

Why Aren't Salespeople Running Software Companies? - ceeK
http://bostinno.streetwise.co/channels/why-arent-salespeople-running-software-companies-seriously/

======
richardjordan
We tried this before, as an industry. It didn't work. There's a reason
investors pattern match away from sales people as founder & CEO of a startup.
Sales people are often too good at selling themselves and not so good at
getting product out the door. Selling ahead of the curve right up until the
point you've burned your market with missed ship dates.

Having done both sales (taken product to market leading position from scratch)
and development, I am convinced it's easier to add sales leadership to take a
sold product to market than to add developers and fix a badly built product
that happens to have a good sales leader running the show. IMHO ymmv.

~~~
chriswilliams
Hey Richard,

I disagree. "Lean startup" (I've only skimmed, not read) is all about teaching
coders to sell. Correct me if I'm wrong, no code should be written unless
there is market demand.

The challenge is not selling ONCE you have a solid product, it's going from
NOTHING to something.

Chris

~~~
hluska
First, if you haven't read it, how do you know what it's about??

Second, did you skim over anything about the build-measure-learn loop? If so,
let's say that you have an idea, build a first (completely fake) version, and
get it in front of people. The next step would be to build something that
works, right? If you're completely non-technical, how do you find people to
take you to that step (and to do it elegantly enough that you can not only
learn, but build on top of what you have learned)?

~~~
lukethomas
The point is that unless someone is paying your bills, you need to charge from
the very beginning. It's supply/demand equation - your goal from the beginning
should be to determine the demand, make sales, and fill the need with your
offering.

~~~
hluska
I'm aware of that.

I just can't imagine how a wholly non-technical salesperson could go from
validating there is a demand to actually fulfilling the demand without either
finding a technical co-founder, becoming technical or else winning the
freelance lottery.

------
apapli
Seriously, this article made front page from someone who openly admits he is
not from the software industry yet questions how it operates?

Simply put: Software companies aren't all the same. Some sell to consumers
(B2C), others to businesses (B2B), and others sell to both.

You won't find many B2C companies with sales people, due to the cost of sale
outweighing the return from one customer. Oppositely you won't find many B2B
companies without them, as cost of sale is built into the price (read up on
high vs low involvement products if you need to know more). B2C's typically
rely on marketers instead, as they can help spread a message across a broader
prospect base, keeping the cost of sale down.

Sales is a set of activities a person does to compel someone else to sign a
contract. So all those B2B startups probably do have sales people (eg people
selling), just that they may be the founders or developers helping prospects
with the hope of them converting to customers.

Finally, the reason salespeople aren't running software companies? Depends
what you mean - no they may not be founders. But once a company is growing,
and trying to grow faster - show me which company doesn't seek advice from
their sales and/or marketers on how this should be achieved.

~~~
chriswilliams
Apapi,

Agreed, all software companies are different. There is also a huge distinction
between software-to-software sales (where the product design is more
important) and software-to-outside-world sales. Most of our customers pay with
CHECKS, yes, checks. They aren't software people so the design doesn't need to
as good in the beginning.

Chris

~~~
craigching
>> Agreed, all software companies are different.

To a certain extent, there is a _lot_ in common in the software industry
whether you're selling to the _consumer_ market, the _enterprise_ market or
the _smb_ market.

>> There is also a huge distinction between software-to-software sales (where
the product design is more important) and software-to-outside-world sales.

I'm not 100% sure I understand, are you talking about _consumer_ software
(software-to-outside-world) and _enterprise_ software (software-to-software
sales)?

Because _marketing_ can be different, agreed, but _development_ of the product
is not that different. Unless you're trying to talk about _internal_ apps vs.
_products_ ?

>> Most of our customers pay with CHECKS, yes, checks. They aren't software
people so the design doesn't need to as good in the beginning.

Not sure _how_ someone pays for software matters, care to explain?

Sorry, but you don't seem to really understand software _product_ development,
neither from the sales side, the marketing side, nor the engineering side. Not
from the post itself nor from your comments. But I guess you say that up front
so "it's ok" ... ? ... I guess?

------
orangethirty
Yes, you should launch without a product. Yes, you should get orders. Yes to
all of that. But you are missing an important thing. A lot of _world changing_
companies out there started without a business plan, much less a sale. It was
about trying to see what could be done with X. Sales people don't get this.
Tech is not only about making a quick buck, but about creating new things
altogether. Sometimes, those new things can't simply be sold from the start.
Sometimes they are not even defined. Just an idea.

~~~
bane
_A lot of world changing companies out there started without a business plan,
much less a sale. It was about trying to see what could be done with X. Sales
people don't get this. Tech is not only about making a quick buck, but about
creating new things altogether._

There's an interesting anti-pattern I see in business time and time
again...it's the company that's run as follows:

1) Start with a successful product (regardless of how it happened to become
successful) and put a top-tier MBA guy in charge

2) Slowly fire or alienate all of the engineers who had anything to do with
the initially successful product (too expensive!), replace them with more
sales guys and/or very cheap and incompetent "maintenance engineers" so
abstract engineering vs. cost numbers can show diligent stewardship of the
product

2b) Stop innovating entirely

3) Squeeze the product for cash like a vampire trying to squeeze blood from a
stone

4) Eventually the product momentum runs out and the sales stop coming in

Making a new product is both hard, and expensive, it's understandable that MBA
types want to try and recoup that _and_ make a multiplier on that initial
investment. They're _allergic_ to putting huge investments back in for a round
2 of innovation.

It sometimes works (see Oracle), but usually ends up with a failed company
being sold off for parts.

Chrysler is a fantastic example, the First Generation 300 (2004) started out
as a very popular car, selling over 110,000 copies in it's first year. A bad
merger with Daimler-Benz later, Chrysler ended up in MBA-tastic Cerberus's
hands in 2007. So what did they do with their almost 4 year old flagship that
was selling over 120,000 copies a year? They let it sit for 2 more years.
Nothing, no new models, no minor redesigns, no real updates. In 2008 sales
were half, then in 2009 almost half again. It wasn't until 2011 that a new
model finally came out, and it was a shockingly modest refresh after nearly 8
years and what happened? Sales almost doubled in 2012!

My point is that it's not that hard, a new front end, some cosmetic interior
changes and a fancier CD player and if doubled product sales. Why didn't they
do that at any time in the preceding few years? They were simply working too
hard trying to squeeze blood from stone.

At the risk of being influenced by survivorship bias, Apple under Jobs is the
counter argument to this. It's an example of what happens when you ruthlessly
pour resources into keeping products fresh. But somehow this lesson seems to
escape _so_ many product companies (tech or other industry).

Perhaps a better non-tech example is Coca-cola. Sure it's more or less the
same product, but Coke spends extraordinary amounts of money keeping their
brand fresh, slight changes in bottle shape, even slighter changes to the logo
and packaging, effectively putting a new front-end on their product. It's one
of the most valuable brands in the world.

~~~
sanukcm
Your analysis reminded me of an article I read a few years ago called "Driven
off the Road by MBAs"[1].

I won't give a synopsis because it is a really short article - but here (IMO)
is the key sentence and take away: _"...ultimately, moving numbers around can
do only so much. Over the long haul, you've got to invent or improve real
products and services to grow."_

The author of the article references a book written by Bob Lutz called _"Car
Guys vs. Bean Counters: The Battle for the Soul of American Business"_ [2],
which contains numerous examples of how replacing executives from engineering
backgrounds with executives from more traditional business backgrounds failed
GM as a strategy.

[1]-
[http://www.time.com/time/magazine/article/0,9171,2081930,00....](http://www.time.com/time/magazine/article/0,9171,2081930,00.html)

[2]-[http://www.amazon.com/Car-Guys-vs-Bean-Counters/product-
revi...](http://www.amazon.com/Car-Guys-vs-Bean-Counters/product-
reviews/1591844002/ref=cm_cr_dp_qt_hist_one?ie=UTF8&filterBy=addOneStar&showViewpoints=0)

------
rohamg
This post gave me a headache. I guess yelling BLACK! WHITE! When something is
a drab gray gets page views, but don't people get tired of having the same
arguments? Incidentally, I think engineering culture is very important- the
trick is to have engineering permeate and bolster strong sales and marketing,
not to handicap one in favor of the other.

~~~
droopyEyelids
Right on with the black and white comment. Many technology/software companies
are run by sales people. Check out Cisco or Oracle.

And if anyone wants to start a software company and run it from a sales or
marketing perspective, they're free to do so! Nothing special prevents it.

But from my perspective, the author begins to answer his own question with the
'soft skills' musing. When people without measurable skills are in charge of
things, you run a much higher risk of incompetence derailing the business. And
even one or two average-competence people in leadership positions can make any
organization inefficient.

Also, I think his point about quality being a secondary consideration to
customers should be explored more. That point is only true when there is a
high cost (be it time, money, or fear) to switching products, and thats where
you see the sales based companies succeed. Software is often easy to replace,
in relative terms.

------
magicarp
> I'm brand new to the software industry and while I know nothing about
> software...

Then why are you giving advice on how to run software companies?

~~~
giffc
agreed. It is pretty silly. When one has no experience, one should be willing
to do a little more research first and talk to a few more experienced folks.
There are many sales & marketing driven software companies. Sometimes it
works, sometimes it is a disaster. Personally, I think that the trick is
usually about finding the right balance between business, design and
engineering, not putting one on a pedestal above the rest.

~~~
chriswilliams
Giffc,

I agree it's about balance. I'm talking about ONE SPECIFIC time. That's going
from $0 in revenue to $50k, without investment.

Chris

~~~
jzukoff
No..you aren't talking about _one specific time_..or at least your article
isn't. If that were the case than you'd be talking about why salespeople
aren't STARTING companies rather than asking why they aren't RUNNING
companies.

Without a talented engineering team, a product won't be able to change or
adapt to customers changing needs and opinions.

Sure you can sell a product that isn't fully developed, and outsource your
engineering but in all likelihood you're going to wind up with a clusterfuck
of a codebase and so much technical debt that your customers aren't ever going
to see anything more than the crappy first iteration of a product.

This is all just so silly. By your logic all that is important is that you
have salespeople that can sell anything, including a crap product. Is that
really how you want to drive a company? Salespeople would have an easier time
selling a well engineered and functioning product no?

------
nhebb
I was given some advice 10 years into my career that I wish I'd heard fresh
out of college. When you are interviewing with a company, learn as much as you
can about the career backgrounds of the executives. It often dictates how much
influence your department has on operations. Not surprisingly, the worst
places I've worked had the biggest disparities between the president and the
primary skill group needed to create the product.

It wasn't that these companies weren't profitable - some were, some weren't.
They just weren't enjoyable places to work. When you have to explain or
justify things that shouldn't need explaining or justifying, it really drains
morale.

------
abc_lisper
Yeah. Well, can all sales people run businesses?

Let's start from the basic questions: 1\. How do you know X is more difficult
than Y technically. How do you trust somebody who says X or Y? Should they
sell you the idea because, ya know, you are a sales person?

2\. What makes a sales person? Ability to sell a product A? Is selling A
different from B? Do you specialize in A? How are you different from somebody
who too can sell A? Do they need a degree to do it? Can our average car sales
man do it? Yes or no, please give me your reasons..

3\. Can you give me good examples of sales people running any other
businesses? Businesses that, ya know, don't suck.

4\. Salespeople usually do well in business where the technology is mature. Ya
know, not long ago, there was this "fruit" company that was brought to its
knees by a "cola" sales guy. And there is a Seattle company that is getting
off rails slowly.

~~~
apapli
Answer to q3. Benioff (salesforce.com), Ellison (oracle), heck probably
Ballmer as well, he certainly doesn't seem to get how to run product
development.

~~~
abc_lisper
Ellison was a programmer.

Benioff was a programmer too.
<http://en.wikipedia.org/wiki/Marc_Benioff#Career>

Given the position Microsoft was in 2000, when Mr.B took charge, I don't think
their position could be much worse.

~~~
apapli
True, but I expect all three spend a fair portion of their time selling
nowadays. Sales is a collection of activities, not necessarily a full time
role.

~~~
thedufer
But isn't the article about sales people starting businesses? Those people
would undoubtably have been called programmers, not sales people, when they
started (except Ballmer, who didn't start a company at all).

------
thrush
_"My takeaways from exploring this topic and advice to other marketers that
want to have software people work for them is:

1\. Realize that you have the most leverage going from version 0 to 1.0. We're
also best suited for software products that are not being sold to other
software people.

2\. Find out how to get traction without the help of any software person by
using free and existing and doing things offline.

3\. Have very specific goals for you market tests. Also, relay on something
that is more tangible then "readers" or "users". Cash is the best kind of
market research. These two posts are great about how to test markets and get
pre-sales. Close your Sales Funnel and Sell a Product Before It's Ready

4\. Build REAL RELATIONSHIPS within your market."_

I think that you are talking more about _starting_ a company rather than
_running_ a company.

------
kozikow
I agree with some of things you say, but with some don't. I agree with the
fact that one should verify that there is market for his idea, but you don't
need to have sales people for this.

Good engineers want to avoid working at companies, where engineering
department is not on the top - on example they need to explain things, which
shouldn't need explanation, or their boss see them as cost centre, not a
profit centre and seeks to replace them by cheaper alternative. If you don't
have good engineers, innovation of your product stales and someone comes to
steal your market, no matter how awesome sales people you have.

You mention that sales people are more important in reaching phase 1.0 in B2B
companies, in getting these first 1000 consumers. Let's get two hypothetical
examples: \- Company A, which creates bad product, but sales manage to sell it
to 1000 consumers. \- Company B, which creates awesome product, but their are
no good sales behind, so it is gaining first customers very slowly. Then over
the time first customers of company B will tell their friends that product is
awesome and it will eventually reach 1000 customers and keep increasing
exponentially (these new customers will bring their friends and post excellent
reviews online). It is run by good engineers so they will analyse and listen
to their users and keep making product better. On the other hand, company A
will get terrible reputation, these 1000 customers will realize shortcomings
in the product and stop using it.

Fact that you created successful company being a sales person doesn't mean
that it is better to have companies run by sales people. One example doesn't
make it for general rule. Do you know a company run by engineers executing the
same idea to do the comparison?

You cite the fact that majority of companies fail because of lack of users
instead of lack of ability to create a product. It doesn't mean that their
failure wasn't caused by bad product - they could created something that
worked, but wasn't good enough. This fact doesn't mean that they would succeed
if they would have rock-star sales people on the board. Some ideas are just
not fit for market and even placing hundreds of sales people doing the calls
won't help.

------
chriswilliams
Hey Guys, My name is Chris Williams. I wrote the post :) If anyone wants to
connect, I would love to. My email is chris@cammpus.com

My buddy just let me know that this post was picked up ~6 month late.

I'm looking forward to addressing everyone's comments.

The reason I'm qualified to talk about this is because I started a software
company and have grown it to ~$400k in revenue and profitable in 18 months.
Why? Largely, not listening to "startup" advice, and SELLING. It's key that
this is a B2B company not selling to other software people (B2C and software-
to-software sales are much different than B2B and software-to-outside-world
sales)

Again, I'm my intent is not to insult the software industry, just say the most
of the advice seems incomplete from my perspective.

Chris

------
ams6110
What companies _do_ salespeople actually run? Amway maybe? Salespeople sell.
Executives run the company. Sometimes executives used to be salespeople, but
there are many who came by another path.

------
morgante
This article inaccurately lumps all software companies into one bucket. As
rohamg points out, he makes a black and white argument about engineering vs.
sales politics, while the reality is that this differs a lot by company.

In fact, many of the larger software companies seem to be driven primarily by
sales (including, increasingly, Google).

At the smaller companies (incl. startups), it absolutely makes sense for
engineering to be of primary importance. At this level, being able to
constantly adjust to customers' desires is essential, and an engineering
emphasis helps with that.

This also flies in the fact of the supposed arrogance of engineers. If
anything, I think sales people are the more arrogant ones: they think
customers just need to be sold on a product, while engineers understand
iterating on feedback is key to growth.

------
thedufer
I think there's a pretty simple reason that a software person is more likely
to be successful than a sales person. The software person can find sales
people - the opposite is not generally true.

If you need to hire a sales person, and the candidate sells himself, you're in
pretty good shape. He's obviously got some of the skills - he may not be the
best, but he'll be worth hiring.

If you're a non-technical person looking to hire technical people, you're
fighting an uphill battle. First, technical people are currently in higher
demand. Its hard to find them in the first place. Next, you have very little
ability to evaluate their skills. Finally, the range of abilities in technical
people is larger than in most other fields, which amplifies the problem of not
being able to evaluate candidates' skills.

------
shakiba
I guess the reason is that software companies are driven and competitive by
innovation which mainly comes from technical/product people.

------
shelf
Spelling is a factor in the board's decision

------
dshipper
It's hard for me to take seriously any article that so consistently misuses
"than" vs. "then"

~~~
fnordfnordfnord
I have to remind myself occasionally that perfect literacy isn't always a good
benchmark for intelligence.

------
thetrumanshow
It is a fairly recent development that the tech industry has acquired ways to
make building a v1.0 easier. And the salespeople are looking around now,
clearly able to tell the extent to which you can execute v1.0 with C-Level
talent, and wondering why so many companies are still run by software people.

The answer I believe is: because this all used to be much harder, and you had
to rely on your engineers to pull you through some tough moments. I'm afraid
this is becoming less true over time. The pendulum is swinging back from
technical implementation, back through design, and the power is returning to
sales and marketing, IMO.

HOWEVER, people who can engineer marketing outcomes... those guys will keep
the power.

TLDR; Hie thee thither to up-market positions ye men of valor!

~~~
chriswilliams
100% Agree.

Chris

~~~
craigching
>> The pendulum is swinging back from technical implementation, back through
design, and the power is returning to sales and marketing, IMO.

> !00% Agree.

Disagree 100%. No matter the "pendulum" there are different motivations from
sales to marketing to engineering and there is no one answer. Anyone who says
"sales is the answer" is either in a very specialized software market or is
selling snake oil. Any _good_ sales person knows this. Even _average_ sales
people know this. _Bad_ salespeople apparently don't.

~~~
thetrumanshow
"Sales Cures All." --Mark Cuban.

<http://blogmaverick.com/2008/03/09/my-rules-for-startups/>

Edit: I shouldn't have pulled that card. Apologies. I'm not helping matters.
There's already way too much vitrol going on in this thread.

~~~
craigching
I don't think you should apologize. Sales does cure all. If your sales people
can sell a thirsty man water living next to a fresh water lake, kudos, they're
great sales people! But software is not that easily sold (at least not since
the 90's, or not since the early days of iOS in the consumer market).

But the problem is that "sales as strategy" as posed by the OP is most likely
short-sighted due to "sales person motivations" , i.e. sales this quarter that
affect my bottom line. These types of sales tend to drive _one customer's
needs_ versus the _customer base_. Not always, but that's where product
management and engineering can provide a valuable perspective.

And all of that depends on your targets. If 400K is big money for you, go for
it. But 400k is probably only _big_ in the context of one or two people.

------
jgilliam
There are tons of software companies run by sales people...they just all fail.

~~~
chriswilliams
I'd have to disagree with that. To quote Steve Blank himselve, no software
ever fails because it can't be build. You can build whatever software you
want. Software companies fail because they can't generate cash.

~~~
TheCoelacanth
> To quote Steve Blank himselve, no software ever fails because it can't be
> build. You can build whatever software you want.

Bullshit. Budget and schedule overruns are endemic to the software industry.
There are plenty of companies that fail because they can't deliver on the
technology they promised.

------
fnordfnordfnord
Umm, because your ANSI Standard sales dweeb is a Machiavellian shithead who,
when given the opportunity, can't resist the temptation to chase away the
golden egg laying geese.

