How Great Founders Approach Sales

if i'm trying to sell you a burrito you don't want yeah yeah trying to keep cutting the price doesn't make you want the burrito if anything you make it makes it kind of worse if you keep discounting it because what's wrong with this burrito yes all right welcome to dalton plus michael today we're going to talk about startup sales and specifically mess-ups screw-ups misconceptions like i think that uh instead of trying to make a sales 101 style video we want to make it more entertaining by talking about when people screw up and uh that's always the most fun stuff so when you're in office hours with the founder and you're just sitting here you know you're hearing kind of kind of a ho-hum story something didn't work and then like you just hear something that makes you cringe you're just like yeah tell an example of that like where you're just like oh look i certainly was the type of founder who wasn't excited about the concept of sales. And I had a lot of cartoonish ideas about what sales looks like, right? You picture like a used car salesman or an insurance salesman or just like a high pressure timeshare salesman. Oh, you love those, right? And so I'm like, man, I never want to do that. That's bad. Yes. I think that founders may resolve themselves. They need to do sales like it's a necessary thing. Yeah. But they deep down are still thinking about the used car salesman. somewhere it's like they never had a canonical example of good sales it's like this it's that good sales is so good it doesn't feel like sales yeah yeah like think about service providers you know i i've had good service providers yes you just kind of email them with a problem they're like yeah yeah you have a problem like let's fix it let's do the thing that you want to do yes and they're super responsive and they're really nice and they understand where you're coming from yeah and those people are totally making money off me those people are selling me a product But when I'm interacting with these people, it feels like you're not a friend, but it feels like someone that knows me, they understand me. Yeah, a partner. I present a problem to them and they're in a position to help me with a good or service. Yes. And we both walk away feeling really good about the transaction. Yes. That's good sales. Yes. And it's so good that it would never register in my brain is that's a salesperson selling me something. Which is so weird because I'm like, there isn't another word for that. like there's like another word it's just it's almost like oh this was all my idea like this was all like i think for me the thing that makes me cringe when the founder basically is like you know i think i figured out a little bit of what the customer's problem is it's gonna be really hard to solve and like i don't think i can solve it but i still need to sell them something they're kind of talking to well like maybe we can help them with this thing or they you know i know what their problem is but they're asking for this i'm not gonna help them with the thing that's screwing them up i'm gonna help them with this other thing i'm trying to figure out how to get out of here with doing the least amount of work possible and get paid i'm not trying to do this like trade or like like the very concept of trade where sales comes from is like by trading goods we both end up better Like I'm not actually engaging in trade. I don't want to say I'm engaging in theft, but like if we were to look at the utility, if you sell something to somebody that doesn't produce any benefit to them, but you make money in the end. I don't think the word for that is trade. No, I think it's a different word from that. I have to think about what that word is. It's a different word. I think it's a different word, but it's like so common. I think that's the thing that really gets me. It's just this like, oh, we're not, I'm not. Being selfless. I'm not trying. You described this guy like, oh, I emailed someone. They tried to help me. They did help me. I paid them. Great. Yeah. But so often it's the exact opposite. It's like, oh, like I'm trying to get paid and I don't know if I can help. My middle model for someone just starting out doing sales is you have this. You want to just go talk at someone and cram it down their throats and get them to say yes. And so it's usually a monologue. Yes. And you say a bunch of stuff and you list the features. Another thing is like. often founders will think that discounting is the most powerful weapon they have they'll be like well i offered them a huge discount and if they bought now they get a discount and again when you think about it if you don't want something like if i'm trying to sell you a burrito you don't want yeah yeah trying to keep cutting the price doesn't make you want the burrito no no if anything you make it makes it kind of worse if you keep discounting it because what's wrong with this burrito well and especially in those situations It's so clear the customer doesn't realize that they can get any value out of the product that like, why are we talking about pricing? I don't even know that you do. Exactly. Like, I don't even know why this would help me. And it's almost like I'm trying to speed run. It's weird to me that like the process of helping someone has been turned into this torturous process. Yep. It shouldn't feel like torture. You should be trying. Why else are you doing this business? If you're not trying to help people. Yeah. a lot of people are better at sales and they realize and it's getting them to like put the car salesman thing out of their mind yes yes and think about it yes to to picture what their best sales experiences were if someone helping them with a problem and just emulate that and i think often people have an aha moment when you say it that way the way we're talking about it yes and that's what you need to be like the the founders i know their best at sales are good at listening and not saying much and being really empathetic and then truly solving the problem so that it feels like a relief to the customer i think you said it best good sales is good problem solving and any good founder is solving how many problems in their company every week and if they took that exact same feeling into the sales conversation they'd be so you know it's like are your employees having a problem with productivity and yada yada and you're like hmm like Let me figure out how to get this guy to like get out of my face without helping me at all. Like, that's not how you're thinking about. It's like, oh, maybe be more flexible at this. Maybe we can help you here. I think that like, if you take the core assumption that oftentimes the customer doesn't know how to solve the problem. So the other thing that I see when people try to do in sales is like, great, Dalton, give me a list of things you want me to do. I'll do them. That will obviously make your business better because you gave me the list. Yep. and then we will both profit and it's like how often are you selling customers the customers like well i want to make more revenue i don't really know how or a customer even worse i'm talking to somebody who doesn't really understand the whole business they're in and like hey can you help me do x y and z but you realize it's not going to really help the business that they're operating that's a problem-solving situation if you treat it that way i mean this is like trite advice but like a lot of trite advice if you pretend like you're hearing it for the first time it might hit differently. So this is one of those things, which is put yourself in the shoes of a customer. Again, you're usually like, yeah, yeah, yeah, put myself in the shoes. No, but really pretend like you've never heard that before. Pretend like this is the first time someone's ever said that. Actually take a minute and it's almost like a method actor. Like pretend you're that person walking into the room. Pretend you can see their email inbox. Pretend you can imagine what their boss is telling them they should be worrying about. What their next meeting is going to be. Yeah. Like actually take a moment and sit with that advice. Yeah. A lot of people aren't doing that is where I'm going with this. Like they, they're like, yeah, yeah, yeah. You know, put yourself in the shoes of a customer, but they, they actually have never done that exercise. My version of that is imagine you were the CEO of the company that's buying your product. What would you think? And it's so interesting when I have that conversation with people, because first of all, they're just like, Because then I'm like, okay, tell me about the business of your customer, right? Because like you're selling this product to them, it's going to help their business. Tell me about their business. They're like, I don't think about their business. I'm like, okay, like, well, if you're the CEO of this business, like, what do you think your top three problems would be? Like, I have no idea. It's like, would your product be a solution to any of the problems in the business? Like, I'm just trying to sell the marketing software, Michael. Like, why are you making this more complicated than it has to be? And I'm like, are you trying to help your customer? Or are you just trying to accomplish your goals and your customer's goals are incidental? You can certainly get somewhere with that mentality. You can probably raise your seat around. You can probably hire people. You can probably raise your Series A. There's a whole set of milestones you can have with that, but you'll never win unless one day you wake up. from this slumber. Basically, you fix this. Like, this is like a, you might get pretty far never figuring this out, but one day you probably need to figure it out. Yeah. I think that's the thing that confuses our founders is like, they see these products. I mean, I've had this conversation with founders. It's like, we use the product. It sucks. Yeah. We don't like it, but they're doing well. Maybe we should do what they do. Yep. Cause like, if you can only see two or three steps ahead of you, you might be following or copying company with a bad product and thinking that's how you win. And it's like, Yep. No. Oh, and the other side of that is if a company is winning, you might not understand the value they create for their customers, but don't dismiss it to zero. Well, that's the classic thing of dismissing a product because the design is bad. Yeah. Yeah. Man, this HRS looks like crap. I don't know if that's the irony of it here. No, I totally agree with that. Here's another fun one. I'll give you a scenario. Great, I'm doing my company. I've raised a little bit of money. I've done some sales. Now it's time to hire VP sales, right? Because like, that's a whole thing. That's not my specialty. I'm just a founder. Like I can hire someone and they'll build a sales team and they'll do it. It's just that easy. Isn't that how company building works? Yeah, you just hire someone and they do a perfect job and you ride off into the sunset. Right, right. The title is VP sales. It seems like they'd be good at sales, right? What do you think actually happens? Like when a company does well, what is actually going on? The deal with executives, and we talked about this in other videos, you want them to function at a high level and they've probably had a similar role in the past. And what it actually means in practice is running a team and hiring other people and managing those people. But it usually doesn't mean figuring out from first principles how to do sales. The most common source of problems is that the founder just expects a new VP of sales to come in and just do as good of a job as the founder was doing. or that is not doing a good job and just like know what to do yeah and like that's not at all what they're really prepared for like imagine someone was a former vp of sales at google or something like that yeah that's a successful product with a successful machine and they were trained and so they were super effective at like running a team and hitting their quota yeah but if you're like a new startup and that hasn't been around for a while without an established playbook it's not obvious those skills transfer over one to one Can I state that more strongly? It is obvious those skills do not translate. Those skills definitely do not translate. I mean, they could. They don't tend to. I think what's interesting about this is as we have funded more B2B companies over the years, and I think personally, as I've realized that like every B2B company is just an enterprise company. or not ever the vast majority are just enterprise companies that haven't figured out the enterprise companies yet i think one of the things that founders have a misconception on is just how personally involved the ceos of enterprise companies are in sales yeah and i remember talking to we have a bunch of founders from palantir and i remember just being like hey you know you hear these deals palantir's getting these crazy deals like how does some junior sales person originate a hundred million dollar deal with boeing like how do they even get in the room with the right people it's plg right yeah yeah yeah that boeing came on the website signed up right what was really interesting to me was like how much executive sponsorship and executive like founder level ceo level involvement there is in those deals and how much The CEO is originating them or is scouting for them, is kind of handing them back to a team to kind of process a little bit, but then like debugging anything going wrong. Like it's the exact opposite of let me hire someone and look the other way. It's like the sales organization is almost built around the founders and is almost like a multiplier effect on their work as opposed to built to the side of them. you know get these questions from founders who you know their employees i got this great question from employees like how do i meet with this important ceo myself and i'm like you don't like why would they meet with middle manager salesperson the the ceo this company's gonna have a hard time getting into this meeting why aren't you asking yourself the question how can i help my ceo get this meeting can we reframe like that doesn't mean it's not your deal or like whatever like let's just separate credit out right yeah just don't get paid you're good can we go for the most effective solution which isn't junior sales guy meeting with c yeah and so this misconception is also just kind of like this idea of like you told me i should do sales as a founder but now that we've moved along i can give i'm not i'm done yeah maybe the last one that i want to talk about is consulting So I'll bring up still my favorite company, YC never funded Palantir. I have been surprised at how many founders will say some version of, well, we don't want to do this for the company because that's going to be consulting. Well, you know, that integration is going to take too long. It feels a little too one-offy. It feels like consulting. It seems like consulting is the weird boogeyman in the room. Almost as if. you would assume that yc has like thousands of companies that have died because they did too much consulting yet like i have not seen that so what's going on yeah so this is one of those um phrases that you're gets repeated so much yeah that it feels like conventional wisdom uh yeah it's like being like you know love thy neighbor you know you just did it consulting is bad don't do something let's pretend like we're hearing it for the first time let's examine this with fresh eyes yes i remember in my first startup um when we were not succeeding getting a meeting with disney yes because to to cut through a bunch of they took many meetings to get to this but like it's a heart of the matter they wanted my startup to build a white label social network so that big fans of the disney parks could network and share tips with each other so they could sell more tickets to disney and they had to control the whole thing and like there's they gave us a spec of all the stuff they wanted us to build yes to like control what people could say like we said no even though it would have been for millions of dollars because that was consulting yes like it was literally a big company that wanted my startup to not have a product and instead outsource their entire r d yes because i seem like a schmuck or i'm sure they asked lots of people to do this and you know if one out of 20 startups said yes to that deal good for disney it's good for disney so you can see why disney try to do those um obviously that would have been a horrible idea yes from my perspective right and hopefully the people in the audience can see why getting a million dollar deal for disney to build a just random piece of software that no one else would ever want that's super bespoke is like obviously a really bad business yes that is the true heart of this advice which is just building super random stuff for big companies is a bad idea. However, the amount of times founders say, oh, that's consulting and dismiss it out of hand, I think is way larger than the specific example I gave you. Disney's not running around asking startups to build them shit all the time. Yeah. And so I do think there's a question under the do things that don't scale rubric of. You know, it's basically a gray area, friends. There's a lot of gray area of what is consulting and what is not consulting. And so I would just try to be open-minded and decide this on a case-by-case basis versus dismissing out of hand that you shouldn't do something because it's consulting. That's a very measured approach. Okay, okay. I will take an unmeasured approach. Just do consulting. Like nine times out of 10, you're probably not doing real consulting. Like you're probably, especially early, you're probably... Getting the opportunity to learn about the problem. And that is such a unique opportunity. And trust your ability to productize over time. Because we're giving this advice in mass, right? So 10% of the companies will do this and they'll die. I apologize. Michael, I don't like those odds, man. 90% will learn something. And all too often. i reframe consulting as like a deep integration is a deep moat a long sales cycle is a moat like a lot of these things that people associate with enterprise you can't on one hand say why does it take 80 years for someone to get off of sap and on the other hand be like i hate long sales cycles and deep integrations it's like that's the game you know it's like oh man i want to win the super bowl but i hate fucking throwing the ball and it's like well man come on like I'll go a step further. I secretly think the reason why Palantir doesn't have more competition is because too many people shy away from anything involving that kind of sales process, that kind of cycle, that kind of product. And if Palantir figure out how to make this not consulting, I feel like a lot of people can figure it out. Well, I think you could argue that they are doing consulting, but they're able to make enough of a margin and have enough scale. Again, this is semantics. But I wonder if this is somewhere in the gray area. I will challenge this. Go ahead. Disney wanted to pay you $10 million to build this website, let's say. But let's say you could build it in three days. Is that consulting? Probably not. But I think a big part of what they wanted was the operations of it and to do the moderation. It wasn't just the building apart. Let's say you could build and operate it. yeah it's only three days of work so you certainly don't have consulting margins at that point yeah and you probably have figured out some kind of base level technology that would enable you to spin that up from that would have been the opportunity cost that's like wait are we in the business of making white label social networks i'm not sure that was a good business but that doesn't mean it's consulting i agree i'm just thinking this through yeah i think sometimes people fall in these these these pseudo tar pits yes where like you get revenue yes but it's like not that interesting to me it's actually not consulting versus non-consulting at least within the ycq community it's so rare that i see consulting happen yeah i think it is more i am making revenue not solving that much of an important problem for someone yeah i'm doing like something like i'm handing myself in a corner and i'm making money yeah it doesn't generalize into something that's exciting okay so anyways the big takeaway here i want to steal two things to kind of summarize i think one is this concept that like great sales feels like problem solving you should be in the business of solving your customers problems otherwise you shouldn't be doing this and you won't win if you want to win you should seek to consistently solve your customers problems um and then two the very underpinning of business trade is both sides have to end up better at the end of a deal please structure things in that way. Please don't. Oh, well, we hit our 15% month over month goals. So I won. I don't know if you won. It's your problem. We have a retention problem, Michael. We'll solve that later. Understand that core principle, like do right by your customers. All right. Good shot. All right. Thanks, Michael.

What does being great at sales look like in practice?

In this episode of Dalton + Michael, the two dive deep into the topic of startup sales. It's a big topic, and there are lots of misconceptions out there, and so D+M talk through some of the common misconceptions as well as encouraging founders to see some sales advice they already know through fresh eyes.

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Dalton Caldwell on X: https://x.com/daltonc
Michael Seibel on X: https://x.com/mwseibel