Salespeople are often considered ‘black sheep’ when it comes to selling a product or, with a founder raising investment, proving the saleability of your idea. At best, they’re a necessary evil; at worst, they’re a “colouring-in department.”
But the truth is, to attract an investor, you’ve got to tick a lot of boxes. Two of those boxes are ‘Make them believe in you’ and ‘Give them a vision to get excited about.’
You won’t achieve that unless you have an excellent understanding of sales and marketing strategy. Without that sales and marketing acumen, it’s going to be impossible for you to raise investment.
The billionaire entrepreneur and venture capitalist Peter Thiel once said, “The most fundamental reason even businesspeople underestimate the importance of sales is the systematic effort to hide it at every level of every field in a world secretly driven by it.”
In our experience, Peter Thiel’s right.
Let me tell you a story.
One of our clients had a venture capitalist on board and was surprised when the VC suggested a merger between our client and another of the VC’s portfolio companies. The VC proposed this merger because one of the companies had market-leading tech but couldn’t sell it, and the other had a fantastic sales and marketing system with a constant pipeline of clients but an inferior product.
So, the VC wanted the company with the sales expertise to take over the company with the much better product.
Hold on; isn’t that ‘backwards thinking’?
If you’re an entrepreneur who doesn’t take sales and marketing seriously, you’d probably think so. After all, it’s the innovative product that’s the star of the show. If your product’s ground-breaking enough, surely it will sell itself.
Unfortunately, no. It doesn’t matter how exceptional your product is; without an equally exceptional sales and marketing strategy, your customers will never find out about it. If you’re lucky, maybe you’ll pick up a few sales through word of mouth, but you’ll never find an investor willing to back you because a few sales here and there are not going to keep you in business.
That’s what the VC had learned, and they’d grown tired of pumping money into a superior product that nobody was using. That’s why they’d decided to back the superior sales team instead, because the sales team had the expertise and client network to get the market-leading product off the launch pad and into the stratosphere.
So that’s what the VC did. They invested into our clients’ business so they could buy out the company with the better tech and take control of their assets. This didn’t just include the tech; it also included the cash that the other company already had in their bank account from their previous investment round.
Think of it like ‘Survival of the Sales-Fittest’
From the VC’s point-of-view, there was absolutely no sense in continuing to back the business with the better tech in the hope they would suddenly, magically, get more adept at sales. Like all serious investors, they knew that if the business couldn’t quickly scale users, the venture was dead in the water, and the marvellous product would sink without a trace.
Investors are focused on receiving a healthy return for their investment. They aren’t interested in backing brilliant tech that will sink to the bottom of the ocean. Unless, of course, the brilliant tech is a submarine that’s meant to sink to the bottom of the ocean. But, even then, they’ll want to be confident you’ve got a watertight sales and marketing strategy so that plenty of customers will want to buy your amazing submarine.
As far as our story is concerned, our client now has both — market-leading tech they didn’t have to build and a sales pipeline of people to sell it to. Even more importantly (because if they hadn’t found the right VC, none of this might have happened), they landed an investor and raised the investment they were looking for.
Here’s the bottom line:
The sooner your start-up can prove your ability to market and sell your product, the more likely you’ll be to raise investment and ultimately become successful.
The biggest killer of start-ups, after they’ve accessed capital, is not being able to market and sell the product they’ve created.
You could create and build the world’s most incredible supercar with innovation and tech that’s so superior it leaves every other supercar sputtering in your dust, but if you can’t find a customer who’ll put your supercar on the racetrack, what was the point?
Pre-launch, you must be able to clearly explain to your prospective investors exactly how you are going to take your product to market.
Post-launch, you must be able to comprehensively explain your marketing and sales strategy and have the confidence and ability to put that strategy into action to deliver the next phase of scale.
It doesn’t matter how brilliant your innovation is. It’s only when you know how to sell and market your innovation that you’ll truly become an investable entrepreneur.
To find out everything else, you need to know about becoming an Investable Entrepreneur, you can download a free copy of my bestselling book here.