
Lecture 19: Sales and Marketing – How to Talk to Investors  - TheBiv
http://startupclass.samaltman.com/courses/lec19/
======
tptacek
The first 20 minutes of this, with Tyler, are the best thing I've seen in this
lecture series so far. And, in particular, this slide:

[https://www.dropbox.com/s/axgpmehewplt7hs/Screenshot%202014-...](https://www.dropbox.com/s/axgpmehewplt7hs/Screenshot%202014-12-02%2019.39.10.png?dl=0)

... has to be a contender for the most valuable single slide they've shown in
the course. It is dense in an almost Tufte-sort of way:

* It exhorts you to diligently follow up with prospects

* It gives you an idea of how much work it takes to convert a prospect

* It gives you permission to follow up when prospects go dead(!)

* It reassures you that this is what actual, real, live prospects really look like

* It tells you what you're in for with real prospects and so _shows_ instead of simply _telling_ why you need to get good at lead qualification.

So great. Could go on and on. There should be, like, an "email (no response)"
tattoo we all get. This was outstanding. Thanks for publishing it.

The "talking to investors" stuff is good too. I liked Michael Seibel's One
Simple Trick for arranging first meetings with investors to create
competition. And Dalton and Qasar's mock investor pitch was funny --- but if
they wanted full verisimilitude, they'd have ended the worst conceivable pitch
with the investor saying "We're excited! We definitely want to invest!"

~~~
aleem
Couldn't agree more. This talk crystallises so many wonderful gems and this
slide is the essence of the sales cycle.

I had my largest client say flat out "no" to me twice during what was an 8
month negotiation for our news publication software. It was quite testing, we
had a lot unanswered emails and I got a wonderful education in sales.

Perseverance pays off but don't let it turn to desperation. That slide was 3
times worse for me, however, at some point during our sales process I had
distilled the strategy down to focusing on "positive, forward momentum". That
meant that if the conversation went quiet for a few weeks, momentum was lost
and the next conversation took longer (this happened to me) and there are good
ways to mitigate this. If the client has queries you are unable to satisfy,
the momentum is working against you--internal discussions are now about how
your product is not feasible or inadequate and that kills momentum and moves
the pendulum against you. This too happened to me and we remedied this by
adding conditional clauses, as Tyler points out. Any sort of negativity is
contagious, whether its coming from you or from the client. It latches on to
all people involved. You must nip it in the bud, always.

------
rajens
I think it would've helped to separate the sales/marketing form the how to
talk to investors portion, as this lecture seemed to pack a lot of material
into a short period.

Having said that, I think the sales and marketing part was done pretty well.
It didn't cover a lot of sales tactics, but the fact that it was highly
focused on the $0-1M in revenue portion of a company was important. There is
lots of 'startup' sales advice out there that is more focussed on scaling
sales and sales process, which is generally more useful for companies greater
than $5M in Rev.

Anyhow here are 33 if my top quotes from the lecture published here:
[https://medium.com/how-to-start-a-startup/33-quotes-on-
start...](https://medium.com/how-to-start-a-startup/33-quotes-on-startup-
sales-marketing-and-how-to-talk-to-investors-2deddc7b01d3)

~~~
JoseVigil
They both tackle the same spot in time, the crossroad. Blow or getting funded
/ making revenue. You are right, but that is why I think they are bundeled.

------
elvis635
Thank you Tyler for your talk (and also to Michael, Qasar and Dalton), your
talk is probably the best one I've seen during these 19 lectures.

I've a question for you (and to any other company which has sales reps), how
do you pay sales agents? I'm reading a lot on that subject, and I still cannot
figure out what would be the average commission to pay to sales agents in a
SaaS/tech company world, would it be 10%? 20%? 30%? Based on every payment
(ie. recurring) the customer does, or just on the first one? With or without a
base salary and caps?

I'd love to know how you figured it out and maybe some numbers

Thank you!

------
cj
Question for Tyler (or anyone who signs contracts with their customers):

What's the minimum deal size that you'd want to have a contract with a
customer? If you're a $50/month SaaS, it probably doesn't make sense, but I
could see the benefits as you approach $50k+ / year deals.

Is the primary benefit to lock in the customer (ie. annual commitment)?

~~~
patio11
It is at about $10k ACV for negotiated terms, and driven primarily by cost
concerns. Below $10k, the cost of contract negotiation and signing blows out
the sales model. Your reps would need to close ~25 deals a month, and that is
hard when redlined are flying back and forth.

Contracts of adhesion you'll have from $1.

The primary benefit of negotiable contracts to a SaaS business is unlocking
deep pockets which require specific, custom language to buy anything (or
anything "expensive.")

Edit: For bonus karma, spot the error I made while posting before first
coffee.

~~~
peterjancelis
Why would your rep need to close 25 x 12 x 10K ACV = 3 million USD of customer
value each year to make it profitable?

Shouldn't 25 per year suffice?

~~~
patio11
This was indeed the goof-up. If $10k is a _typical_ contract, you're probably
looking at 40 to 50 sales a year to hit quota. If $10k is the minimum buy-in,
25 a year is _probably_ fine.

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itazula
I enjoyed Tyler's lecture greatly. One of the side-benefits of seeing lectures
over the course of the series is to see which presentation styles work, and
which don't.

------
JoseVigil
"fund raising is not equal to sucess" my best quote

~~~
raminassemi
If that's your favorite quote, maybe you'll like this post from Alex Turnbull
[https://www.groovehq.com/blog/turning-down-
vc](https://www.groovehq.com/blog/turning-down-vc) where he laid out his
reasons why he said no to a $5 million funding offer.

------
Michie
Anybody have an idea where can you find the YC open source template document
Tyler is talking about? Thanks.

~~~
greattypo
Hi Michie, Tyler here. Last I heard YC is working on the official docs and
hopes to have them up soon.

But... if you need a copy sooner, feel free to send me an email (tyler at
clever).

~~~
Michie
Thanks so much Tyler. I'll do send you an email. Thanks for sharing your
experiences too. Love your talk.

------
smzia
Here is the clipped version of lecture #19 for those who want to skim through
the video.

[https://clip.mn/video/yt-SHAh6WKBgiE/](https://clip.mn/video/yt-SHAh6WKBgiE/)

------
godzillapm
Sorry to be a party pooper but this is sales 101 - nothing special either
about the talk or the slides. Maybe interesting for people who has zero
experience. I won't drop a dime for this education - sorry if I am being
harsh.

~~~
w1ntermute
> I won't drop a dime for this education

Then I guess it's a good thing that it's available to you completely free,
isn't it?

