
A Leader Struggles to Sell Software Meant to Aid Sales - Thrymr
http://www.nytimes.com/2014/08/21/business/smallbusiness/yeswares-matthew-bellows-on-his-ironic-challenge.html
======
bacheson1293
I've been in this exact same situation. I was writing software for a
telemarketing company. Initially business was booming using a similar model to
the one outlined in this article. In short, the owner made some questionable
financial decisions and the company went bust. I was now out of a job but I
left with the experience of creating and maintaining the technical side of a
multi-million dollar SaaS company. Moving forward I was determined to be my
own boss this time around.

I developed a SaaS for marketers and constructed a basic sales funnel
incorporating telesales.

What I quickly found out is that my niche(marketers) is comprised of
technical, high-level users. The same scripted sales approach that made my
last company extremely successful was alarmingly unsuccessful when trying to
close deals with marketing agencies and consultants.

Eventually I bootstrapped to over a million in sales by trimming down to a
handful of coders and a single marketer. We implemented a trial period and let
the software do all the heavy lifting. Not only does this reduce overhead and
complexity but it also attracts the "right" type of customers. Customers that
need convincing typically don't stick around long. Churn is SaaS kryptonite.

~~~
blowski
> Customers that need convincing typically don't stick around long.

Not saying you're wrong as I have no idea, but this seems counter-intuitive. A
customer that puts more thought into buying the product seems more likely to
stick around than one which buys on a whim. Can you give more detail about
that?

~~~
tpeo
In microeconomics, there's the concept of a "marginal consumer". When a demand
curve is formed, it's so by mapping all the consumers' reserve prices (i.e.
the maximum they're willing to pay for a product) on the y-axis and the
quantities demanded on the x-axis (so the first guy is willing to pay $100 for
1 unit, the next one $98 for 1 unit, etc). The marginal consumer is the guy
whose reserve price is exactly the the market price of whatever good we're
talking about. So whenever the price of that good goes up, he stops buying it.

Now, if reserve prices correlate to the urgency and magnitude of consumer
needs, the majority of consumers would be the guys who buy on a whim (if the
demand curve is steep enough). They don't buy it because they want to, but
rather because they need to.

tl;dr deong is right

P.S. If this still seems counterintuitive, consider that a customer asking too
many questions doesn't necessarily signal he's interested in it. On the
contraty, it could be that the more clueless he is, the more likely he is to
ask questions as he didn't do any research in the first place.
Example/anedoctal "evidence": Whenever I bought computer parts, for instance,
it was mostly a silent trade, because I've picked them all beforehand. The
only things I asked about were those I didn't bother to research.

~~~
blowski
Interesting, I hadn't thought of it that way before. Thanks for the
explanation.

------
BorisMelnik
"...Step in himself as vice president of sales and devote the necessary time."

If you are a founder and your company is struggling to bring in revenue/sales
it doesn't matter if you call yourself VP of sales or CEO of the world, _your
job is to make sure sales come in._

I've been in business for 5 years, been profitable for 2. Every single day is
devoted to sales. I have a VP of sales and his job is dedicated to sales 60
hours a week. That still isn't enough.

No one is going to manage your company's sales funnel the way a founder does.

This is b2b sales, which is a totally different world than b2c sales. Business
owners are very hard to reach, convince, and keep on the phone. In my
experience the best people to hire for this job are the people that have a
record of bringing in revenue in your niche. Your reps have to beleive in your
product. This NYT article is not going to help their confidence. He is really
going to need to go in there and make a huge Glen Gary speech to his sales
people to get some blood pumping through their veins.

~~~
sedev
If you're thinking of Alec Baldwin's "Coffee's for closers" speech when you
say "a huge Glen Gary speech," I hope you're aware that most people view that
speech as "this is what an abusive boss looks like, if you see this behavior,
quit ASAP."

Most people including the highest performers, who are generally aware of not
having to put up with that shit.

------
lubos
So they have 100k free users? If we assume freemium model can convert 5% of
customers, that's 5k customers paying $20/mo. That's only $100k monthly
revenue. A bit low for a company with 46 employees.

Couldn't it be that CEO of Yesware just loves to employ people and the company
is overstaffed?

And why does freemium company need sales people anyway? The whole point of
freemium is that the product itself should be acting as a sales person and
users should be naturally upgrading once they hit paywall (e.g. Mailchimp,
Dropbox)

~~~
patio11
They appear to be doing hybrid high-touch low-touch, which is common in B2B
SaaS. Try modeling it where 10% of customers are paying $Xk a month. Most of
them will require sales attention to close.

------
fookyong
For a long time I went back and forth on whether I should do a freemium plan
for my SaaS startup[1]. It was a difficult decision considering many of my
competitors are freemium and I see they enjoy certain benefits from that e.g.
a large userbase of fans that help them to market the product indirectly.

I finally decided against it based on:

1) Free users would increase support costs / required resources, possibly to
the detriment of support quality for paying customers.

2) My SaaS startup is a "lifestyle" business and I'm fine with a slow, steady
growth of exclusively paid customers. I don't have an investor breathing down
my neck looking for "explosive" growth.

3) It complicates the product roadmap. It's much more focused to have a paid
product that gets incremental upgrades, than to have to manage between free
and paid feature-sets and continually evaluate whether a new feature is
something that everyone gets or just the paid folks. Makes my head spin just
thinking about that.

4) Revenue is a pretty nice thing to have.

[1] [http://www.beatrixapp.com](http://www.beatrixapp.com)

~~~
rokhayakebe
re:2

I think this is extremely difficult decision to make if you have moderate
success. If you can turn turn $0.30 in profit of out of every $1 invested, and
it scales, how do you make the decision to remain boostrap and earning $2M
over 7 years vs. raising money and making $100M by year 5.

------
taariqlewis
Wow. So umm..Where's the discussion about the marketing operations? Ermm, if
your positioning is "FREE", then ermm....you MAYBE have a prospect
communication problem reflected in your sales failures, not just a sales
problem due to a VP of Sales role req.

Why do sales people keep making this mistake over and over again? Marketing is
just as important to prepare the funnel as sales is important to close the
deals. Why is the CEO not calling his marketing team to task or why is he not
calling himself to task for lack of an integrated sales AND marketing
operation?

I love Yesware for B2B sales. I just don't pay for it because my
Salesforce.com and Marketo marketing teams are grinding out marketing comms
and engagement events that make my head spin and extract $10K/month budgets
from my marketing budget. I've yet to hear from the Yesware marketing team. A
webinar maybe?

------
mattm
As a bootstrapper who just launched a product in this space[1], I was VERY
strongly advised not to implement any freemium model.

I don't know their history, but from the article, it seems like they started
out free to get the massive user base and were hoping to convert free users
into paying customers with the sales team they hired. Once people are used to
something for free, it's very difficult to get them to pay. If there's more
stories like this, I wonder if VC's will start to demand less freemium-type
models.

[1] [https://touchingbase.io](https://touchingbase.io)

------
rplnt
The title alone reminded me of this: Book About Kickstarter Fails to Raise
Enough Money on Kickstarter

[http://mashable.com/2012/09/30/kickstarter-book-
fails/](http://mashable.com/2012/09/30/kickstarter-book-fails/)

------
cmdr_shprd5280
I feel bad for the sales team... this seems like a really terrible way to find
out and/or broadcast that you're probably fired.

~~~
jbigelow76
Since we are teased that the selected option and results would be revealed
next week the axe probably fell a few months ago.

------
baudehlo
This comes down to two key issues in sales: the obvious one is ABC. Always be
closing. And if your sales people aren't closing deals then you get rid of
them. The second is ABCD. Always be collecting data [1]. You need to collect
data on sales constantly to evaluate productivity and have input into the
process. It's simple if you follow those two steps.

[1] [http://www.idealcandidate.com/always-be-collecting-data-
the-...](http://www.idealcandidate.com/always-be-collecting-data-the-new-abcd-
of-sales)

~~~
toomuchtodo
I'm surprised not every startup does AB testing, testing of pricing cohorts,
etc.

"In God we trust; all others must bring data." \-- W. Edwards Deming

------
verticalflight
Clean house first. Take the team down to 3. Get rep productivity back on
track.

Then... consider bringing in a sales VP that can responsibly scale.

------
haversine
Is it a fluke that when I clicked the NYT link from HN, I hit the paywall, but
when I clicked it from NewsDiffs ([http://newsdiffs.org/article-
history/www.nytimes.com/2014/08...](http://newsdiffs.org/article-
history/www.nytimes.com/2014/08/21/business/smallbusiness/yeswares-matthew-
bellows-on-his-ironic-challenge.html)), the paywall disappeared?

Or has the paywall simply been deactivated?

~~~
thunderbong
I've found that disabling javascript let's you read the article without the
paywall

~~~
anirudhan
or you can simply keep pressing 'esc' a few times once the initial page is
loaded.

------
ckluis
yesware, getsignals, toutapp, marketo… the list goes on - fairly crowded
space, but pretty sad they haven’t been able to sell it well.

I would offer an alternative solution - go back to those companies where the
employees made the sale and hire a few of those people. Hire a CMO who is in
charge of marketing/sales and create a coordinated attack which primes the
funnel and holds both sides of the same coin accountable. Frankly
getsignals/toutapp/marketo - all have killer blogs which I can’t remember
reading a Yesware blog.

------
Quizz
I'm using Yesware freemium and think it's cool for personal use but have not
experienced the 'must have' epiphany yet to upgrade.

~~~
PeterisP
This is a key issue for freemium companies - your free product needs to be
good, but there needs to be a clear, sufficiently large audience for whom the
free product would not be sufficient and they'd need to buy the upgrade.

------
sarciszewski
Fucking paywall!

