Last week startups, entrepreneurs, and investors gathered from all over the Midwest in Kansas City to attend TechWeek KC. It was a prime example of how startup culture (and success!) is not limited to the coasts. The best panel, in my opinion, addressed the unique challenges that come with trying to close a large institutional client as a B2B startup, as well as processes and hacks to overcome these particular hurdles. What follows are the high points from that panel, as well as from my own experience in a B2B startup before transitioning to legal practice.
Challenge #1: No one gets fired for keeping the status quo. If you’re pitching your product or process to big boys like Amazon, Coca-Cola, etc., then let’s all assume that you truly believe it’s something of value to them. It’s amazing how, while you can perfectly see that your piece of innovation is going to change the game for them, your initial point of entry to the (prospective) institutional client often doesn’t seem nearly as excited. What you’re not seeing is the calculus going on in their head: what’s MY risk versus MY reward if I were to pitch this to my superior? Unfortunately for you, and your contact’s company, most people fear failure. They’d often rather not try than fail and face any potential negative consequences, especially embarrassment among coworkers.
Solution: Find your Visionary—an employee of your prospective client who (1) is knowledgeable enough to understand your “value-add” for their employer and (2) is genuinely excited by what it is you do. As panelist Chris Cheatham (@chrischeatham) of RiskGenius put it: your “nerd”. This person will be a much easier entry point because they are naturally drawn to what it is you bring to the table. You wouldn’t pitch your product or services in a bland way, so make sure the insider pitching your company to their coworkers and bosses isn’t either! Be sure that you’ve given your Visionary the materials, soundbites, etc. to be able to effectively pitch your product or service to higher-ups.
Challenge #2: Visionaries often aren’t Decision Makers. Visionaries are crucial, but it’s very unlikely that your Visionary will also be your ultimate Decision Maker (though don’t be afraid to aim for the stars and land among middle management). If your Visionary has the internal connections and influence to convince the Decision Maker, then congratulations! If it turns out that your Visionary doesn’t quite have the internal clout to convince the Decision Maker to sign on the dotted line, then see if they will at least introduce you to someone who can keep the ball rolling.
Solution: Find an internal Champion. The ideal Champion will be someone with the vision to appreciate your value-add to their company AND the influence to get you closer to a signed agreement. Additionally, a Champion must be willing to go to bat for you in those meetings to which you won’t be privy. An otherwise perfect candidate who isn’t willing to risk upsetting the status quo is ultimately not the person in which you want to invest your time and energy. Don’t be afraid to wait for the right Champion instead of saddling yourself to the first horse out of the gate. When pitching potential Champions, be sure that you “speak their language”. Your Champion may care most about the dollars and cents, and if you pitch the eco-friendly aspect of your product or service, then you’re not going to stir them to join your cause. Neither will a person concerned with external optics be impressed by the numbers. Bring all your weapons to the table, but read the person across the table, and adjust as necessary, to make sure you’re hitting home what’s most important to them. (NOTE: This should go without saying, but be careful not to burn the bridge you’ve built with your Visionary by making them feel unimportant as you move your focus to your Champion. You will naturally need to invest more time in your Champion than your Visionary if you’re going to keep progressing. The last thing you need is for your former ally to start sabotaging you because you’ve offended them in the transition.)
Challenge #3: Behind the scenes internal politics. Your Champion may be wholly on your side and ready to help you seal the deal, but don’t forget that your Champion is not the only one with an agenda. Even in a large company, there are only a finite amount of resources, and you will likely not be the only one vying for a piece of the pie. Not the least of these resources is influence. Your Champion may have upset the wrong person along the way (heaven forbid it be the Decision Maker), or a union may be against the exact kind of automation you are proposing. Until you’re in the trenches trying to pitch and negotiate, it will be hard to know what landmines may lay in front of you.
Solution: Be flexible and confident enough to adjust your approach. Always be listening and trying to better understand the internal political landscape of your prospective institutional client. You have to be ready to pivot at a moment’s notice, and often the cues for doing so are subtle or even unspoken. You may need to find a new Champion. You may need to alter your pitch to get a skeptical (or downright adverse) party on your side. Or you may need to walk away. Just as a large company has limited resources, your startup’s pool of time, energy, and cash flow resources is likely even shallower. You must be effective but not waste time on a dead deal. You must be efficient but not jump from lead to lead at the first hiccup. Read the situation, and react accordingly.
Challenge #4: Each sale of this magnitude is different. When you’re pitching a large corporate client, the sales cycles are going to be long and the path to success different every time. It is easy to get lost from initial pitch to close and often hard to tell when you’re stuck in a loop that isn’t going anywhere, even though you may feel like you’re doing a lot.
Solution: Put a repeatable, digestible process in place for closing. To prevent wasting precious resources, panelist Paul Jarrett (@PaulJarrett) of Bulu Box suggests the following plan: (1) Identify your best point of entry, (2) Contact that person, (3) make your Pitch, (4) get to a Loose Agreement, and (5) close with the Final Agreement. There are a lot of nuances built into this, and it is often not a straight line from 1 to 5, but the point of the plan is not to draw a straight line, it is to avoid getting lost along the way. Jarrett additionally notes that having this plan facilitates open communication between you and your Champion about what the next goal is, and also helps make clear when you’re no longer making progress.
While each sale will be different, consistently using the approaches above will give you a map from which to work and will help you be as effective and efficient as possible on your way to closing a large institutional client. For additional questions, please contact Jake Brown.