The Evidology Group Blog

Do you Sell or Partner?

In an earlier article, I argued that just as all new products go through a beta phase followed by a production phase, startups should follow a structured commercialization process starting with Partnerships, followed by Sales. To be clear, when I refer to ‘partnerships’ in this context I’m talking about a reciprocal relationship with prospective customers where both parties are learning and deriving value. Customer partnerships are essential for any new product introduction and should form the base of all customer engagements until you can achieve a handful of happy, referenceable customers. During the partnership phase the Founder, CTO, CEO or head of Business Development is responsible for ongoing engagements with prospective customers. In this blog, I’d like to share some components that I believe are part of a strong B2B customer partnership strategy. For more information on each of these, please contact the Evidology Group and we’d be happy to share specific tools, templates and best practices. Customer Validation: This is the critical first step of testing and validating your ideas by having “discovery” conversations with many prospective customers. These Customer Validation discussions are designed to learn what is most important for customers and why. The Customer Canvas tools and methodology developed by the Evidology Group were specifically designed to guide this effort. Trusted Expertise: As a by-product of Customer Validation discussions, you will hopefully find a handful of early adopters who are interested in follow-on conversations to learn more about your proposed solution and benefit from your expertise. These informal partnerships can help you build a much deeper understanding so that you can design and deliver a better solution. Customer Advisors: Ongoing discussions with early adopters will hopefully lead to a formal Customer Advisory relationship where early adopter customers are retained as formal Advisors to the company, often compensated with stock options when allowed by their company policies. Unlike figurehead advisors promoted on slides and websites, I encourage you to hold regularly scheduled monthly 1-hour calls with each advisor. Each call should include a pre-mail with background and topics or big questions to be discussed and a follow-up email with a summary of key take-aways. In the spirit of partnership, be sure to share insights with your Advisor such as technology trends and non-confidential insights you’ve learned from others in the industry. Design Partner Program: Complex products can often benefit from shortening the communication path between customers and your design team. Involving these early adopters in product spec reviews, UX design, or feature demos can help immeasurably in designing a better product faster that is better aligned to a real-world customer environment. Whereas a Customer Advisor is typically one individual providing advice, a Design Partner Program typically involves one or more people in a customer organization sharing their requirements and feedback, and should therefore be documented with clear terms of engagement around resource commitments, IP ownership, financial considerations, timelines and deliverables. Beta Partner Program: The objective of any beta program is not to make money or recover costs, although that may be a worthy by-product. It serves several purposes beyond product hardening such as helping you ensure the product truly solves the customer problem and providing a valuable reference to the media, investors and other prospective customers in the form of testimonials, interviews or white papers. Moreover, the beta program should be designed to help you collect the information you need to measure the economic and KPI impact your solution has had on the customer’s business. A formal proposal may be effective in clarifying the expected contribution of both parties. Sales ahead of partnership is certainly putting the cart before the horse. By nurturing a productive and mutually beneficial partnership engagement with prospective customers, you’ll learn, adapt and collect the necessary evidence that will ultimately set you up for a successful sales strategy. For more information, please contact the Evidology Group and we’ll lead you through the partnership process. We’ll also share more templates, tools, and best practices.

April 21, 2020

How Well Have You Tested Your Vision?

As a Founder, you’ve got an exciting vision for how your solution will make a meaningful difference in the lives of your customers and you’ve been broadly evangelizing that vision. Terrific! But how well have you tested your solution concept with your prospective customers? What insights have they shared with you beyond a simple “sounds interesting”? In this post, I’d like to share a Concept Validation tool and process the Evidology Group has developed to build the evidence and insights to support your business. Done effectively, it can not only save you enormous time and money in product development, it can help you form long-term customer relationships and collect insightful stories for potential new investors and employees. The Concept Validation Canvas The Concept Validation Canvas is a powerful tool to help you test your product or service idea. It builds on the traditional Business Model Canvas and flips the perspective upside down from what you’re trying to sell to what customers want to buy. How to Effectively Use the Concept Validation Canvas Completing the Concept Validation Canvas involves 3 steps: Complete a draft Concept Validation Canvas Meet with advisors, mentors and/or consultants (“advisors”) to identify all assumptions, opinions, unknowns, and vague content in the draft Canvas. Coached by advisors, hold a series of structured discovery calls designed to collect customer feedback on the items identified in step 2. Of course, a tool is only as useful as the actionable insights that surface from it. You’ll learn what are truly meaningful differentiators and how to message them in future marketing efforts. You’ll gain valuable evidence in the form of customer advisors and stories to support investor discussions and new employee recruitment efforts. Moreover, these steps will help you recruit early adopter customers to guide your Minimum Viable Product (MVP). Sounds powerful? Contact the Evidology Group and we’ll lead you through the process to achieve rewarding customer discussions. We’ll also share more tools, processes and examples on how to structure effective discovery calls. If you prefer, we can bring our expertise to your organization as an Embedded Executive and spearhead the process ourselves for even deeper insights, saving you precious time.

April 15, 2020

Ready to Hire Your First Salesperson?

Many technical founders I’ve met with are either getting ready to hire their first salesperson or they’re frustrated with what feels like a revolving door of underperforming salespeople. What gives? Perhaps one of the most fundamental mistakes that technical Founders make is to focus on evangelizing the vision and building the product. Then, when the product approaches MVP-ready, the Founder hires a salesperson to bring in the customers. DON’T MAKE THIS MISTAKE. Sadly, this usually ends in frustration, lost time, poor employee morale and degraded investor confidence. It is one of the most common downfalls of many promising new businesses. Just as any new product goes through a beta phase followed by a production phase, I strongly encourage a phased sales process. Phase 1: Partnership During the partnership phase, an individual (usually the Founder, CTO, CEO or perhaps even a Business Development person) is responsible for ongoing engagement with prospective customers from the concept validation phase onwards. This person is responsible for learning what’s important to the customer and how they would buy/use a new solution such as yours. You’re also freely sharing your company’s expertise with your partner to help them solve an important problem. Most importantly, this individual is responsible for closing initial customers and learning how they buy. Phase 2: Sales Armed with several happy, reference customers and a basic understanding of the buying process, you’re ready to hire a professional salesperson who is responsible for accelerating customer acquisition, learning more about how they buy and building a repeatable sales process. Only when that process is understood and you have good product/market fit, should you grow your sales team to scale. Of course, there’s a lot to unpack in these two phases, and we’ll do that in a series of upcoming blogs. Whether you’re in the Partnership phase, getting ready to hire your first salesperson or you’re frustrated with disappointing sales traction, contact us and we can help get you back on track.

April 8, 2020

Who’s Your Biggest Competitor?

Who is your biggest competitor? The answer may surprise you – very often it’s not a large, brand name vendor. It’s not even another innovative, hungry startup – it’s the status quo. If you find that customers are opting to stick with their current solution rather than try your innovative new solution, then read on! There could be several reasons: Your value proposition doesn’t drive key business metrics to a meaningful degree Your value proposition doesn’t rank high enough on the customer’s priority list The perceived risks are greater than the potential benefits. For many businesses, the effort or risk in changing means that they default to the “good enough” approach where the current way of doing things works and change is not a compelling enough priority. This often-unstated sentiment can be difficult to diagnose but left unchecked, it can grind your sales efforts to a frustrating halt. Businesses and people are full of inertia and changing the way they work can be very difficult: people’s jobs may be threatened, they may require training or a different skill set, there may be inherent business process risk with trying something new, or possibly they’ve tried a similar solution in the past and it didn’t work. Startups developing an enterprise solution in particular need to understand and mitigate the perceived risks to defeat the “status quo”. And the best way to do that is through a series of customer discovery calls to learn and apply – not to sell. Once understood, perceived risks can be mitigated in several ways: Business Risk (Will the intended strategic and financial outcomes be realized?) Encourage a trial deployment to validate expected outcomes Reframe generic strategic and economic value of your solution to be specific to your prospect’s personal and company performance metrics Offer a discounted, deferred or performance-based pricing Cite experience with other customers Implementation Risk (Will the deployment go smoothly?) Engage an established/trusted implementation partner ·Build your own trusted and experienced implementation team Adapt your solution to fit the prospect’s existing business processes and skillsets Stage the rollout Deploy your solution in parallel with the current system or process Reputational Risk (Will the company’s brand be impacted?) Invest in third party evaluations that attest to your privacy and security capabilities and product efficacy Personal Risk (Will my career be advanced?) Point to a strong lighthouse reference customer where possible Have an open discussion with your customer to understand their personal motivations and potential benefit of partnering In all cases, the process starts with a good understanding of the specific customer’s situation and how you will help them overcome the “good enough” trap. If you find that customers are opting for the status quo rather than adopting your innovative solution, contact us.

April 2, 2020

What’s Your Economic Value?

There are an endless number of problems that a true entrepreneur could solve, but at the end of the day, all successful B2B businesses fall into one of two categories: Those that help customers make lots of money Those that help customers save lots of money While there are other benefits that entrepreneurs can deliver, without a strong economic value, you risk becoming a nice-to-have solution and competing with a “good enough” status quo, making the sales process much more challenging. By quantifying your economic value, I’m confident your sales will take off. For example, you can: Generate More Leads – Your sales leads will grow if you can open with “We helped XXXXX lower costs by 20%, we can help you too.” Win More Deals – If you’re able to quantify your economic value and your competitor can’t, then you’ll speak with more trust and credibility to your business and economic benefit which will help you close more deals. Shorten Your Sales Cycle – Not only will you be perceived as a more trusted thought leader by speaking with clarity to your business buyer, but you can also accelerate a long sales cycle by explaining that every week/month they delay their purchase decision costs them $100,000. Of course, quantifying your economic value is a challenge for many new products. There are several approaches to making this assessment. Your Best Guess: Early in the new product development process, it is difficult to validate your economic value. Nevertheless, this is an important part of your customer discovery process. By asking your customer how much time they would save? How many new widgets they would be able to manufacture? How many new hires would be averted? How much customer churn would be reduced? and so on, you can estimate your economic value and confirm you’re solving a meaningful customer problem. Third-Party Analysis: By partnering with a university to write an academic research paper or engaging a third-party consultant to write a white paper, you can point to an independent source to support your claims. Customer Pilot: Many customers are comfortable either providing attributed or anonymous testimonials and results in return for a free or low-cost pilot. The clarity and credibility you can achieve by investing the time and effort in building a solid economic value proposition will help you equip your sales team and grow your sales. This process starts up front, at the customer discovery phase, and continues through the new product introduction process. If you’re having difficulty quantifying your economic value or making it stick with customers, contact us.

March 25, 2020