when it was originally developed and with the Florida Gators, which is why it's called Gatorade, you know, they didn't say, hey, it's water with sugar in it, come buy it, right? There's no there's nothing about who it helps you become or what it helps you do, or the evolution of how it helps you today in the, or in the problem you're having, you know. So if you think about product positioning, it really is about that problem and how you can speak their language. You know what I mean? It's so important. Otherwise, you missed the mark. You could say the same thing. But but really misunderstand I think, learned this through one of your workshops that you said is really there's four conversations that happen and you may have gotten it from someone else. But you know, it always sticks with me where, you know, there's what you said, there's what you think you said, there's what they heard, and there's what they think that they heard. And those are all different conversations that happen at the same time. And so you If we don't use the words that bring consensus and understanding between your company and how you can serve somebody, it's gonna be hard to convert, it's going to be hard to get those calls scheduled even.
Scott Sambucci: Yeah, I'm a huge I really like using the consumer base world for examples, because it's so clear and acute. When you see it. You mentioned Gatorade, or Nike or Apple or any of these big brands. The psychological effect is exactly the same, in that they're selling the outcome. They're selling the aspiration. And that's ultimately what we need to do in the enterprise world. It's just a different way of approaching it because you're dealing with software and demos and 16 decision makers and stakeholders that all have to get on board with the value proposition. So you're absolutely right. I think if you're, I always tell our clients like when if you're ever lost in a sales opportunity. Maybe you met somebody at a conference, and then you talk to them after the conference, and then you've had a couple demos and all of a sudden the deal went dead. Like like what happened? I thought like the conference conversation was so great. And the booth conversation was awesome. And the demo was spectacular, it was our best deck ever. Well, the very first thing you can do is just go back and just really look at those conversations and ask yourself, like, Are we clear on the problem that we're trying to solve for this customer? Like, did they tell us that they have this problem and that they need to solve it? Because one, we could if you take the product lead approach, which is I'm at the booth, look at this cool thing. Let's get on a call. Let me do a demo. You're showing product product product, you're not really understanding the problem. So that's obvious. The obvious mistake the second mistake, which is a little bit more nuanced, which is you might be selling to the problem. But are you the one that's telling them about the problem? Versus are they telling you about the problem? Right? So if you say, Hey, we solve this problem for people like you, then you're being prescriptive about the problem and then obviously being prescriptive about the solution with your product. What we got to do when we're selling is getting all the way down to the customer - the prospect telling us - I have this problem. This is why this is important. If I don't solve this problem, it's going to cost me this. If I do solve this problem, I'm going to get "Y". It's, again, psychologically, the first step to solving any problems admitting you have a problem. And in a sales situation. And in a product situation, it's easy to be prescriptive, about, like, Oh, we saw that you have this problem. Or we solved problem, this kind of problem for companies just like you. But we got to get the customers to tell us so that they know that we understand them. And frankly, so we know that they're actually qualified to make a purchase. Because people love seeing new tech. People love seeing demos, people love seeing talking to the cool new company. But if there's no sale here, then what's the point of all that work?
Andrew Verboncouer: Yeah, I mean, it's if you were to take customers of let's say, Nicorette gum that helped people quit smoking and you go to a group of people who think it's totally fine to smoke, and they don't see a problem with it and they don't think there's any health ramifications, it's gonna be very hard to convince them that hey, one there's a problem and two you should chew this gum or take this patch or whatever. You know it's so important to like to catching somebody in the you know, that's aware of the problem that understands you know, the ramifications if they don't stop or they don't solve it. You could be speaking to the right people, but at the wrong stage of that, that journey, right, they could not be aware of the problem. And then you're, you're really looking at hey, to have to work on the top of this funnel. That's how why education is so important and awareness is so important and some of these things that are further up to build, you know, I guess the case for for people once they come down and you're really having those true sales conversations and they are qualified, that they're on the same page, right. They've been so called indoctrinated with the way that you approach it, and they understand from your point of view, you're seeing eye to eye essentially.
Scott Sambucci: Well that's that's a that's a really good example of using the consumer world. Like as you were just sharing that example Andrew, I just, I just google searched, Nicorette gum and on the Google search the the tag underneath where it says Ad, Nicorette.com, and then describes the site underneath that forget that tag is called a header tag or whatever that's called. It says along with support increases your chances of quitting and delivers pregnant relief. Like they are very clearly addressing people who want to quit. They're talking about how they know how hard it is like along with support. Yep, your cravings. They're talking about those things and tried to quit because they know like those are the people that are searching Nicorette gum, people like I want to quit, but I don't know how I need help. Versus like you said, if it just said are you smoking 12 packs of cigarettes a day and people might not care if they're smoking 12 packs of cigarettes a day. So, yeah, it always gets back to problem. And so like I said, if you're ever lost in a sales opportunity, and trying to figure out why it's stalled, or why didn't go through? Just ask yourself, do we get really clear on the problem and why that customer wants to solve it?
Andrew Verboncouer: Yeah, I think part of that I'm not looking at the same, the same title tags as SEO. But I think part of that, too, is just understanding that somebody who's choosing Nicorette gum has either been referred by somebody who has maybe aware of it, or has tried to try to actually quit on their own right, and they know how painful it is. I think a lot of that, you know, in software, you want to make sure that people are investing their own time, their own reputation, their own money in trying to solve some of those problems already, by looking at substitutes looking at, you know, how they're using Excel spreadsheets, how they're using other things to really solve that problem to prove that it's painful enough that they're aware of it. They tried certain things they've got buy in from their company and other solutions. Maybe that missed the mark. And now You kind of have this opportunity where they're aware of it, they've tried other solutions or other things in the market that haven't worked. And they're kind of looking to you. So when, as a startup, as a SaaS company, you come to them and you're talking about the features, you're gonna miss the mark, because you're not talking about the pain they have, or the problem they have, that they can really are really close to.
Scott Sambucci: Yeah, and that's, that goes back, again, thinking about, like, where most companies fail with selling most startups in particular, is number one, it's the problem but then number two, as a way to remedy that if you have a lot of deals in the pipeline, and you're finding, okay, all these deals are stacking up. I've got a big pipeline, but nothing's converting. I think the tendency is to say, well, maybe if I just offer him a price discount, or give him a really great deal, or I'm trying to push the deal through to conversion, what I think is the late stage of the sale and I'm trying to do something to get them to take action. Chances are, there's nothing we can do to motivate them. The real problem is probably that we didn't qualify them the right way earlier in the sales process that maybe there really isn't urgency here. Maybe they're seeing that yea, they're problem aware, like they know this thing is costing them time or money with using spreadsheets and manual process. But yeah, it's a problem. But it's not a huge problem. For us, I remember being at one of the the lenders that we worked with it blend early on, I was in a in a room with a couple C level executives, and they were talking about other places to implement our software within the company. And they were talking amongst themselves and they had, they basically had like a whiteboard where they listed out a bunch of different situations, places in their company where they thought we might be able to help them. And one of the executives said, well, what about this and then explain the problem. And the second, the chief risk officer looked at it and said, You know what, that's only a $10 million problem. That's not a now thing. And I will never never forget, hearing, that's only a $10 million problem. It's not a now thing. Because it just wasn't the priority for them. They had a bunch of other problems that were hundred million dollar problems. And if you're selling to a big company $10 million problem just may not be a big problem for them right now.They might be aware, they're certainly aware they have this problem. But the perception was his problem isn't big enough for us to spend time on it.
Andrew Verboncouer: Yeah, I think that's part of, you know, trying to understand more of beyond your solution. What does this person's day look like? What are they responsible for what other things are kind of in the vein of their role, their responsibilities, the problems that companies having, I think helps put it in perspective. You know, if you have a bunch of hundred million dollar problems barking at you, and you, you know, have a couple people come along with $10 million, it's big to you, but to them, you know, relative? Yeah, they're gonna solve the hundred million dollar problem, you know, their responsibilities to do that. So I think it's good to understand the scale of problems and how those stack up. What advice would you have Scott for somebody looking to, you know, start their own company? Let's say it's a, it's a b2b SaaS company and they're looking to get started. Well, how would you How would you kind of coach them? Or what recommendations would you have for how they would get started selling and understanding whether or not their customers have this problem that they're looking to solve?
Scott Sambucci: Well, I would, you know I'm biased but I would default back to first - you want to have a hypothesis around, okay, what's the problem we're trying to solve? And how do we think it needs to be solved? Have a hypothesis around that product. And even if you build something rudimentary, a wireframe or some kind of baseline MVP - I think the tendency is, I think we all know, hey, you should go out and talk to customers, do customer discovery, do customer development, learn from the market, and you should do all those things where I think a lot of founders miss an opportunity is, you know, when you have a wireframe, if you've got somebody who's there and says like, Yes, I have this problem. Yes, like I need to take action. It's easy to sort of get scared to ask for the business. Because you're like all the products not built yet, or the products not done. Like when is it ever done? So I think there's an opportunity there to really test how interested somebody is in buying the product, because it's easy for them to go Yeah, if you built that I would definitely buy it. But if you're in that conversation, you say, Great - um, so we're in the development cycle now. We're working with a great team of developers that are going to help us build the first version of this product, we think it's or we're expecting it to be ready in, you know, by the end of next quarter, we're taking pre orders now, for the first round the first cohort of users that are going to use this product because the first 10 customers that we have, we're actually not going to just deliver the product. But we're also going to, you know, personally consult with you to make sure you're understanding how to use it, we're going to show you how to use the data, we're going to come do workshops on site, teach your team. So yeah, you're buying the product. And you're also going to get all of our expertise. Now, because we're going to be doing a lot of that alongside buying the product, we can only support 10 customers this year. So you're in this sense, you're using scarcity, as a way to show like, Hey, I'm not saying I need your credit card, just because I want to get your credit card, you're saying like this is real scarcity. We can only support 10 - product's gonna be ready in three months, we've got a really clear roadmap on it. So if you want to be one of those 10, then what's the best way for us to get a deposit from you? Or who would we talk to about getting a contract in place so that when we do launch, you guys can hit the ground running and be one of those 10. And I think it's just a matter of like, ask for the business, because that's that's the only way to truly know - and economists have proven this - the only way to know whether or not somebody is really willing to pay is to ask them to pay. And then make them pay, right? Because if you only ask them to pay if they would pay, lots of people say yes. But when you actually ask for the money, that's where you're going to find out who's real. And who's not. So for anybody that's out there at the at the early stages, and you've got this product, even if it's a wireframe or an MVP, and you're showing it to people, and they're interested, and they say they would buy it then ask for the business. And start seeing whether or not they will willing to pay you money, because that's what you'll know, if you have problem product fit.
Andrew Verboncouer: Yeah, I think that's, that's great advice. I mean, we, you know, the most successful companies at the early stage that we've worked with, do that and understand that, you know, I think it's when you, you get too proud of, you know, the products not perfect or this isn't perfect, like you can sell on a concept you can sell on the value proposition that you've created that you've outlined in a wireframe or in a prototype. I think the other kind of caveat to that is just making sure that that founders understand that you don't have to discount. See, I noticed you didn't, you didn't mention, hey, since it's early, we're going to discount this pilot, what you're doing is you're adding more value on top of it, right? Rather than saying, hey, like, you're just getting the software, you're gonna get all these added benefits and this added value that's going to help, you know, you go further, and then the price kind of becomes a little bit irrelevant, essentially, because you're adding so much more value. And one thing that, you know, we've learned from you is that price is the only objection in the absence of value, right? So if you can provide great value, that's super important. And, you know, we preach this to our, our clients, who when they come to us and say, Hey, I have an idea, and I want to launch it, and if you build it, they'll come I guarantee it. We have to pump the brakes and really understand, you know, can we, how do we test this and how do we take credit cards essentially. So, you know, b2c we're taking, we're putting forth landing pages, we're running Facebook ads, we're running email tests and really try to engage people so that they'll prove that they'll part With their money, because, you know, as you said, that's one of the only ways to actually guarantee the behavior that somebody says, you know, they'll, they'll lie to you with the best intentions.
Scott Sambucci: Well, so great story about taking credit cards are the founder of Altos Research, guy named Mike Simonson. And he was telling me that his first sale, he was working from Red Rock Cafe in Mountain View, California. This is, you know, going back to whatever, 2010. And he was calling real estate agents about this product he built. And somebody said, Hey, this looks cool, like how much and he's like a 50 bucks a month, just like he had never thought about the price question because he never gotten that far. And the agent said, Great. Sign me up. So what do you need, like a credit card or something? And he goes, Yeah, so he just took out a notebook and wrote down the guy's credit card number on a piece of paper. And then after he took the credit card, then he figured out well how the hell am I going to process payment I guess that's when he set up PayPal and processed the payment. And so like you don't have to have this fancy price engine and all that stuff built out. And to your to your point about discounts. We just had this in a coaching call this morning with a founder who's going through his first 10 customers right now. And we talked about like, should I discount? Should I even ask, should I call her an early bird discount? I said, No. What we do is you say, look, here's the price. Here's the implementation, you know, what's going to cost to implement? Here's the per usage fee. Here's the dashboard, fee, all that stuff. And he said, Well, what if people like later on find out that I moved up prices? Are they going to want the discount, the lower price? And I said, no, what you tell people is like, this is the price today. This is the least expensive it's ever going to be because I already know in six months time, at the end of this year, we're going to be at least doubling or tripling prices. And so we're offering this to you now because we want to know who the fast movers are in this market. We want to work with people like you. If you want to take advantage of this fast member discount, then you can do that. But these prices are only good for the next 60 days. And after that we're going to we're already looking at price increases. And ultimately at the end of the day to your point about value is like when you solve this problem, you're going to get all this other outcome in terms of revenue and more hospital beds filled and all the other problems they saw which is a huge downstream revenue effect for them so yeah, the price conversation is really about what value are you creating and that value you're creating really goes back to what's the problem we're trying to solve? If we solve that problem, what do you get? If I help you get there then you should have no problems whatsoever paying the price that I'm asking you today.
Andrew Verboncouer: Yeah, no, that's great. So Scott, where can people follow you and learn more about Scott, sales qualia, all the things.
Scott Sambucci: The best thing to do I always point people, you know, pretty 1999-ish, but like, hey, go to the website. And the reason I tell people go to our website, which is salesqualia - qualia.combecause right at the homepage, there is a place where people can download a copy of my most recent book. So I've written three books now. And the most recent one is called stop hustling, start scaling, how to build your b2b startups, repeatable revenue using the cue framework. So it's a book that I published in June of last year. And if people want to get a copy, the easiest thing to do go to the website, click on the link that you see in the middle of the homepage. And you can download an entire PDF version of the book. It's not like free copy plus shipping. It's completely free copy the PDF and so they give you a chance to check out what we've got on the website plus read more about how we think about the sales process and how we build that with our clients every day. And so that's what I'd say you do go over to salesqualia.com.
Andrew Verboncouer: Yeah, that sounds great. I recommend you do that. I was telling Scott before we hit record here have gotten quite a few copies of the hardcopy book and given away to friends and, and founders I know that are looking to create a framework and a process around their sales and really how to think about, you know, how do they treat their product as a business and sell first and build the product as they go. So, thanks again, Scott. Great chat. And as always, I appreciate you coming on the show.
Scott Sambucci: Yeah. Dude, thanks for having me. I really appreciate the opportunity to talk to your, your tribe of people out there. And if I can help anybody, please let me know.
Andrew Verboncouer: Thanks for listening to Seaworthy. Connect with us and ask questions on Twitter @seaworthyfm. Make sure you subscribe and if you enjoyed it, leave a review on iTunes. Sail forth and make waves.
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