
Ask HN: What did I do wrong in my SaaS B2B startup? - throwaway3141pi
Hi everyone,<p>I somehow had 2M USD last year and I started a cyber security company. We developed some cyber security products that are really amazing and extremely effective. I know everyone think that their product is the best, but trust me, just take my word and assume I&#x27;m right, our products are on a different level for many reasons and its kinda ground breaking. (I really want to know root cause of my problems, so I&#x27;m not going to lie obviously).<p>So products are top notch (lets assume). I used all the money for extensive development, design and R&amp;D. We created the best product. Now I&#x27;m very very low in cash and I didn&#x27;t think much about the sales&#x2F;marketing. I thought &quot;product will speak for itself&quot;.....Well I was totally wrong. I can&#x27;t even show the product.<p>Now I have around 100k left, but hey, we have couple great products.<p>I tried LinkedIn, but never got anything out of it.<p>I sent around 1000 emails to directors, got like 10 responses, did demos, they ALL loved it and told us that they will consider us in 2018 budget.<p>So very very long story short, I don&#x27;t have any sales and I&#x27;m going broke soon. I tried VC firms, but they all need some sales first. I tried couple Angel VCs (Gust), but no one returned to me.<p>So what do you think I can do to save my company at this point. One of the main things I did wrong was not accounting for marketing&#x2F;sales, but what else? Please tell me.<p>I offered free trials in my emails, I told the manager if they think they have something that will protect them against real threats and cyber attacks, I&#x27;m willing to do a very quick assessment by sending them sample emails that will bypass all their existing technologies. Still nothing...<p>Can you guys please give me some advise, some guidance, some tips? Anything would really help at this point.<p>Thank you
======
dirktheman
It seems that you already know the problem: sales and marketing. You've sent
1000 emails and tried LinkedIn and that's it? You have a lot to learn,
especially when it comes to corporate sales cycles and B2B sales. But that's
water under the bridge now.

My advice: fire everybody that's not essential to your operations. You'd be
tempted to think 'if I get one big client I will need the
developers/accounting/HR/personal assistant, but 100K in the bank gives you
about 2-3 months runway and you're going to need ALL that money to get that
client. So: fire everybody, sell everything, start cutting costs everywhere.
It's ramen noodles and water for you the coming 2-3 months.

Now make a list of 5 clients that you want to have. They could be some clients
that you already demo'd to, or new ones. Don't be overly ambitious with this
step, don't aim for the Fortune 500 companies yet because they're not going to
bet on non-proven stuff.

Spend all your time, effort and some money on getting these clients. Get to
know them, make sure that you understand what it is exactly what they're
doing, and how your product can help. Next, think of a way to SHOW them how
your product can help. Cyber security is all nice and great, but unless they
know the risk of not having your product you're going nowhere.

Maybe you can find a way to have a hacker break into their systems (with their
consent, ofcourse!), show them how easy it is to get all client data or erase
their client database. Cybersecurity is like fire insurance: you only realize
you need it when your house is on fire.

A couple of tips: \- Use the 100k to get a sales person with a proven track
record to get sales for you. Sales is a profession just as programming, not
something everyone can do \- people who say that your demo looks great is fine
for your ego, but doesn't say anything. Most likely the just don't want to
make you feel bad \- Sending 1000 emails and trying LinkedIn is not a
marketing strategy \- Dont' say 'I'll send you sample emails that will bypass
your existing technology'. Why in the world would I want that? I might as well
hand over my creditcard data to you as well? Why would I put my company at
risk so that you can sell me something?

In short: cut costs to 0, focus on getting your first client. Oh, and some
detention-work: write down the line 'Build it and they will come is utter BS'
100x. It's like rule #1 of entrepeneurship 101 and widely documented, there is
no reason anyone would fall for this trap. Good luck!

~~~
throwaway3141pi
I will try to hire a person for sales. Unfortunately since cyber security is
critical and you can see how companies almost go bankrupt after a single
stupid breach, I thought people will have some senses and pay attention to
cyber security products and instead of just keep buying and buying and buying
same old technology thats proven to do nothing over and over, they would
consider AT LEAST trying some newer technologies and products... Seems like I
was dead wrong

~~~
tixocloud
Maybe you need to speak to the right executives - i.e Risk, Compliance, Legal,
etc.

------
Blackstone4
From reading your post, I feel like you already know you're problem is
sales/marketing.

If I was a betting man, I would imagine you have a great technical product but
it maybe needs some adjustments and better market positioning.

If I were you, I would get rid of all your staff if you have any. Cut your
costs to zero. Then figure out where your product stands versus competition
and put together competitive pricing. Show potential clients how much they can
save in X (man hours, downtime, reputation etc.) if they use your product.
Focus on selling. Maybe even bring on a sales-focused co-founder.

Failing all of that or if you've had enough try and sell your tech....

EDIT - Also go out and listen to your potential customers. Ask questions. Find
out what their problems are and how you can help. Find out what is stopping
them from buying your product. Speak face to face or over the phone not email!

~~~
Blackstone4
I forgot to add that B2B sale cycles tend to be longer. Be persistent and read
around sales + self-help books.

~~~
throwaway3141pi
The thing is, its really hard to get rid of my developers at this point. They
are constantly making things better, cleaner, faster. Also we have couple more
features that we need to add to some products. But I hear you. I will try to
cut down at least some of them. As for books, can you recommend some good
ones?

~~~
tixocloud
I love Zig Ziglar's Secrets of Closing the Sale.

Another great one is Little Red Book of Selling
([https://www.amazon.ca/Little-Red-Book-Selling-
Principles/dp/...](https://www.amazon.ca/Little-Red-Book-Selling-
Principles/dp/1885167601)) but it might not be suitable in your current
situation given the time crunch.

------
jtap
I wonder, I'm not a customer so you prob shouldn't listen to me, if your
problem is that you are selling something customers don't really put a value
on. Security is a nice to have and only becomes a must have when a problem has
already happened. Kind of like virus scanners are only purchased when someone
thinks they have a virus. Is there a subset of your security tools that can
help determine problem, a cause, and a possible solution to an existing
problem? Maybe package up this smaller toolset with maybe a white glove
cleaning/restoration service as a product.

~~~
throwaway3141pi
I mean considering giant companies who you would think would stick around for
another hundred year going bankrupt right after a single breach should tell a
lot... No?

------
staunch
You need a repeatable marketing strategy! You can't afford to buy attention,
ads are too expensive, so you'll have to earn it by giving away hard work.

1\. Give away knowledge

Write interesting and informative blog posts on topics related to your
technology. Post them on HN. See: CloudFlare

2\. Give away code

Upload to GitHub some valuable part(s) of your product, or the entire thing,
and then make money by offering Enterprise versions that have long term
support, etc. See: Hashicorp

~~~
throwaway3141pi
I will try the #1. As matter of fact we are writing a whitepaper at the
moment. #2 will take a bit time to prepare, but sure, I will consider that as
well. But you think CISOs or MD or decision makers would pay attention to
those? Would they notice?

~~~
staunch
This is bottom-up marketing, where you hope technical people will recognize
your product as useful and pitch it to their boss for you.

"Hey boss, I found this thing called CloudFlare on HN, I think we could use it
to help with these DDoS problems"

~~~
throwaway3141pi
Agreed, but how effective it is? They are willing to talk about a product to
their boss? Bosses listen and accept?

------
saimiam
_(FD - Not a marketer, just a coder who 's trying to hack marketing for my own
startups. If you want, we can brainstorm together offline.)_

I'd stop spending and reserve the remaining 100k to buy me my first client.

Ads, email, and phone calls are too bloodless. You need to get in front of
potential customers, make them engage with you person to person, and make a
home in their instant-recall memory queue - if they think security, they
should recall _you_.

Even if they never buy from you, if they recommend you to a peer, they've
given you a patina of credibility that no online marketing effort can match.

How to find these customers to engage?

1\. Seminars, conferences, lunch and learns, talks, even shareholder
meetings(!)

2\. Tell everyone you meet that you are looking to make industry connections

3\. Followup followup followup..and don't forget the "Thank you" note after
every meeting.

When you interact with people, listen 2x as much as you talk. Make sure you
have an ask from everyone you meet - "I need...", "Is there anyone else...",
"Love to hear your specific criticisms of my product..."

a) people love critiquing things. Listen politely and don't try to correct
them. If they hate your product and say they'll never buy it, move on. If they
find something good in it, start moulding their opinion in favor of the
product.

b) make your success their problem but asking "How can I get you to..?", "If
you were in my shoes, what would you..?" This gives you a window into their
thinking and it makes them your champion with others if they see that you've
done what they suggested.

~~~
throwaway3141pi
Thanks for the advice. For conference/seminars, I attend almost all of them.
But you can't meet key decision makers there or get to talk to them. They are
too closed and not open to talk to "vendors".

If you mean that I organize an event, thats costly, not sure if it will have
good ROI.

I always listen to people and learn from them. Honestly probably around 12
features of my products came from potential clients and by listening to them.

~~~
saimiam
I'd refer you back to this -

 _> Even if they never buy from you, if they recommend you to a peer, they've
given you a patina of credibility that no online marketing effort can match._

Marketers have this rule of thumb that you need between 3-7 touchpoints before
your target becomes a customer. So, after one interaction with someone at a
seminar, you are about 1/5 the way towards making the sale.

Don't lose heart - marketing and sales is as much, if not more, about the
grind as it is about the product itself.

Don't organize events.

Also, there's a difference between listening for features which can usually be
asked as "What" questions and questions which are designed to get your
counterpart to solve your problem for you. I'd recommend a book called "Never
Split the Difference" on how to ask questions to make the other person work
for you without them even realizing it. It's by an ex-FBI hostage negotiator.
His insights were used to save lives and personally, I found the book useful.

------
kiraken
Well, i work with startups a lot, and had helped hundreds of them launch their
products and get funded, or generate sales, this is my advice to you:

1- You need a video commercial something simple, entertaining and youthful,
something that would generate interest in your product, and people will be
intrigued by 2- Create a good landing page or a website for your startup if
you don't already have one and add the commercial to it. You need a great
website, something that screams professional and clean, especially since your
product is cybersecurity, and attach free trials along to your website. 3- Now
for the next step, you need to spread your website far and wide on social
media and web magazines, and try to have the biggest number of people visit
and try it, and make sure you collect their reviews. 4- Once you have a big
number of people who tried and loved your product, you can approach investors
again, but this time with a product that has been tested and widely accepted
in the market.

I probably have a few more good ideas, hit me up and lets chat about it more.

~~~
throwaway3141pi
I have a very good explainer video done by professionals (and paid good amount
of $$ for it) I have a great landing page. Professionally designed and it
looks great

As for 3-How? That's the main thing.... Can't get people or more importantly,
decision makers, managers, MDs, CISOs, CTOs to visit my page

~~~
kiraken
What I usually do is pay facebook and twitter pages within the niche to share
the link, leave the link on Reddit and Hackernews, and spread it on many
newsletters etc. There are other more direct approaches of course.

------
tixocloud
It's clear that you're aware that your main issue is a sales/marketing problem
and it looks like you've got great feedback from the directors you contacted.

Do you know what the timeline is for their 2018 budget? Will you be able to
make it till then?

Also, what types of companies are you going after? Larger companies have
longer sales cycles due to decision making, planning and implementation time.
Is there an opportunity for you to go after smaller companies? What are the
objections being raised by your potential customers? Is it strictly due to
budgeting or is it because you're an unknown startup - if you're an unknown
startup, onboard 1-2 clients for free, get their logo on your website and sell
to the other folks.

How big is your current salesforce? Would you be able to align yourself with
consulting/implementation firms that might help get your foot in the door?
Would you consider hiring a salesforce that is 100% commission-based to try
and get you the sales?

~~~
throwaway3141pi
Yes! I already offered 100% commission, no one is taking it!

------
twunde
Unfortunately B2B sales tend to have a longer sales cycle so you're definitely
in trouble. At this point you probably need some financing and you need some
sales. Anything else right now is a distraction.

Sales/marketing advice:

Most security companies partner with MSPs/MSSPs to sell/implement their
products. It may make sense to work with them and/or sell to them.

You're currently targeting people at random. Instead of just looking at
Directors, it probably makes sense to include CISOs (Chief Information
Security Officers) and maybe some devops folks at startups/small companies.

Financing: You may need to look at alternatives to VC such as raising money
from friends and family, raising money from smaller angels, getting a small
business loan. As others have mentioned, you should look at cutting expenses.
You may need to layoff some staff or cut some expenses.

~~~
throwaway3141pi
Thanks for the advice.

I contact CISOs and directors. Only through LinkedIn and email though. Nothing
so far.

I will try some small business loans, hopefully they won't be asking about
sales.

As for partnering with MSSP companies, I would love that, but how to find
those companies and how to approach them? Just email them and ask for
partnership?

------
dpweb
Nothing quite screams b2b tech like, better sales beating better product.

Vendors spend a lot of money on marketing and sales and id argue its a much
tougher nut to crack that putting together some great tech. IT sr managers and
up are constantly harassed by vendors for a piece.

Security however, sounds like you picked a good space to be in. I’d focus on
getting an installed base by whatever means necessary. Your prospects are
going to want to see you are out there in production at real companies. Ive
heard stories of very small startups getting in that way.

~~~
throwaway3141pi
I'm trying to get some base... But that's the problem, can't get anyone
aboard. They all look for old technologies and existing products. No one takes
their time to check the product, check our explainer video, check the
datasheet, nothing. They think they are OK with what they have, but all the
companies who are being breached had those old / existing technologies and
none of them helped. Still can't get people to listen/try demo/check out our
site

------
ajeet_dhaliwal
Is this a hypothetical question or is it something that really happened?

If real I think expanding on the first sentence would be relevant. Did you
generate that from another startup or raise it?

Spending 95% of your capital on developing the product probably wasn’t a good
idea. Early launch/beta/iteration/lean would have been a low risk way of
determining whether you’re making something people want.

~~~
throwaway3141pi
This is real and it happened. That was from another startup. I agree with
spending all on dev, but creating the top quality product with best developers
(who are expensive, not 15$/hr devs) costs a lot...

------
isaki
1\. Cut the cost.

2\. Most companies don't pay until they get hacked. Find any security
vulnerability in your client app/backend and explain how it can impact their
business and show how your product can protect them from such a security
vulnerability.

------
jackgolding
Have a read of segment's story on indie hackers, their whole product changed
when they actually got an entreprise sales guy. Otherwise you need to do more
evangelism work.

~~~
throwaway3141pi
Do you have a link to the story? Also I'm really trying to get some enterprise
sales guy, I offered share in the company, but can't find the right person.
Also finding a real expert in sales is hard for me as I don't know how to tell
who's better in sales. Everyone have similar resumes and they all have sales
background, but which one is game changer, that I don't know and can't tell.
I'm technical person, no skills or knowledge in sales

~~~
jackgolding
[https://www.indiehackers.com/podcast/032-peter-and-calvin-
of...](https://www.indiehackers.com/podcast/032-peter-and-calvin-of-segment)

Also there was an interesting discussion on sales compensation on HN a few
weeks ago - can't find it though.

------
dyeje
Get somebody who does Enterprise sales and offer them a nice chunk of equity.
Seems like you're out of your depth on that side of things.

~~~
throwaway3141pi
I offered equity and share in the company. No one took it... They all have
stable jobs, no one is willing to leave their stable job and take risk

------
zhte415
The quality of this troll is 5/10 but quite amazing it has elicited so many
replies.

------
machinehead
Create a website about your product, post to HN, reddit, youtube, twitter and
any place you can think of.

~~~
throwaway3141pi
But that's like spamming communities, this is B2B product not for consumer and
reddit/HN etc are mostly for consumers I think? Also with what context? In
addition to that I think I won't get enough upvote or they will simply delete
my post as ad. No?

------
ig1
Have you considered asking the directors who love your product to become angel
investors?

------
Blackstone4
Also how to you manage to spend $2m without getting any sales?! Was it all
staffing cost?

~~~
throwaway3141pi
Developers, designers, explainer videos, website design, product design,
.........

~~~
brianwawok
You should read lean startup before you build a company again :)

Should be getting sales very early in the pipeline. Say after 25k or 50k
development.

------
TheRealmccoy
hi!

have you considered white hat selling?

Take 25 top companies of your prospects list and write to them asking for
permission to do a pen test.

It all starts from there...

------
sbinthree
1000 emails to 10 meetings is really low conversion. It could be an issue of
PMF, or who you are reaching out to, or the messaging of the emails, or a
combination. I would try to find an experienced seller to partner with who can
bankroll themselves in exchange for some generous equity. At this point you
need their experience to build things back up. On messaging, I would suggest
something along the lines of:

Prospect,

I noticed that (indication that they have the problem you solve). Have you
considered (thing you do differently than their existing solution).

(my company) has built a new way to (solve the problem you hypothesize they
have). Solving this problem would (allude to the promise land = more money or
less costs or easier work or all three). Without our solution (scary things
happen). I'd like to connect for 15 minutes and explore how you approach (the
problem you solve) now to see if there is a fit.

Are you free (day and time)?

Pain, value, call to action. There are no hard and fast rules, but you should
be getting significantly more than 100:1 outreach to meetings. Only ask for 15
minutes. The first call your goal is only to qualify. No tire kickers allowed.
Is there budget? Do you actually have this problem? Who else needs to be
involved to decide?

Ask 3-5 questions getting to the bottom of 1. How it's done there now and 2.
Your synthesis of whether you think there is value. If you don't think there
is value, straight up tell them. "It doesn't seem the like the value is there
at this point, I appreciate you taking the time". If there is value, push
hard. What needs to happen next to understand if this is a fit? Who needs to
be involved? DO NOT offer a demo or a free trial. It does not win deals and
puts you in a position of weakness.

You should be able to send 100 cold emails in a day if you grind. That should
convert into 4-5 15 minute meetings with customers. That should result in 1-2
qualified deals. Most top sellers convert about 33-35% of qualified deals into
money. Your sales cycles may be long, in which case I am sorry but it is what
it is. If you can generate those 5-10 deals per week, you should be able to
convert 2-3 of them. Any worse and the issue is product/market fit and
probably not the sales process (probably).

It sounds like you sell to big companies (Directors?). If so, call high. Do
not call people who do not sign cheques. Even if they delegate you down (which
they often will) it is usually easier to get a response from senior people.
Junior people prioritize what their boss tells them where as senior people
tend to be more open. If you nail the hypothesis in the email (we call it "the
hook") then you will get a response. If you don't, you won't, but at least you
can disprove a particular hook.

In terms of cadence, try two emails and one follow-up call a week for three
weeks. It seems obscene but it is necessary. You would be amazed how many
people reply on the 5th email saying they have been looking for the exact
solution you are describing. Of course, only 1/3 of those people actually end
up giving you money (because people) but at least your persistence will make
an imprint. You would also be amazed, after doing this work for a year or two,
how many people come back to the table in six months.

Better engineering and product != success. Seriously, distribution wins almost
every time. Stop worrying about product, whether it is amazing or just decent
does not matter anymore. The only thing that matters is securing distribution.
You have a distribution problem, 100%. If you try the sales route and fail,
the best case scenario would be to sell the company to someone who does have
distribution. Then they can plug your theoretically superior technology into
their distribution.

~~~
throwaway3141pi
My email is exactly like that. I tell the problem (possible problem), I tell
them existing technologies ALL of them fall short because of 2 reasons (I
explain), then I say how we solve the problem all together and ask for a quick
webex demo of the platform. I reached out to CISOs and MDs and Directors....

Calls are tough, specially since I don't have their phone numbers and when you
call some, mostly it goes to voicemail or they dont have time to talk.

I will try with followup, but I'm afraid of spamming their Inbox. How
frequently I should send emails?

~~~
sbinthree
Don't cold call them. Set the calls up in the email and ask for 15-20 minutes.
I would say twice a week. Probably 4-5 emails before you just say "It's clear
my hypothesis is wrong. If things change I'll get back in touch".

