Build-Measure-Learn Your Sales Process

SCOTT:
I will tell you how to apply lean methodology to sales was really out of the
growth of learning about lean methodology from product, product
development standpoint. So is-is there anyone here whos not, whos
never heard of lean or lean methodology?
SPEAKER:
No.
SCOTT:
No? And the reason I ask... you never heard of lean? Okay. So
throughout the course of the conversation were going to have tonight,
were going to be using a lot of the vernacular for lean, in terms of things
like build-measure-learn, experiment, and offices. And so what thats
designed to do really is in my experience with-with startup companies in
particular is that they are told by investors and by their peers, you know,
Go out, build a minimal viable product, and then figure out how to get
the product-market fit, and then once you get a bunch of sales, then well
invest it.
SPEAKERS: [Laughter]
SCOTT:
Youre like, Okay, I got the product part. I got the market part. The sales
part is what Im missing. And the challenge, of course, is that if-if in a,
in a particularly [stark] environment, youre always resource-constrained,
whether its people, money, time. And so the idea of using lean
methodology is to take that concept of build-measure-learn and to learn
quickly, iterate quickly, to take the data that youve been approved from
the conversations you have with your clients to very quickly move on if
something isnt working. So thats when... thats how I-I describe the
application of-of lean methodology to the sales process.
And when were talking about sales, in this case, its predominantly
talking about the enterprise sales, so business-to-business situations. So
youre a startup and youre trying to sell to Microsoft or Dell or General
Motors or General Electric, any of these other big companies, theres
typically a very complex... it can be a very complex sales process. And so
thats where its important to iterate quickly because some of these sale
processes, sales timelines, can take six months, 12 months, and with Core
Logic, were working with U.S. Census, and the U.S. Census is already
starting to accumulate information of data they can use for their 2020
centus... census. [00:02:00] Thats around a seven... a five- to seven-year
sales cycle with the U.S. Census. So thats why its important to
understand what your sales process is and how you can start measuring it
and then iterate-iterate what the...
So what I hope you leave with... Ray was very generous with the
introduction. I hope you leave here feeling as good as the introduction
sounded. Uh, what I want you to leave here with is-is the notion that there
are places you can experiment with the sales process to give you a couple
of ideas of where you can do that, and then also give you a bit of a
framework as to how you can apply this lean methodology to sales and as
part of the, as part of the enterprise, and what is, as I mentioned earlier,
typ- typically a very complex sale. So were going to go through about,
go through about 10 steps, 10 different areas. So that should give you
some heading as to how far along we are. When Im on number four,
then, then we should be about halfway done. So guys...
SPEAKER:
Yeah, just real quickly. Will this also apply to SMBs?
SCOTT:
SMBs?
SPEAKER:
Small, medium, um...?
SCOTT:
No. Sure. Yeah. When I, when I say enterprise...
SPEAKER:
Non-consumer.
SCOTT:
Yeah, non-consumer. So its-its... youre not, you know, not... if youre a

company that is just selling an individual consumer product to a consumer,
its very... its a B-to-C sale versus a B to B.
SPEAKER:
Right. Yeah.
SCOTT:
So its mostly B-to-B sale. Yeah. And you have a question, James?
SPEAKER:
Yeah. Is this... the seminar Lean Methodology, is it adapted from the book
Lean Startup?
SCOTT:
Its a compilation of different...
SPEAKER:
Or did he get that from another source as well?
SCOTT:
The Lean Startup? So Eric-Eric Ries?
SPEAKER:
Yeah.
SCOTT:
So the Lean Methodology is something thats been deployed for actually a

couple of decades. It sort of started with Toyota. Thats where its most...
people most know about this idea of lean manufacturing. And so, Steve
Blank used this as part of his customer discovery and customer
development process, and then Eric Ries was one of his students in a, in a
class in Berkeley, and Eric started applying this concept of lean to startups.
[00:04:00] So Eric-Eric Ries actually owns the trademark for Lean
Startup. Thats a specific concept that he owns that trademark to. So
whenever you hear of lean startup, its the idea of using lean as a
methodology and applying it to startups so that you can, you can iterate
quickly and make decisions quickly. That makes sense? Are we all on
board? Okay. So the first place we want to start is thinking about... and I
used to teach... I taught a couple of classes, so I prefer like words into
PowerPoint in some cases.
SPEAKER:
Yeah.
SCOTT:
So if you remember, theres sort of four processes in line. So theres

customer discovery, theres customer validation, and then there is
customer creation, and then finally, on this side, on the end, its what they
call company buildup. And this is a... we-we say its a somewhat linear
process. We start here with this notion of youre going out and youre
testing the market, youre identifying. You think you found an idea. So
youre going to go talk to customers and get a feel for who are the
decision makers, what are the current processes, those sorts of things.
And then after enough customer discovery conversations, you feel like,
Okay, I think Ive validated my idea that there is a customer out there.
Now, at this point, youre usually building a minimal viable product of
some kind, some way, shape, or form, this-this first iteration process. And
then youre going out and testing whether or not those customers you
identified are in fact interested in that product however bare bones it may
be.
Now, sometimes it works and people are like, This is great. And you
move into selling and creating new customers. Thats-thats where salesales come in here. This is when you start selling. But sometimes, once
you build that minimal viable product and you start rolling it out to people,
they go, Eh, not so much. Anybody had that situation? Its okay.
Weve all failed.
SCOTT:
Fail quickly. Fail often. So, thats where you-you have to kind of start
over. [00:06:00] Right? You start and go, Okay, well, maybe I need to
rediscover who my real customer is. And then you-you sometimes can
end up in this loop for quite some time. And thats okay because, um,
sometimes, you end up never getting past the stage and youre like, Wow,
my idea really sucks. And maybe you will figure out something else to
do. Other times, its just a constant process.
So once you get to this point of-of customer creation, this is, this is where
sales start kicking in. This is where youre actually selling and hopefully,
you get to the point where youre selling enough and you have the right
product-to-market fit that you get to this idea of company building. And
thats-thats where your revenue model kind of goes like this. Thats like,
Yeah, yeah, chi-ching! Thats the thing, right?
So the idea of company building is that point where you found the right
product, you got the right product-market fit. And fundamentally, as part
of... as in-in the lean methodology right here, the idea is that you have a
scalable, uh, repeatable sales process. So getting to this point, just because
you-you might have the right product for the right market, if youre not
selling it the right way, people arent going to buy it. And alternately, Ive
actually been in situations where we have the wrong product for the wrong
market but we were adept enough from a sales scenario to sell it to enough
people to think we have a product-market fit and then you end up in sa...
and then you end up in purgatory.
SPEAKER:
[Laughs]
SCOTT:
I mean, there are plenty of companies out there that are doing a million
bucks a year, two million bucks a year, three million bucks a year. Youre
like, Wow! Thats pretty cool. You got a $3 million company. Theyre
like, Yeah. Ive been a $3 million company for five years, like I cant get
out of my own way. And sometimes, its-its because you actually might
have people that are too good at sales or youre able to pick... take that
round peg and still fit it into the oval hole a little bit, just you sort of
massage it enough or maybe youre-youre... its a CEO-led sale, so every
sale was closed by the company CEO. They get on the airplane and they
go talk to the customer. [00:08:00] They spend a day and then they get
the customer to close and then youre spending all your time trying to
keep that customer happy and making product adjustments along the way
and driving the engineers crazy. Theyre like, Oh, my god! Is this the
way its supposed to be? Well, the answers no. Its supposed to be
scalable and repeatable.
So thats actually the first signal that I tell people to look out for, is that
you got past this p- part of MVP. Youre actually selling. And you might
have act... you may, you may in fact be cash flow positive. You may be
profitable. It doesnt mean that youve built a scalable, repeatable sales
process that allows you to reach this point of company building. So thats
kind of the first lesson, is to, is to, is to make sure that youre, that youre
identifying where and how you can stay on your feet. And thats-thats
one of the four tenets that were going to talk about today. That makes
sense?
SPEAKER:
Mm-hmm.
SCOTT:
Good?
SPEAKER:
But the third one, you didnt [circle]. What is that? Customer...?
SCOTT:
Oh, customer creation.
SPEAKER:
Creation. Thanks.
SCOTT:
So youve discovered your customer, youve kind of validated it, and now
youre getting a lot to create, you know, 5, 10, 50 customers. And then
after you create 50, presumably you should be able to get to 500 or 5000
or 5,000,000.
SPEAKER:
So basically, your-your MVP is your alpha. The customer creation is your

beta, and then, hopefully...
SCOTT:
Well, between... you know, after you had this MVP and youve validated
the customer, thats when you might have... you might continue to
improve the product a little bit or create some enhancements or, you know,
enter a high-level version and a mid-level version or both versions,
different iterations. And thats what youre, thats what youre doing.
Youre trying to create customers, selling those different products out
there.
SPEAKER:
And was 50 just a number you pulled out?
SCOTT:
Yeah. I just pulled that out. I pulled it out. Yeah. So... but I think... I
mean, if you think about it realistically, there might be people in this room
that have five customers right now paying you 10,000 bucks a year. And
youre like, Okay, I got five customers. Well, how do you get 10x to
that? Okay? How do you get from 5 to 50? And once you get to 50, how
do you get to 500? [00:10:00] So I-I like to think about it from a scaling
standpoint. And Ash Mo-, ah, Maurya anybody read, uh, read Running
Lean? He talks about this. He talks about the tenets of growth. He talks
about constantly getting to 10x. So if he gets from 0 to 5, 5 to 50, 50 to
500, 500 to 5000, 5000 to 50,000. Thats the scale that you need to get to.
So... um... so this-this whole math, this part of the math is sort of like
constant 1. This-this part of the math, company building, again is the
point of scalable, repeatable sales process thats pretty constant, too
[unintelligible - 00:10:36] out of the 10 that were going to talk about
tonight. So what is, what is the core tenet, what is the-the mantra, the
religion of lean startup?
SPEAKER:
[Unintelligible - 00:10:45].
SCOTT:
Its three words.
SPEAKERS: Build-measure-learn.
SCOTT:
Build-measure... build-measure-learn. Right? And so youve got build...

measure... learn. And between building and measuring, thats where, from
a product standpoint, youre coded. Right? So you-you-youre building a
product, and then after you... after you built the product, then you go out
and try to learn from the customer here. And thats where youre accruing
data. And then based on what you learned, you figure out, Okay. Am I...
is my MVP hitting the market the right way or do we need to go back and
make some... create some... rediscover new customer? And thats where
youre generating new ideas. So this is something that, um, thats kind of
a core tenet in-in, uh, lean methodology.
Well, Eric, uh, Eric Ries, he kind of did his own transformation of this. So
he said instead of learn, think of it as hypothesis and instead of build, think
of it as experiment, and metch-measure is a metric. Its pretty much the
same thing. [00:12:00] And so when youre thinking about this from a
sales standpoint, its the same principle when I talk about applying lean to
the sales process because you want to create a hypothesis, how should I
sell this product, to whom should I be approaching within the company
well talk about that in a few minutes how much should I charge, how
long should I be willing to, uh, go after I send a proposal before calling
somebody, how do I prospect effectively, where do I prospect, whats my
value statement?
All these things are different hypotheses and you come up with ideas on
how to address those. And then you experiment with them. And instead
of coding what youre doing here, youre selling. So if youre an engineer
and youre going to do the build-measure-learn and youre really scared of
sales, youre doing exactly the same thing. You just replace code with
sale. Coding and selling. So for a lot of folks, I just tell them, If you just
pay attention to the process, if you hate selling, youre timid or youre
afraid of selling, just focus on the process and it will just dramatically
relu... reduce your anxiety and the stress. Because you just, you just
follow the process. Then you dont have to worry about what youre
saying all the time. So thats the idea of this-this sort of, uh, buildmeasure-learn. Apply the hypothesis, experiment, measure.
And-and additionally, a lot of times we make it... when people get to the
sale part, theyre like, Wow! Im really not selling many products;
maybe I need to re-tweak my product again. Right? Anybody, um... you
may know a guy named Sean Murphy. Hes... some people have heard of
him. He writes really, really great stuff on his blog. He does a lot of, a lot
consulting for startups. He-he told me this line that will stick with me and
I tell startups this all the time, and the line is, You cant engineer your
way out of a sales problem.
SPEAKER:
[Laughs]
SCOTT:
You cant engineer your way out of a sales problem. And what that
means is, just because youve created a product and nobody wants to buy
it doesnt mean you go back into a bunker for 18 months and redo the
whole product without ever talking to customers or trying to sell it or
continue to sell what you have. [00:14:00] So its sort of... you need to
sell what you have, and on the background, yes, you can continue to
iterate on the engineering side. But dont think that just because you
werent able to sell the product in its current form with the one lady you
tried to sell it, it doesnt mean that you can go and engineer your way
around that. Youre, Well, if the product was just a little bit better, or,
Oh, you know, that one guy six months ago told us if we had a tweak
over here, then he would buy it, so maybe well do that. You cant, you
cant engineer your way out of this, out of the, out of a sales problem.
So its really touchy. I mean, you have to use your intuition a little bit and
you have to pay attention to process but you also have to think about sales
as, uh, that grand experiment as well. And thats-thats fine. Youre still
with me?
SPEAKER:
Mm-hmm.
SPEAKER:
Yes.
SCOTT:
I think Ive gotten exactly the right amount of caffeine in my system.
SCOTT:
So the next thing we want to think about is change of colors. Um, its
when, how, andwhats that one there?oh, where to experiment with
sales. So anybody in here that are entrepreneurs trying to sell their
products right now, this week? Okay. Im going to pick on Tom, if you
dont mind.
SPEAKER:
Sure.
SCOTT:
So in your mind, where do you think you could experiment with sell...
with-with the sales process that you may not have done earlier?
SPEAKER:
Um, you mean where geographically or where in the...
SCOTT:
Where in the process.
SPEAKER:
Oh, where-where in the process. Um, I think the-the whole process, but I
mean, our approach to it right now is-is, uh, engaging with, uh, potential
customers that we dont feel like are necessarily the-the real target ones
that wed ideally want to go after but are, you know, attractive still. I
mean, theres still the potential there. And that way, if we fail with them,
we-we havent screwed up on...
SPEAKERS: [Laughter] [Crosstalk]

SCOTT:
[00:16:00] Yeah. Yeah. So one place you can experiment is frankly who
you approach.
SPEAKER:
Yeah, exactly.
SCOTT:
Okay.
SPEAKER:
SPEAKER:
Yeah.
SCOTT:
Somebody... a couple other people have their hands raised. Um, who else
have their hands raised?
SPEAKER:
Jeff.
SCOTT:
Jeff. Where else, where else in your sales process do you think you
could... where do you think you could experiment that youre not right
now?
SPEAKER:
Um, on-on different messaging, different verticals. Um...
SCOTT:
Both. Thats... because those are actually two things you said. So one is
messaging which well-well talk about. Um, I-I refer to it as value
statements and markets, market segments, right, different verticals. Um,
market segments are not always sy-synonymous with verticals. You can
have different segments within the same verticals. Say youre
approaching healthcare; thats a vertical but you get different segments
within healthcare. So you have to be careful not to use that too
interchangeably. Fundamentally, the idea is the same now in that you
want to approach different parts of a market or different markets because
you have to figure out is, again, is this a... its a product problem or is it a
sales problem. Youre trying to achieve that product- market sales. Right?
SPEAKER:
How do you determine?
SPEAKER:
Yeah.
SCOTT:
Well, thats... I mean, the idea here... what Im talking about is on the sales
side, is that you... the goal is to exhaust the experiments that you could do
in the sales front within a reasonable amount of time so that you can say,
Hmm, we tried three different experiments in the way we sell this product
and to who we sell this product. Its not working. Maybe it is the
product.
SPEAKER:
Or we could from a product point of view, could easily turn around and
say, Well, we feel like this market needs these things that we dont have.
So lets massage the product and then provide those features so itll be
easier to sell through the market.
SCOTT:
Yeah. In an ideal world, youre actually running but it is not a linear

process where you experiment with sales and then you experiment with
product and then you experiment with staff.
SPEAKER:
[00:18:00] Yeah. Youre doing both at the same time.
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SCOTT:
Right? Youre doing... youre sort of doing all these things in tandem.
And thats-thats the leadership position of an entrepreneur. Its really
hard to juggle that stuff. You have to turn those dials and turn those
knobs. What were trying to do is that, uh, like any good experiments or
what, is identify variables, sort of lock in certain variables at one time, and
at the out- outcome of that experiment, we know whether or not the
change in that variable affected the outcome.
SPEAKER:
But how do you differentiate somebody that says, Oh, I would pay for
your... you made this, uh... versus, you know, Its fine the way it is. I
need to just figure out [unintelligible - 00:18:31].
SCOTT:
Ask him to write you a check.
SPEAKER:
Whats that?
SCOTT:
Ask him to write you a check.
SPEAKER:
You can always sell what you dont have.
SCOTT:
Yeah.
SPEAKER:
Thats-thats...
SCOTT:
Fifty percent now...
SPEAKER:
The other 50 percent upon delivery.
SPEAKER:
Okay.
SPEAKER:
I think, I think one of the... one of the challenging things I was, uh... I
think a lot of people tend to experiment with too many variables at one
time.
SCOTT:
Exactly.
SPEAKER:
And weve got to make sure that we stick with one variable at a time
because then you cant tell which variable is affecting the sales.
SCOTT:
Youre exactly right. And thats-thats the design when you experiment is
making sure youre controlling the factors except for one thing.
SPEAKER:
Right.
SCOTT:
So these are... and these are just some ideas on how you may choose to
experiment. You may know... you may have a really clear idea of who you
approach in your target companies. You-you know that this is a
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technology product and you know that this is always implemented by the
CTO or the CTOs office. And therefore, thats the person youre going to
approach in that company. You may know exactly what your value
statement is to that target company, to that target industry. Um, what you
want to change though is different market segments. So thats the idea
here. So some other places where you can, um, experiment is prospecting.
What is, what is prospecting?
SPEAKER:
Building potential clients.
SCOTT:
Yeah. And going out and finding potential clients. Theres lots of places
that you can experiment with prospecting. Now, you need to make sure
youre going to make sense where you prospect. [00:20:00] And in the
Core Logic world where we sell real estate data to the government and to
banks, were not hanging out on Facebook to look for prospects. Right?
Were not hanging... even Twitter is not a place. LinkedIn turns out as a
great place because all of those people have profiles on LinkedIn because
theyre government bureaucrats or theyre bank executives, and they want
to make sure everybody knows who they are. So that sort of makes sense
intuitively where you can... where youre using experimentations.
Um, another way to experiment is thinking about times of sale. So this is
also related to pricing and how you price your product. Theres a gen- the
general rule that I follow, and I think I found this pretty much holds true,
for every $10,000 a month... every $10,000 per, uh, I should say, per year
of revenue. So if youre going to charge $10,000 a year for your product,
you can assume about a one-month sell cycle. So if youre going to sell a
product thats say a $30,000 license for the year, or lets say, you say, its
3000 bucks a month, thats $36,000 a year. If its $36k a year, youre
looking at approximately a three- to four-month sell cycle.
SPEAKER:
Mm-hmm, interesting.
SCOTT:
Just-just the back of the envelope. It doesnt always hold. Youre always
going to find some people that a 10k expenditure, maybe a small
business... 10k to a guy with a 10-person company is a big check. But in
12
mo- for the most case, a 10k, a 10k a yearwhats that per month, 800
bucks a monthsome VPs will just put that in a corporate credit card. So
its just a matter of getting some buy-in from the local team where they
might be implementing your software or selling a software product. Like,
Okay, Ill just expense [list]. Right? [00:22:00] Versus, you know, its a
$100,000 sale and youre looking at 10 months or 12 months. So this is
important because if youre a startup, youre-youre striking that down.
So if you want to optimize revenue, you also want to accrue customers and
is it better to take three or four months and try to close $36,000? Whats
the risk of losing that sale and waiting four months to find out versus,
Okay, Im underselling what I think its worth but I got a deal closed in a
month for 10k. Now, I can fund some more growth. So, thats a different
experiment that you can sort of [unintelligible - 00:22:31].
SPEAKER:
So assuming that, uh, most startups cant really wait 12 months to close a
sale, uh, especially if youre like experimenting and youre going to have
to close a sale and test and run the data, come back, youre looking at a
couple of sales, theres just not enough time. Youre going to run out of
money. So does that... is that... would that mean that startups really
shouldnt be doing bigger enterprise sales? Really, they should target
small to business... uh, uh, small to medium-sized businesses? Or come
up with products that...?
SCOTT:
Yeah. Yeah. So I wouldnt confuse size of revenue with size of the

companies you can pursue. So like I... like with my job, I can pay... I can
probably approve a $5,000 to $10,000 cell phone purchase in my
company, some like mid-level [unintelligible - 00:22:31].
SPEAKER:
Right.
SCOTT:
Right? So if down the road though that software that Im thinking about
buying is planning to build out, remember youre still early stage, youreyoure maybe passing, you-youre trying to make sure that youre getting
to the point where the market wants to buy your product in-in a lot of
quantities over time, where you have a lot of customers, maybe its better
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to start with somebody like me and then work your way up. Right? So,
um, anybody using Yammer?
SPEAKER:
Yup.
SCOTT:
Yeah? How do they, how do they approach the market? Like totally low
end, almost free if not free, and they had 400,000 users before they even
got any kind of real traction. [00:24:00] Right? So that was almost free.
Um, theres another guy you should check out. Um, he writes a ton of
great stuff on Quora. Um, his names Jason like... uh, Lemkin. He started
a company called EchoSign which he sold to Adobe for something like 50
million bucks. And he spent so much time on Quora thinking about,
talking about this exact... these types of questions that youre asking me.
So its a really great res... resource to ask. And a lot of times, you do need
to start with a lower-based product in order to get into the door of the big
companies, and then as the product matures and your relationship matures,
then you can go back to them and say, Hey, weve had at least 17
features. In the next release, were actually going to charge 30k for it.
SPEAKER:
What-what... we-we actually have an interesting situation where we do a

new SaaS model at a very low price or-or an enterprise model that requires
100k plus. So does that mean that if we find... Im actually looking at a
dealer, an enterprise customer, a large customer, uh, that only expressed
interest on the enterprise model. But thats going to be definitely a 100kplus deal. So, if-if thats likely to sell at 10 months, we just dont have
that kind of time, which pass up on the
SCOTT:
So you have to decide on something else you can negotiate with that
client, say, Look, if it will help you get the approval done faster, Ill do it
for 35k. But in return, I want these concessions, whether its time on site
to work and understand how the clients are using it, other information,
other data, other access referrals, quotes on your website, product releases,
whatever it is. So you have to, you have to be willing to-to toe that line.
So I just talked to a company this week. They had twen... they have five
customers, their first five customers worth $20,000 per- for perpetuity.
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Thats the way they-they did it. They said, Look, we [dont want] new
customers. We want to get users. We think were going to charge
eventually $75,000 to $100,000 for this product. But we need to see
people using it. Right? Now, thats not a sustainable sales model.
[00:26:00] But it gets them in the door at a, at a price level thats sus...
thats easier for people to swallow plus its perpetuity.
Now, I talked to their sales guy, the guy who runs the sale... he has the
sales operation. Hes like, I-Im not doing this anymore, obviously. But
now, it was able... a way for them to fund their growth and now they can
go to other new customers that theyre approaching and say, Oh, yeah,
we already have these customers and theyre all really happy. And
theyre using that as a gateway to learn more about how to continue
building up.
SPEAKER:
But if you sell to the government or something, uh, dont they require that
you give them the best pricing thats-thats available?
SCOTT:
Thats a lie.
SPEAKER:
Well, you can also marginalize, uh, the situation.
SCOTT:
Yeah. And thats where you need to be from a product standpoint. And so
theres product decisions and theres sales decisions.
SPEAKER:
Yes. They were going to bring in [unintelligible - 00:26:50].
SCOTT:
And thats why you have to iterate simultaneously to make sure that
youre matching with the product line.
SPEAKER:
Im going to come back, uh, to-to some of this er-earlier point about
controlling variability when youre doing the experimentation. If youre
running the software test, you can change one perimeter, re-run it, change
another one, and re-run it. But if youre in the sales cycle, you cant
necessarily do that because each customer that you might approach, even
if youre in the same market, same... you know, youre similar, there are
variables that are different. So how do you, how do you adjust for that to
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make sure that youre not mixing too many things going on at once? Is it
smaller hypothesis or how-how do you do it?
SCOTT:
Thats actually the next two sessions.
SPEAKER:
Oh, good.
SCOTT:
So just to sort of catch yourself where we are, this first, the first concept is
here which is the, this idea of getting to this linear path and then
ultimately, you want to get to this point of having a scalable, repeatable
sales process. Right? The third-third concept is this idea of buildmeasure-learn, turning that from-from build-measure-learn to hypothesisexperiment-metric. And then instead of coding, you sell. Right? The
fourth idea here is that you want to experiment. Right? Thats what were
talking about here. [00:28:00] This idea of hypothesis-experiment. And
so now, the question is, Where do you experiment? Well, theres these
different places. Who do you, who do you approach, which is what were
going to talk about, how do you approach them, whats the message, in
what market segments, and how-how exactly are you reaching them,
through what channels? So if you think about in an enterprise sale or a
business-to-business sale, um... [Whispers] I know [unintelligible 00:28:26] something on there.
SPEAKER:
[Laughs]
SCOTT:
Thats okay. Anybody dealt with personas as part of the lean? Right? So
think of buyers, their types, in a similar way as you do personas. Now, in
an enterprise sale, theres typically four to five different players that earn
the ball. Now, these are my labels. Theres other ways to label it. So
starting from the bottom up, theres whats called the doorman. I will just
go through these and then well... then theres the product champion.
Theres the user-buyer. Theres the technical buyer. And theres the
economic buyer. So what is the, what is... what do you do with the
doorman?
SPEAKER:
16
SCOTT:
Whats that?
SPEAKER:
SCOTT:
Hmm, no, not always... not a gatekeeper.
SPEAKER:
Kicks the, uh... the chief architect or somebody that kicks the product to
make sure its working well before they let you into the door, verify that it
does what it says it does.
SPEAKER:
Its like a bouncer.
SPEAKER:
A purchasing sort of...
SCOTT:
What does a bouncer do?
SPEAKER:
Lets people come near.
SPEAKER:
SCOTT:
Yeah. So this might be somebody you meet at a conference that they

might tell you, Wow! Its a great product. You should talk to Bill. Bills
our director of marketing. So let me introduce you to Bill. [00:30:00]
Thats all they do. Right? Theyre just letting you in.
SPEAKER:
Oh, okay.
SCOTT:
Right? So the doorman, they have no power over the decision.

Sometimes, you dont actually get this person. Maybe you actually meet
an economic buyer or a user-buyer in a conference. The idea is-is-is that
theyre just letting you in. You should talk to blah-blah-blah.
SPEAKER:
So its like the antithesis of the gatekeeper.
SCOTT:
Yeah. It is.
SPEAKER:
The person whos trying to keep you out.
SCOTT:
Yeah.
SPEAKER:
Theyre the person who lets you in.
SCOTT:
Exactly, exactly.
SPEAKER:
Oh, okay. [Laughs]
SCOTT:
So what is a product champion? Anybody have a product champion in a

current situation?
SPEAKER:
Yeah.
SCOTT:
Tell-tell me about that.
17
SPEAKER:
Uh, we-we have a service business, too, and then we have... the director of
IT just loves what we do. He keeps on referring us to other projects within
the company.
SCOTT:
Within the same company that youre working in?
SPEAKER:
Yeah.
SCOTT:
Perfect. Thats a product champion. So a product champion is somebody

who ultimately... not only do they love your product but theyre willing to
sell your product to the other people within that organization. Theyre
people that will help you set up meetings with-with other buyers, other
people that make decisions about your product, and then even before that
meeting, you can call that person. You go, Hey, what should I really be
focusing on in this meeting? And theyll tell you, Well, okay, well,
Bills going to be there. And Bills the CTO, and Bill really wants to
know whats coded in, where its posted, is there enough security, what are
the risk management, risk mitigation metrics that you put into hosting
yourself, or blah-blah-blah-blah-blah. Youre like, Okay, cool. Now,
Im primed and I know how to address those questions for Bill.
SPEAKER:
What do you find in your experience, um, is the motivation for a product
champion?
SCOTT:
Theyre usually somebody who just wants to install change in their

organization. Or maybe that youve identified a problem that theyve also
identified in their organization and they see you as a way to help solve that
problem, and in that sense, if its solved, its a great way for them to selfpromote themselves.
SPEAKER:
I heard a tip there. To find those, usually look for those people, the up and
coming, the rising stars. They really want to move up so theyre always
looking to innovate. Is that a good...?
SCOTT:
Yeah. I mean, thats-thats a good way to think about it. It might also be
somebody whos on their way out. They want to leave a legacy...
SPEAKER:
Hmm.
18
SCOTT:
As well. [00:32:00] Somebody who could be really senior thats in a sort

of a professor emeritus role within an organization. Um, it could be... um,
another place that I look... like to look for product champions are-are at
conferences. Um, youre looking for people that-that may say like, Im
the director of innovation. All right? Theres a lot of those things comcoming up. Like these people... or, you know, theyre responsible for new
tech, new tech adoption. If its a big enough company, they have these
types of people. Um, it might be somebody whos like the director of
client experience, like they want their customers to be really happy, and if
you can get that person to say, Hmm, if I use your software in my
company, thats going to help our customers to be happier. So that kind
of person ultimately doesnt have a [P&O prof], you know, the-the budget
that theyre responsible for. They cant buy stuff, but if theyre a VP of
client experience, then rest-rest assured, they probably have some
influence on the rest of the organization. So whats a user-buyer?
SPEAKER:
Anybody.
SPEAKER:
Somebody who likes to use your product.
SCOTT:
Yes, somebody who actually would be using your product on a day-to-day

basis. So if youre selling CRM, it would be a salesperson. Salespeople
use the CRM on a regular basis. It would be a marketing manager. It
would be an email marketing consultant, something like that if you-youre
trying to sell like in Salesforce, um, the actual user. But a salesperson is
only a user. Right? A salesperson doesnt make the decision on whether
or not you use Salesforce or Zoho or some other type of-of CRM. Okay?
Who is the technical buyer?
SPEAKER:
IT.
SPEAKER:
CTO.
SCOTT:
[Unintelligible - 00:32:51] CTO, it could be a VP of engineering. Um,

anybody selling into the financial markets? Youre selling your product
into the financial markets?
SPEAKER:
Yeah.
19
SPEAKER:
Yup.
SCOTT:
What-what-what...
SPEAKER:
Coins.
SCOTT:
[00:34:00] Like what type of, uh, customer? Give me a... is it like
Morgan Stanley or a US bank or...?
SPEAKER:
Our customer in process right now is... this would be really popular with,
um, existing algo-traders, um, people that use algorithms in trade.
SCOTT:
People that use algorithm to change... trade. Okay. So in your case, the
technical buyer might also be a compliance officer. Okay? So, yes,
theres probably a CTO or an engineering person that wants to make sure
your software works, but theres also the technical piece of, Hmm, is
there anything weird or fuzzy about this that the SEC might come down
on us if it doesnt work correctly for some reason? So that person is a
technical buyer. Basically, the technical buyers are providing expertise, a
specific expertise on the sale, but theyre ultimately not the person who
writes the check. The person who writes the check here is the economic
buyer.
And depending on how expensive your product is, you have to go further
up, further up the-the food chain. So like I said, if its, if its a 10k type of
product that youre pricing, you could probably talk to a VP or a managing
director or a director or somebody like that, director if youre doing...
lets say youre-youre selling a customer service software and its a 10k
plug-in to Zendesk. You could probably talk to the director of customer
service. He has a 20-person team. And that person probably is someone
on top to make that decision. Thats the economic buyer in that case. If
youre trying to replace Zendesk and you want to sell a $100,000 license,
chances are youre going to have to go way up in the organization because
thats going to completely change the infrastructure and the way that
systems are made, and the size of that check is really big for a lot of
people whose butt would be on the line if your product didnt work out.
20
SPEAKER:
I-I have a technical compliance friend that says the first thing that you
would look for is, uh, established companies, not startups or any... I want
to see you operating for over five years. [00:36:00] I want to see Better
Business Bureau, [say]. What-whats the... how do you overcome that?
What-whats your [unintelligible - 00:36:07]?
SCOTT:
Move on.
SCOTT:
Move on. Right? I mean, thats-thats the, thats the technology adoption
curve.
SPEAKER:
Yeah.
SCOTT:
Like you have your...
SPEAKER:
I do.
SCOTT:
Like you have your visionaries here. This is, um, the [unintelligible 00:36:22] in technology adoption. Right here are the visionaries, then you
have your early adopters, and then you have, um, your mid... I-Im not
sure if this terminology is exactly right, mid-adopters, and then you have
your late, your late adopters. So theyre-theyre just a conservative
company. So theyre not going to be first and foremost. And so you just
find people that are visionaries, people that are early adopters if youre...
and theres... you have to find, you have to go find it. And thats... and so
thats where I come to... and I know you have another question. Let me
finish this spot.
SPEAKER:
Sure.
SCOTT:
When I talk about experimenting, a place to experiment is prospecting. So

how are you... who are you going after within these companies and what
are the personalities of those people? So when youre prospecting, theres
all kinds of different ways that you can so the value statement, for
example: how you address an economic buyer if thats your point of entry
in a market or in a, in a company is different than the way that you would
approach a product champion about your exact same product. You want to
change your value statement. What your product does for the director of
21
client experience is a different message than the C- the CEO of the

company. So if your software is going to make ultimately... if its... lets
say its a customer service software product and you have a VP of client
experience, not the VP of customer experience, or customer care, VP of
client experience, then the value statement of your software is, Our
software makes your clients happy. Right?
Versus the economic buyer, you talk to the CEO of that company and you
say, Our software will increase retention of your product by 15 percent,
which equates to $6.3 million of sales for you per year. [00:38:00] Thethe economic buyer, the CEO, says, Heres my client experience,
[unintelligible - 00:38:11] blah-blah-blah. Right? That makes sense?
So thats a place you have to experiment. And these are all steps that you
have [unintelligible - 00:38:20]. So Im just trying to give you ideas on
where you can experiment. Did that sort of answer your question?
SPEAKER:
Yeah. And-and I-I want to tell you that when-when... you really have a
compliance role? I mean, they-they tended... I [dont know] any visionary
compliance folks.
SPEAKER:
They-they... they tend to be very, super conservative. Right? Right?

Unless Im missing something, thats-thats all.
SCOTT:
You know, I dont know.
SPEAKER:
Yeah, and tha, and thats fine. Thats fine.
SPEAKER:
[Unintelligible - 00:38:50] how to understand very well your relation and

see what how you can [unintelligible - 00:38:54]. Those are the
visionaries in that [team].
SCOTT:
Interesting. Say that again. Turn around and tell him.
SPEAKER:
Yeah.
SPEAKER:
Thats okay.
SPEAKER:
Like in Wall Street, what they do is like the compliance is one thing so the
visionaries are the people that are trying to understand how to get around
22
that by following the laws. People are always looking at... its called a
loophole at the end but it is what it is because its not illegal.
SCOTT:
And certainly, we saw that in the housing market, for example, where
there were compliance officers that were a lot looser. Now, those
companies are no longer around to sell to.
SPEAKER:
Right.
SCOTT:
Like Lehman Brothers. But they were certainly a lot more liberal in the
way that they interpreted compliance in relations. So maybe there are
those people. You just have to go find them.
SPEAKER:
And so-so leverage the champion to overcome it.
SCOTT:
Yeah.
SPEAKER:
To overcome, right.
SCOTT:
Sometimes, it... that-thatll sort of become part and parcel. Our champion
might [unintelligible - 00:39:46] software and go, This is really cool.
Weve never used it here because our chief compliance officer is super risk
averse. So, you know, sorry. Come back to me when you have 50
customers and you [unintelligible - 00:39:56].
SPEAKER:
Right.
SPEAKER:
[00:40:00] But theres also [unintelligible - 00:40:00] of that question

which is if you come in looking like a startup, people are going to be much
more reluctant to take a chance on you. If you come in looking like youre
all put together and like youve been around for a few years, theyre not
going to question you as much as they would question somebody that
doesnt have their own branding put together, because like I used to have a
furniture manufacturing company. When we did our first major trade
show, we had all of our ducks in a row as far as our branding. And people
would come in and say, How come we never [unintelligible 00:40:33]. Well, you know, weve been around and we just havent
really grown [unintelligible - 00:40:36]. And, you know, we were new
out of the box but we closed some major retailers just because we looked
like we had been around for a while.
23
SCOTT:
I suspect you closed those retailers for other reasons.
SPEAKER:
Well, because our-our whole act was to get our product [unintelligible 00:40:49] in good shape...
SCOTT:
I-I would have to respectfully disagree with the, with making it binary in
that there are plenty of companies that specifically will go do business
with startups because they know they can get a great price, or theyve got
somebody whos a visionary in that, in that big organization that wants to
draw in that new technology before it gets out in the open.
SPEAKER:
Well, I-I think that theres a [unintelligible - 00:41:09] two but if you
come in, if you come in... not
SCOTT:
Thats... I mean, thats just... that makes sense where you-you dont want
to walk in there and be like, Oh, you know, sorry I was late. My car
broke down.
SPEAKER:
Yeah. I mean, you want to have your act together.
SPEAKER:
You know, but I mean, you know, the-the presumption is a lot at the
beginning.
SCOTT:
Of course.
SPEAKER:
If you look like youre knowledgeable in your field...
SCOTT:
You have to be knowledgeable. You cant...
SPEAKER:
Well, no.
SPEAKER:
But there is, there is... you know, perception is a large portion of the game.
Obviously, you cant have it in front without it behind but if youre
disorganized in branding and...
SCOTT:
The perception will get you through the initial...
SPEAKER:
Right. It will get you into the-the initial tension then you can close, you
know...
SCOTT:
... analysis and, Okay, yeah, you can come in, or Yeah, okay, well do a
second demo and you should see the rest of the team. That will, that will
not close the sale. [00:42:00] It will help you open the sale.
24
SPEAKER:
Right.
SCOTT:
That-that is my...
SPEAKER:
But I have to agree with you today because its a very da-data drivenworld. People will just find out immediately. You have a certain
[unintelligible 00:42:11].
SCOTT:
Yes. [Unintelligible - 00:41:52] I mean, when Ive worked, when Ive

worked with startups, they always ask, Who are your customers? How
many customers do you have? Whats your... how many, how many
employees do you have? They wont ask you how many customers and
they wont ask how much revenue. They ask you, How many employees
do you have? Because thats-thats an easy way for them to figure out
how big or small you are. And so we all lie and tell them that...
SCOTT:
Well, theres seven of us, even though theres two.
SCOTT:
And both of you are part time.
SCOTT:
The other five include the web designer who did your website six months
ago, the outsource company at, you know, Vietnam thats answering the
phone, the developer that you hired for the project to fix some... I mean,
we all do it, right, to that point. Were like using perception. At the end of
the day, its going to be the product and does the product work and does it,
does it offer the value that you says its worth?
SPEAKER:
But it... but you still have to have your act together when you walk in the
door.
SCOTT:
Sure, right.
SPEAKER:
You better.
SCOTT:
Yeah. Wear a tie when you go for a job interview.
SPEAKER:
[Laughter]
SPEAKER:
25
SPEAKER:
Um, I need your help in understanding how to balance two things. On one
side, we have got companies that are open to new innovations, new areas,
hot areas, you know, there are some hot fields that get to get... make a little
bit more traction. On the other side, youve got things like, uh, Big boys
only play with big boys. If youre not one of us, then we wont play with
you. You know, asking about startup questions. So, uh, its nice to have
a product champion that can help you go through some of these in the
organization. Uh, but at the end of the day, as an entrepreneur, as a CEO,
were looking at opportunities to say, Shall we work a little harder on this
thing? Are we going to get a result? Uh, we got a result in here? Or
maybe this is... this is going to be a lost case. Were going to waste a lot
of time, spin our wheels, and not get anywhere. [00:44:00] We really
should be looking for another kind of company, uh, a smaller...
SCOTT:
So are you... Im not sure I understand your statement. Are you, are you
talking about a situation where you ask somebody as a product champion,
however, youre not able to progress in sale?
SPEAKER:
You-you may or may not.
SCOTT:
Right.
SPEAKER:
The point is whats the criteria that you use to be able to determine
whether an opportunity is worth pursuing because you really have limited
resources, or an opportunity should be best given up for now and maybe
come back...?
SCOTT:
So the first, the first thing I look for is if Im talking to any of these five
people, uh, the doorman is a little bit less [unintelligible - 00:44:33], but
if Im talking to somebody who said, Oh, I love your product. Im going
to introduce it to the rest of the company, if they say things like, Send
me your PowerPoint, send me your price and your proposal, um, Let me
talk to Bill and Ill get back to you...
SPEAKER:
Okay.
SCOTT:
If they, if they are sequestering your ability to communicate with the rest
of these buyers, if youre... if you think youre selling to another company
26
and you have not identified who these particularly who these four people
are, you are not going to close the sale. And so thats-thats a key, thats a
key aspect. Um, even the user-buyer. Because lets say youre talking to
the CEO. You met the CEO at a conference and he loved your product
and hes going to push it down and he calls the CTO and the CTO is, Yes,
it looks pretty sound. But they dont talk to the user-buyers. What CEO
in their right mind is going to tell all of the salespeople in the company,
Yeah, I knew you had a decent Salesforce but, uh, next week, were
going to switch over to Oracle. Like he might as well put a gun to his
head because the Salesforce is going to revolt, because theyll hate CRMs
anyway and theyre going to tell me I have to switch? So a good CEO
even though hes your product champion and writes the check, is going to
say, You know what? Its going to be important for you to talk to the VP
of sales and maybe even some of our senior salesperson. I want to get
some of their feedback before we make that switch.
SPEAKER:
Okay. So you dont send them the PowerPoint?
SCOTT:
[Laughs] No.
SPEAKER:
You just say, Let me talk to... let me pitch it myself. [00:46:00] Or how
do you say that?
SCOTT:
Usually, though two things will happen. Either theyll say, You know
what? Just send it to me, and theyll actually get a little kind of prickly
about it, in which case, you know that they really actually dont have any
influence in the organization.
SPEAKER:
Right.
SCOTT:
Theyre trying to... theyre trying to pull that information and so they look
like the person that brought this great idea.
SPEAKER:
True.
SCOTT:
Or theyll say, You know what? Now is not the right time, um, but if you
send it to me, then maybe six months down the road, you know,
[unintelligible - 00:46:29] well just wait six months because the product
is going to change by then anyway. So why dont we just wait? Or
27
theyll say, Thats actually a really good idea. And theyll let you in and
theyll help you. So its about, its about understanding whether or not
you have a true partnership with that product champion. Because if
theyre not willing to partner with you and help you champion the product,
then theyre actually not a product champion. They have some ulterior
motive.
SPEAKER:
Right, which is why I was asking about motive in the first place. You
know, sometimes it seems like when you are hunting for product
champions, its... obviously, you want them to look good, you know. But
at what point, if you do send when they do ask for that classroom
material and what Im hearing you saying is [unintelligible - 00:47:07]
dont send them that stuff because you need to get involved face to face
with the next person [unintelligible - 00:47:11].
SCOTT:
Some ways around that is to say, Look, you know, this is, this is for our
new product. Its, uh, its actually... we always get into a bunch of
technical questions around that and I dont always know what those types
of questions are going to be, so rather than me putting you in a situation
where you cant answer a question, how about if we just spend 15 minutes
together talking to your CEO?
SPEAKER:
Great.
SCOTT:
Um, so were talking about this idea of-of how, when, where the prospect
is, who you approach. So in some cases, you have to figure out and you
have to experiment with Who do I contact in my target companies, in my
target pockets? [00:48:00] If you, if you think its best to start with an
economic buyer high up, then do set up your sales and your calls and your
email campaigns and your marketing to address these people whether that
means going to conferences and finding people who are on stage speaking
because these tend to be the senior leaders in companies, whether that
means using... um, anybody heard of Aaron Ross?
SPEAKER:
Yup.
28
SCOTT:
Predictable revenue? Um... so in this case, his methodology he uses in

Salesforce, he sends an email to the top, the very, very top of the
organizations, and says, Who in your company is responsible for making
decisions about that, blah-blah-blah? And that person will go, Oh, its
John. Great. Could you introduce me to John? And it doesnt always
work but its a way to get started at the top and work your way down,
because if John is the VP of sales, he gets the email from Mary whos the
CEO that says... introducing you to John. John, this is Saad. Saad has
this product. Higher, much higher probability of getting that into the
conversation. Um, pull that up [unintelligible - 00:49:00].
SPEAKER:
Sure.
SCOTT:
On the other hand, you might want to start with user-buyers. Thats the
Yammer, the Yammer idea. Thats the business model question. Its also a
way that you can work into in enterprise sales. So, um, theres, theres, uh,
another [tool], uh [unintelligible - 00:49:16] just being really lazy. Its
sort of that time I dont actually know what to do with myself. Um,
theres an author named Neil Rackham and he wrote a book called Major
Accounts... or Major Set... Major, Major Accounts Sales Strategy. And so
what he talks about is approaching that user-buyer and just getting that...
its almost like a customer discovery youre trying to call where you know
that that... lets say youre selling a CRM and you contacted the
salespeople within an organization. Youre just trying to gather
information like, Whats your current CRM, how long have you used it,
what dont you like about it, if you could change something about it, what
would it be? So youre collecting all this information.
[00:50:00] And then you sort of say, Well, look, would you mind taking a
look at my product? I want to get some feedback [unintelligible 00:50:05] using CRMs every single day. And then they go, Okay.
Sure. So you show it to him and they go, Wow, this is pretty cool.
Great! You think maybe we could talk to your VP of sales? So you sort
of... instead of starting at the top and working down, youre actually
29
working on-on the bottom and working your way up. This-this can take a
lot longer because youre introducing more steps to the sale. But it can
also be more effective than just sending a blast or trying to use the top
people who tend to be a lot busier.
So... um, and then the third way, like I said, the product champion, you
might be at conferences. Youre looking for these key titles and just go
approach these people, because a lot of times, theyre very affable.
Theyre in that role because they like technology but looking for new
ideas. Thats why they travel halfway across the country and left their
family for three days because they want to actually go and get new ideas.
So go find those people. So from a prospecting standpoint, its-its where
and how you approach these people, whats the value statement that youre
using as youre approaching each of those people. If its, if... like I said, it
could be conferences, it could be spending two weeks on LinkedIn, right,
and saying, Okay, for the next two weeks, Im going to focus on trying to
find people that are directors of client experience and new technology
adoptions at companies at X size and Im going to hammer away and find
those groups and start contacting those people, seeing if I can get a soft
introduction to them generating those conversations.
That is an experiment. Youre trying to figure out if you could make any
headway talking to those people via this medium, getting in touch with
these people via LinkedIn. The same thing with conferences, you can go
spend... you know, you spend a lot of money on conferences. You want to
be careful about that. But go find two or three conferences and go
prepare, figure out exactly whos going to be there and then call those
people ahead of time, try to set a meeting. If you cant get any meetings
with any of these economic buyers at the conference, chances are like
thats the wrong approach. So try something else. That makes sense?
SPEAKER:
Mm-hmm.
SCOTT:
[00:52:00] So that... all of that is... this is really concept number five.
This idea of buyer types and how youre approaching these people is-is
30
another sort of experiment that you need to run. So a lot of times, you go
to a prospect and you have to pick up a phone call cold. Right? Its not
about that. Its about finding a system, focusing on it for a couple of
weeks, and then moving on to the next one.
SPEAKER:
When you go back to the prospect part of it, I think that a lot of times, its
easier to get an organization to adopt something new they havent been
using than to get them to switch off something that theyre already using.
So trying to get somebody, a-a group of companies and then just transition
them into whatever kind of software youre trying to sell them might also
be a way of segregating at your-your-your buy-in because theyre going to
be an easier adoption getting some of the office system that theyre
already using if its in the same category.
SCOTT:
Yeah. I mean, that depends, too. So theres two schools of thoughts there.
Um, one is that... lets say youre, um, I dont know, youre selling to law
firms and youve got a product that competes with LexisNexis. Okay?
Youre like, Wow! Theyre already using LexisNexis. Like well just get
them... we got a better version of LexisNexis. Its like well just get them
all to switch over. Right? Thats really, really hard.
On the other hand, if youre dealing with, uh, 10-person law firm that
actually doesnt use LexisNexis for some reason, youre trying to get them
to use some kind of online research facility, theyre like, Oh, weve been
in business for 50 years. Weve never used online research. Why would
we start spending $50,000 a year with you?
SPEAKER:
No, but if you got...
SCOTT:
So they got... so its what...
SPEAKER:
... a new, a new firm maybe thats forming up thats now...
SCOTT:
They probably may not have any money.
SPEAKER:
... deciding...
SCOTT:
So the... so the concept is... and so what I want to drive home is that when
you are selling into a new market against inertia, not a competitor,
sometimes you have to do whats called a double sale. You have to sell
31
them on a concept that this is a problem thats worth outsourcing the

solution somehow with a product or service. [00:54:00] And once they
get to that point, they go, Yeah, I think youre right. We should probably
take a look around at all the products and services that would solve this
problem. So Im really glad you brought this to my attention and youre
going to be part of the pool of people that we evaluate. So now, you have
to sell them on your product.
SPEAKER:
Mm-hmm.
SCOTT:
So real estate brokers are just a good example of that. Theres-theres a

ton of real estate technology that comes out every couple of years. People
are like [unintelligible - 00:54:22] brokers, you know, they would just use
this. It would solve all their problems. Well, theyre just brokers. That
aint going to change the way they do business whether its contracting or
prospecting or... or websites or whatever. So its... it can be really hard to
achieve that double sale in your, in your [unintelligible - 00:54:37].
Now, on the other hand, theres new brokers that pop up all the time and
theyre trying to be with the old [style you] guys and theyre like a new
company. Im going to take a brand new approach and Im going to do
this. Nobody else is using a product like this. Thats going to make me a
lot more efficient. My agents going to be able to sell more houses on it.
So its-its about doing the right... having the right needs analysis and
making sure you got the right prospect.
SPEAKER:
Cool.
SCOTT:
Um... so in terms of, um, in terms... and so people have asked, Okay, so
now, youre telling me I need to experiment with value statements. You
have to experiment with the way Im approaching it, who Im
approaching, all of these things. I usually tell people Ill take like literally
two weeks of time. And in two weeks, if possible, you do a hundred
phone calls or a hundred [unintelligible - 00:55:28] specifically not
emails, and-and/or do 10,000 emails. So, a hundred calls for introduction
could be another way. So lets say you [unintelligible - 00:55:41] and
32
you want to find people that are VPs of client experience, or youre trying
to find a VP of engineering. Youre trying to find CTOs of companies.
You need to do 100 directed sales calls to those people, followed by calls
where you actually know who that person is, you have some background
on that person, you have a targeted value statement for what your product
does.
[00:56:00] If you do a hundred phone calls in two weeks time, thats 50
calls a week, 10 calls a day. Okay? Make 50 phone calls and you may
end up leaving 90 voicemails. If you leave 90 voicemails and you get zero
people calling you back, either your voicemail message sucks or theres
just not any interest in your product. Or maybe you actually get a hold ofof the 10 people you do talk to, and all 10 of them are like, Yeah, not for
us. So that means you either need to change your value statement that
youre using or maybe thats not the right approach.
So within two weeks, you should be able to hammer out a hundred calls to
whatever buyer youre trying to reach, or use whatever value statement
youre-youre-youre trying to use. And frankly, you probably will know
in less than those calls. If youre within a hundred calls, youre going to
know, because youre getting 20, and thats like [unintelligible 01:32:03]. I got to change something up. So maybe you tweak your
value statement, but make sure you-youre measuring that and you know
how you tweak it. Dont change too many things at one time.
SPEAKER:
Um, [unintelligible - 00:56:59] it-it talks about if-if-if in this case you
want to talk to the user-buyer, and theyre the one wholl be buying your
product, you express the...
SCOTT:
Well, if theyre the user-buyer, theyre using the product. Theyre not
buying the product.
SPEAKER:
Okay, technical buyer. If the technical buyer is going to be buying your

product, then you would not want to, uh, contact them. Contact the person
above. Learn... do your study and learn about the person above so that
33
when you find out... you ask them, as you mentioned earlier, Who is, who
is it in your organization who would...?
SCOTT:
Right.
SPEAKER:
You know, so it gets handed down as a psychological, you know, uh, uh,
motivation for the person that gets...
SCOTT:
Yeah. Thats-thats part of what-what, you know, Rackham talks about

when youre approaching a user-buyer, just doing your research and
understanding fundamentally the structure of that company, how they
make decisions, what the current processes are, what the current systems
are, so that if you do get elevated to that type of buyer, the economic
buyer, youre able to approach them in a knowledgeable way.
SPEAKER:
Uh, opposite. [00:58:00] Uh, this approach, the-the... how we get in. You
mentioned especially going to the top and... and then getting funneled
down. So I think thats...
SCOTT:
Yeah. And thats a little bit of what this guy is doing. Yeah. Yeah. A little
bit.
SPEAKER:
Im sorry?
SCOTT:
Thats a little bit of what this guy is doing though. Frequently, you will
actually want to have a good...
SPEAKER:
Yeah. Thats what, thats what [unintelligible - 00:58:15].
SCOTT:
... conversation with this person. A lot of times, they will just say, Oh,
you need to talk to Sally. Shes our CTO. She handles all these
decisions. So you dont get the opportunity to do that reconnaissance
work. If you can, then great, you know. But ultimately, if youre able to
reach this economic buyer and have a conversation, then you may not
need this person. This person actually may not be the final decision
maker. Theyll just influence the economic buyers decision.
SPEAKER:
Out of the two weeks and a hundred calls, how do you... what would you
call would be a success? How would you measure success?
34
SCOTT:
Were going to talk about stages in sale in just a minute. So youll have,
youll have an idea of how far youre getting and if youre getting to the
right place.
SPEAKER:
So you know youre engaging us now. Were asking questions that are...
SCOTT:
Right. Yeah. Whats that?
SPEAKER:
Youre engaging us now. Were-were asking questions so... thats good.
SCOTT:
Its awesome. So... so thats... lets see. Prospecting, thats kind of

concept six. Running out of room, just remarkably running out of room in
this enormous board here. Hows everybody doing? You guys still in
tune? Youre getting [unintelligible - 00:59:19].
SPEAKER:
Could you differentiate between one and six, prospecting and customer
discovery?
SCOTT:
Customer discovery... prospecting means that youve already figured out

what market youre going to go after. Youve actually... customer
discovery is like when youre first starting. You like wake up one morning
and youre like, I got this great idea for a way to rejuvenate windshield
wipers before you even have a product. Youre going to go and start
talking to people whether thats, you know, potential distributors or you
might hang out at a gas station and just talk to people as youre filling
your gas. Youre like, Hey, you know, its raining out. Hows your
windshield wipers? Like, Well, theyre really bent. Well, Ive got this
thing, let me... this idea. [01:00:00] You know, you dont even have the
product because you havent built your MVP. Thats customer discovery.
SPEAKER:
Okay.
SCOTT:
Yeah. Now, frequently, you get... you should, you can go back to the
people you talked to during customer discovery. You say, Hey, remember
six months ago I was thinking about this product? Well, we actually have
it built now. Do you mind if maybe we take a look together? And they
tend to become and should become a prospect. So you...
SPEAKER:
So-so youre well in the build-measure-learn cycle out here. Thats the...
35
SCOTT:
Youre-youre... well, in this case, youre actually here because youre

selling your product. Thats what prospecting is. Here, youre just
starting up your idea, idea stage. Okay?
SPEAKER:
Yeah. Thank you.
SCOTT:
Um, so lets say you start the sales process. Youre able to initiate the
sales process because you talked to a product champion or you talked to a
user-buyer, you talked to an economic buyer. Well, and just now, youve
done all this work, now you get to start. Thats a good pitch. You get to
start the sales process. Right? Yeah. Um, so this is a little bit more
forward thinking as where you are in the company but its something... its
an important concept that I want to stress. And thats the idea that... um,
another experiment that you can kind of run is thinking about the way that
you divide territories or what is the-the actual linear process that happens.
So, as an example, lets say you get a web lead for your website. Well, do
you send that web lead directly to the salesperson that you have working
with you? Or do you have somebody qualify that person? So do you have
a qualifier who then dishes it out to... well, lets just go down to the email
drip. These are not really a lead. Or this one is actually a big customer
potential. Im going to send this to our company CEO, you. Or this one
is a medium-sized person and were going to send it to our salesperson.
So its very different. You need to, you need to think about that.
[01:02:00] So I-I worked with a company called [unintelligible 01:02:05] that does recruiting software, software for recruiters. And the
way theyve defined this is when they get a web lead or any kind of
inbound lead, they have a person that qualifies it, basically using a fivequestion script, who they are, how they found out about them, what kind
of positions they are looking to recruit for right now, is it a job engineer, is
it a... somebody who has PhD, whatever, and then based on the size of the
account, if its somebody that would be potentially an enterprise, a
hundred, um, $30,000 or more per year, then the CTO takes the sale. If
36
its under $30,000 a year, it goes to their director of customer

development.
Thats the division. So its very simple but its very... its-its a very clear
process that they figured out for them. It used to be always right, too, that
that is a customer development person. What he found was that he was
spending a ton of time trying to qualify people and that wasnt time well
spent, if hes... that time could be spent by somebody else. And likewise,
before John, whos the CTO, had a salesperson, he used to handle
everything from web lead to call. He was like, I can get anything done.
Right? So you want to think about that in terms of... thats-thats
something you want to play around with a little bit. Whats optimal for
you internally? Whats the machination for you as a company thats going
to optimize the use of your very precious time?
The other way to think about it, too, is, um, remember that startups... this
is a big lean... uh, big lean mantra. Startups are not small versions of big
companies. Right? And Ive [unintelligible - 01:03:38] at this job. Ive
done this is several sales organizations and then so, well, I used to work
at Pierson. At Pierson, we had 250 salespeople and we divided everything
up by territory. So now I work at Aplia and we have 12 people working
here and Im a salesperson, the CEOs a salesperson, and one of our
engineering product people is a salesperson. So were just going to divide
the con, the con, the-the-the country by three territories. [01:04:00] Like I
took California and Nevada, Arizona, Texas, and all the foreign places.
But I took Las Vegas, too. Like, Ah, these will be your...
Well, it turns out that may not have been the most optimal way to think
about it because we were selling to economists that were teaching at
universities, the university software... education software product. Maybe
what we should have done is qualify the way that people teach their course
or which courses they teach, and said, Okay, well, all the professors
that... and economists that teach microeconomics go to Scott, all the
professors that teach macroeconomics go to Sally. Or maybe it should
37
be, Hmm, all the four-year universities go to Nicholas and all the twoyear colleges go to Scott. So you have to think about things not just,
Well, well just do it this way because that seems to make sense. We
need to think about... sometimes, its just based on the people you have in
your company.
Um, for a-another company I worked with Altos for a long time. For us,
what weve learned is that the best way to, um, grow... the-the best way to
migrate somebody within the company was we had... we hired this girl,
Kristin, who was... started off as customer, um, customer service. Then
we moved her into ret- what we called retail sale which is basically selling
$80 subscriptions per month. She did that for about two years. Then we
moved her into broker sales where she was selling $500 a month
subscriptions. Now, shes doing data sales there, selling $2000 to $3000
per month. So as shes growing and own-own... understanding the market
and shes developing as a salesperson, we didnt just keep her as customer
service. We didnt just keep her as retail. We learned that actually, shes
gained enough knowledge that she can move up that food chain and talk to
these more sophisticated buyers with longer-longer sales, uh, timeline.
So you need just ways to think about the way youre organizing your sales
territories. Thats something else that you want to sort of consider in
terms of... again, a little bit of an experiment there. [01:06:00] You want
to maybe try it out for yourself for a couple of weeks. Ill take all the
leads, or Ill just take all the leads for this type of account or in this
particular industry or this particular vertical and then see how that works
out for you. That makes sense?
SPEAKER:
Yup.
SCOTT:
You know what time it is? [Unintelligible - 01:06:16] Uh, so we got

about 15 more minutes before were... we can, you can do more Q&A. So
the question in the back was from... whats your name?
SPEAKER:
Jack.
38
SCOTT:
Jack? So Jack had asked, okay, Well, how do you know if youre making
progress or not in a sale? So, primarily in an enterprise or B to B sale...
SPEAKER:
[Unintelligible 00:66:45]
SCOTT:
Whats that? Whos-whos doing spitballs?
SPEAKER:
Oh, we-we were talking. He said, How do you know success? He said,
By the checks you get.
SCOTT:
By the checks you get.
SPEAKER:
And what I said, Well, its-its... uh, that-that takes too long. You need to
know before you need to get to that stage.
SCOTT:
So this is just one way to-to think about stages of the sale. Um, but I like
it because its-its only four stages and it helps to... one, two, three, four.
Okay. So the four primary stages of the sale when youre dealing with B
to B or enterprise sales are one, needs analysis, two is evaluation of
options, three is resolution of concerns, and the fourth is implementation.
There is... theres no quotes.
SPEAKER:
Quotes.
SCOTT:
Its not going to [require Ross].
SPEAKER:
[Laughs]
SCOTT:
Okay?
SPEAKER:
The point is to get the guy to sign one on one.
SPEAKER:
Right.
SPEAKER:
You can [unintelligible - 01:07:55].
SCOTT:
Yeah, exactly. Um, so the idea here... the needs analysis is that opening
conversation that youre having. [01:08:00] So once you... in that initial
approach to any of these buyers using a specific value statement that
youve created, that should lead to a actual conversation, because there are
two people that are trying to solve a very important business problem. So
if youve identified and youve-youve created a good value statement for
that target person in the medium that makes sense, whether its at via
email or like dinner or a conference or whatever, that leads to where we
want to be which is, Hey, Im actually talking to this guy about his
39
problems. Right? Youre getting there to tell them to tell you their
problems.
If after two minutes of the conversation like, You know what? That
sounds really cool; why dont you send me an email and then Ill check it
out with my team and then Ill get back to you? you dont have a lead.
Right? So this should be a conversation or even a series of conversations.
A lot of times, you might have like a quick 10, 15-minute conversation at
a, at a conference or you get a warm introduction and you call the person
and you go, You know what? This sound... actually sounds really good.
Um, what Id like to do is have you talk with John. John is our VP of
engineering. Maybe he can shed a little more light on our process here.
So once you start having this now, we havent talked about... you know,
youre not doing a product demo. Its just conversations, right? Youre
doing needs analysis. Youre identifying specifically... you have an idea in
your mind, right? You have your customer in mind when you create your
product. You create your product that you think you can sell. Youre
trying to create a lot of these customers. Now, what youre trying to do is
get that customer to self-identify the specific needs that they have in their
organization.
So those needs may be, You know what? Our customer service system is
really... is not as optimal as wed like it to be. It turns out their
cancellation rate is in the 40 percent range. Um, historically, its been in
the 20 percent range. So the cancellations have been going up a lot
faster. Oh, interesting. Thats a need that theyve told you if youre
selling your customer, um... I guess about Zendesk, a Zendesk
[unintelligible 00:66:45]. [01:10:00] Right? So the idea here is you
need to collect as much information so that when you do present your
solution, that youre hitting the hot buttons that that person has.
So going back to-to Jacks question, the first signal that... whether or not
youre progressing in sale in an enterprise environment is whether or not
40
youre having a significant need, needs analysis conversation. And it

should start with, you know, a 10-minute and then maybe 30 minutes
down the road. It could be 10 minutes with one person and then they ask
you to go talk to other people or you ask to talk to other people. This is all
before youre showing your product. Youre just trying to assess the needs
of the customer. Once you understand the needs, then the next stage is
like, Oh, okay... Any question?
SPEAKER:
No.
SCOTT:
No. Okay. Once you understand the needs, now its about, Hmm, we do
have this need. What option should I consider as a company to solve this
need? So that might be your software or product versus other software
competitors that are out there. It might be your software versus continuing
to do nothing about the problem. Right? Theyre evaluating what options
are available to them. And frequently, this is where youll do a product
demo because they want to see how it works. And the importance of
doing good needs analysis means that during this demo, youre not
showing 67 links, buttons, functions, features in your product. Youre
showing like three things that they care most about. The rest of the stuff is
superfluous.
So its important to do good needs analysis, and that in itself is a signal for
you. So if you talk to someone and they go... in two minutes, they go,
Oh, let me see it, and you havent done needs analysis, how do you
know what to show them? Or then they go, Oh, wow, its pretty cool.
Yeah, send me an email. Or, Let me... Ill send them for a trial. Ill let
you know what I think. Right? So thats why its so important to do this
needs analysis so that you know what to show in the demo.
The next stage is, okay, you show the demo, theres a couple of people
involved, theyre kind of talking about it, and then they decide, Okay, we
actually have some questions now. [01:12:00] Thats the resolution of
concerns. We used to call them objections. I call them questions.
Because theyre really just... its a case where... its a big... its a, its a
41
business decision. They have questions, whether its risky to work with a
startup company, or they dont know how much its really going to cost, or
theyre worried about is it going to do what you say its going to do all
of those things. They have certain concerns.
And once you get through, if you get sort of stuck in this place, the
resolution of concerns, if you keep hearing things like... I wrote down a
few things here. If you hear things like, Oh, yeah, probably its too
expensive. Like that means youve got... probably done a demo and
theyve asked for a proposal, whether formal or informal, they go, Oh,
its too expensive. That means you havent shown enough value. Right?
Thats-thats the deal [we stalled] here. They had a question and about
price and you werent able to solve... to answer that satisfactorily.
Um, with sale, its hard to integrate. It seems like its hard to integrate. It
seems like there would be too much to kind of add to our-our-our
processes right now. Thats stalling at this... thats a concern that they
have that you were not able to resolve. Um, no, its pretty good. The
timings not good. Right? Oh, I like the product. The timings not good.
We just brought in a new VP of engineering. Let him get his feet on the
ground and then he can demonstrate it for us, you know, in a few months.
So why dont you come back, come back to us in six months or three
months and well-well take another shot at it?
So these are all concerns that they have implementing your product. And
then finally, implementation is just that. So if-if youre losing sales once
you get to this point, you really suck. Like thats the point where theyre
like, Yeah, we have a need. Yeah, we like your product. Youve
answered all the questions. Wed like to get started. And you screw
something up. That means that you really screwed something up, because
theyve made that decision all the way through.
So that is called implementation because youre always selling even after
you close. [01:14:00] Its like the minute that you find out theyre going
42
to use your product, what do you do? One hour after that, what do you
do? One day after that, what do you do? One week after that, what do
you do? How do you make sure that that person has a really positive
experience in implementing your product?
SPEAKER:
So wheres the contract and payments and that kind of [unintelligible 01:14:18]?
SPEAKER:
[Laughs]
SCOTT:
Thats usually in here.
SPEAKER:
2.5
SPEAKER:
Oh, okay.
SCOTT:
Yup. Um, how many people have heard sending a proposal? Yeah? How
many times do people get back to you and go, That proposal looked
great; were ready to get started?
SPEAKER:
[Laughs]
SCOTT:
Never.
SPEAKER:
SCOTT:
Because proposals here which means they want to find out everything
about you and your price and you probably dont even know what
objections theyre going to raise, so they actually use that as a starting
point to raise objections. Like, Oh, okay, yeah. Send us a proposal.
Youre like, I actually dont even know how many users there would be
but Ill just take a guess and Ill price that 50 users at 50 bucks each a
month. That sounds pretty good. Then you put in the proposal and they
get the proposal and theyre like, Users? The company is like five. And
then all of a sudden, the deal has blown off because you dont have
enough information. So these stages in between the proposal should be
negligible. Like the proposal is, Ill send you a contract then we can
review the contract together. Tell me exactly what would need to be in the
contract, how many users, what kind of pricing do you guys have, what
kind of budget do you have those sorts of things. So these are actually
43
really short stages, proposal, contract, implemen- and then the

implementation is really long-term.
SPEAKER:
So if somebody jumps in and say, Show me what youve got, and say
like, Let me, let me get to know you, or, Let me know what...
SCOTT:
Yeah. I mean, Ive seen really, really senior salespeople that will refuse to
show the product to someone before they have at least a 10-minute
conversation or even a 5-minute conversation and say, You know what?
Our product does like literally 10,000 things. Just tell me a little bit
more about what you do. [01:16:00] Oh, youre a trader. What do you
trade? Oh, were in the equity markets. What do you trade in the
equity markets? Oh, homebuilders. Okay. So are you guys in the long
position, short position? Are you a hedge fund or are you an investment
bank? Just sort of trying to get a little bit of information and then ask if
you need anything else, questions like, Well, what about your current
process? Are you unhappy with it right now? Youre like, Well, okay.
Actually, Im not unhappy with anything. I just heard about you guys at
one of the... I saw you were sponsoring the conference. So I figured Id
swing by [unintelligible - 01:16:27].
So I mean, thats-thats... I mean, we get excited. We get like, Oh, show
me the product. And we all think, Oh, the product is going to sell
itself. The product doesnt sell itself. Your ability to show how your
product solves problems is what sells the product. And thats why you
have to do the needs analysis first. If you dont get through that stage, it
doesnt matter how good your demo is and how good your product is,
because youre not able to show how that demo or how that product solves
the needs that they have.
SPEAKER:
So does pay... does pain sell better than reward?
SCOTT:
It depends on the client. Usually, you want to actually have some balance
of both.
SPEAKER:
Mm-hmm.
SCOTT:
Because that will make sure youre hitting on all cylinders here.
44
SPEAKER:
And-and the question, what was the...?
SCOTT:
Oh, the question was, Do you sell on pain or do you sell on pleasure
basically is the word?
SPEAKER:
No, well, obviously, you want to sell on both if you can but, uh, if-if
theres no pain, youre just bringing desire... like everybody would like to
make more money, but unless a company is like having a bad year...
SCOTT:
Then that would be a place that youre not optimizing your sales.
SPEAKER:
Im sorry, what?
SCOTT:
If somebody says, Well, we dont have any problems right now, were
just looking to increase sales, well then their pain is [not] optimizing their
sales operation right now.
SPEAKER:
Okay.
SCOTT:
[Unintelligible - 01:17:45]. So, um, where am I?
SPEAKER:
[Unintelligible - 01:17:49] sale.
SPEAKER:
So if-if we... so would-would you advise against being aggressive, like

come showing up when you, when you do the demo, look at contract
writing?
SPEAKER:
[Laughs]
SPEAKER:
[01:18:00] Like... I mean...
SCOTT:
Yes, I would advise against that.
SPEAKER:
Okay. Okay. Okay. But its... I mean, you dont know how serious they
are until theyre-theyre ready to... if-if they look in your stuff and invest...
SCOTT:
If theyre that serious, theyre going to forgive you for not having a
contract.
SPEAKER:
You can turn...
SCOTT:
Yeah, were not, were not selling these products here. I mean, its like,
Uh, you know, its a great-great price for Mercedes, you know, like
going, Theres two people coming and they told me they were coming at
2 o'clock today. You better sign [in] now. It doesnt work that way in
enterprise sales. These people are putting their careers on the line by
making decisions about some of these products.
45
SPEAKER:
Correct.
SCOTT:
So...
SPEAKER:
Okay.
SPEAKER:
[Unintelligible - 01:18:41] answer through budget in there. Um, is

anybody going to answer that question, tell you what their budget is for
the product or service?
SPEAKER:
[Laughs]
SCOTT:
So who-who answered that question or how do you...?
SPEAKER:
Does anybody answer it? Um, like, you know, if I was the guy buying the
thing and somebody asked, What is your budget for this? and I say, you
know, Close to free as I can get.
SCOTT:
Well, theres-theres two ways to think about it. One is if theyre using a
competing product, youd probably get a pretty good feel for what theyre
spending.
SPEAKER:
Okay.
SCOTT:
If theyre not using a competing product, then you can ask... a question
that I will ask is, um, How-how have you evaluated other solutions for
this situation or this problem? They go, Well, weve looked at so-andso software but we didnt think it was a good fit or it was too expensive.
And that starts to fil-buil-build the work, their, the framework and the
models to what you can charge.
SPEAKER:
And some will tell you their budget.
SCOTT:
And some will tell you.
SPEAKER:
If they dont spend their budget, they dont get it the next year.
SCOTT:
Yeah.
SPEAKER:
[Laughs]
SCOTT:
Yeah. Some are like that.
SPEAKER:
So some guys will tell you their budget.
SCOTT:
Yeah. And thats where you can get creative in terms of things like
financing or... well, somebody... like even right now, its June, and some
46
people are like, Well, you know, were getting kind of slim in our budget
and we dont, you know, we dont really have 50k for a one-year license.
You go, Okay. [01:20:00] Well, why dont we do $15,000 between now
and the end of the year and then well do a new contract starting in
January that starts the new price? Things are [unintelligible - 01:20:10]
For the first... you know, the first two months, its a fixed price of $5000,
the next two months its $10,000, and then by month five, you get to the
full monthly rate. So its sort of a way for them to-to smooth out the cost.
So its just a way of being a little bit creative with people.
So... um, so somewhere I lost a number in there. Because number 10 is
you do all of the stuff and you do all of these experiments
SPEAKER:
Wheres number 9?
SCOTT:
And youre still not selling anything. I dont know, I dont know what...
SPEAKER:
[Unintelligible - 01:20:38] was eight, wasnt it?
SPEAKER:
Eight, eight, or nine.
SPEAKER:
Yeah, you jumped a number. Yeah.
SPEAKER:
Thats the seven actually.
SPEAKER:
[Laughs]
SPEAKER:
Thats the seven.
SCOTT:
Oh, seven.
SPEAKER:
Yeah, seven there.
SPEAKER:
That is very, very [unintelligible - 01:20:46].
SPEAKER:
Another solution?
SPEAKER:
Yeah, it doesnt matter anyway.
SCOTT:
Were not leaving this room.
SCOTT:
I screwed up.
SPEAKER:
Actually, theres only nine steps. [Laughter]
SPEAKER:
Its actually nine.
SPEAKER:
That is funny. Steve?
47
SCOTT:
So the last one, um, is, you do all of this, uh, you know, you put together
all of these different sales experiments and youre still not selling
anything. The 10th step is maybe youre still here.
SPEAKER:
Mm-hmm.
SCOTT:
As much as that sucks to hear, you may actually still be here. So thats
one of the reasons why you try to iterate as much as you can. And itsits... beli-believe me, I know its-its really hard. I, its, I cant stand here
and say, Id run all of these experiments for all these biotypes in different
market segments with all these things for every product that Ive run, Ive
worked with. But I can tell you that there are certain things that I do do
whether its a two-week approach to hammering away at LinkedIn on a
certain thing or a two-week approach to [01:22:00] Ive got this big
conference coming up and I can see who the speakers are and Im going to
dedicate every hour of my life for the next two weeks setting up
appointments and making sure I know where those speakers are so that I
happen to bump into them. Um, damn it, I just used air quotes. Ugh!
SCOTT:
That I happen to bump into them at the conference. And then after the
conference, Im going to send emails to the people that I didnt get a
chance to talk to and see if in fact, that was the right place for new
prospect. Ive done all of those things. The value statement is a big deal,
understanding exactly What is that message that you want to get through
to the economic buyer? How does that differ for a technical buyer or a
user buyer or product champion? Ive done all of that. So you do need
to... its really... its impossible to do it all. And thats where you have to
use your intuition. You have to know that youve done... dont forget
about the research that you have done from the beginning and that you,
um, you at least [spit] it out as much as you can, so that if you, if you are
selling, and if you are going to reach the scalable or repeatable place, and
you can get to this happy place where youd put those in each and...
SPEAKER:
[Laughs]
48
SCOTT:
... put them in highlight. And if not, you have to decide, Do I start over
or do I just scrap this idea and move on to the next, the next step? So...
SPEAKER:
So, um, to avoid doing a whole bunch of work and then realizing youre
still there, Id really like to figure out that sooner. So what Ive heard, like
a rule of thumb, that if you have a product-market fit then you have to do
something to keep them scaled. And its like you present a response that
they recommend you to somebody else. Um, are there other kinds of
metrics that you can look for to see if you really do have a product-market
fit before you do a whole lot of work trying to scale something thats not
scalable?
SCOTT:
Well, I mean, part of it is actually getting your MVP and if you get really
adopters pretty quickly. You know, you go back to the people that you
started with discov- sort of discovering them; you can talk to, lets say, 20
people. [01:24:00] And, you know, roll out your MVP, you show it to
them, and youre getting, you know, five, six, seven and those people go,
Yeah. Thats-thats good. Ill buy it, even if its at a lower price than
what you were intending to spend. Its a pretty good signal that youve
got something going on there. If you get 0 out of 20 or that two people are
willing to use your minimal viable product and, Well, lets use it for free
for six months and then Ill let you know, thats a bad sign. Okay? So,
yeah, I mean, there are signals in here that you should be able to know that
whether or not youve got the ability to go from this validation to creation
of product-market. What were talking about here is once you get to this
creation point and youre trying to have a [way], maybe you-you already
have some adopters [unintelligible - 01:24:40]. I had mentioned that
companies with five adopters, they pay $20,000 for the perpetual license.
That was them growing out their MVP. And now, theyre at this point of
customer creation and now theyre trying to deploy some of that stuff,
so yeah.
SPEAKER:
If you are, uh, bringing, uh, uh, your MVP to the market for the first time,
and lets say you identify, Well, I think these are my five different
49
segments or verticals or however you want to frame it, I think I can sell.
Uh, so what do you do? Do you come up with like 5 or 10 or 20, uh,
potentials for companies that you can hold and try to get into, like your
two-week [unintelligible - 01:25:19]?
SCOTT:
I would take, um, the five or six segments that you just said that you have
and pare that down to one or two.
SPEAKER:
Oh, okay.
SCOTT:
One or two only. Uh, I just had a call today with-with a woman who does,
uh, worker locating. So its like SMS timecard keeping for people that do
like outside work, whether its consulting, janitorial, cleaning, healthcare,
you can find it in home healthcare services. Basically, its a really... it
turns out as a really big problem. If youre a manager on a company, you
dont actually know when that person showed up or left, but they filled out
a timecard.
SPEAKER:
Correct.
SCOTT:
Okay. Im losing some money there. And theres actually... theres

Compliance Risk Management, Workmens Comp stuff. So shes telling
me theres all of these different markets that she-she can sell-sell to, and
what-what she should do. [01:26:00] I said, Pick one. Lets spend two
weeks, pick a... find out where these people hang out, where-where you
can reach the decision makersand she thinks its a small business
segment people that are, you know, 20 to 50, 100 employees that are...
have these armies of people go outfocus on that for two weeks, and see
what kind of take you get. If youre not getting any response from home
healthcare, maybe theres some issue that you dont know about within
healthcare. Lets try it with janitorial. Lets try it with plumbers. Lets try
it with people who do property inspections. Lets try it with appraising. I
dont know. I mean, but if you try to do all five at once, youre not going
to be able to speak intelligent and... intelligently to any of the people in
that market.
SPEAKER:
Well, I think...
50
SPEAKER:
Well, if you dont... so-sorry. Hold on a sec. Uh, if-if you dont know
which one of the five might be the best market segment, then you go rotate
until you find all five of them. I guess thats part of the experimentation,
isnt it?
SCOTT:
Yeah. I mean, thats-thats part of the... I mean, you should have done a
little bit of this customer discovery to have a feel for where you think the
problem is that they got.
SPEAKER:
Right.
SCOTT:
So...
SPEAKER:
Well, I think thats [unintelligible - 01:27:02] on your prospecting, too,

which we didnt really touch on, which is prequalifying. When you, when
you do contact your buyer types and say, you know, Do you use that type
of contractors? In that particular case, you have a group of outside
contractors that youre using [unintelligible - 01:27:19]. If they say no,
throw them off your list and you go out to someone else. So you got, you
know, a prequalified...
SCOTT:
Well, yeah, or just general employees, I guess. If you have employees that
are doing this, then chances are theyre a good lead. But if you ask them,
you know, How are you tracking their time? then you go, Well, with
timecards. Isnt that how the system...?
SPEAKER:
Right.
SCOTT:
Youre like, Okay. Well, if I could show you a way to be more accurate,
plus, it will be at any Workmens Comp risk engagement compliance
issues that are out there in the state of California, is that something thats
interesting? Yeah, thats interesting. Great.
SPEAKER:
SCOTT:
That shouldnt be a problem.
SPEAKER:
Yeah.
SPEAKER:
What could I do that-that would be more customer discovery than on the

customer creation? [01:28:00] Because if you havent identified the
51
segments of the population for prospecting, then you have to go back to

the drawing board and discover [unintelligible - 01:28:07].
SPEAKER:
Youre way down on prospecting?
SCOTT:
In her... yeah. So in her case, she built the MVP based on her husband is a
contractor.
SPEAKER:
Oh, okay, okay, okay.
SCOTT:
So... but as she was building and talk- just talking to people, shes like,
Oh, my gosh! They could use it here, and they could use it there. So
she-she tried to sell it to contractors who hasnt had a ton of success. So
thats where shes trying to figure out, Okay, where, are there other
advocates that I could be selling this product? And theres 50 of them
essentially. So lets choose one, work on that for two weeks, figure out
what you can learn, and if its working and youre selling a couple of these
things, youre a hell of a lot better off than you were two weeks ago. If
youre not selling anything, and then you should know its a whacked up
market for now so you can figure out how to really direct the market at
those people and then you go into the next one.
SPEAKER:
Okay.
SCOTT:
So...
SPEAKER:
Contractors arent really adopters, just so...
SCOTT:
Yeah.
SPEAKER:
Ill give you an example. We were doing cloud computing and I have a
main market [unintelligible - 01:28:59] and, uh, the message for, um... the
main market required no discovery because we were with MPLS and these
people are in the internet. So there was a big disconnect.
SPEAKER:
The product launch and all that? Too forward?
SPEAKER:
We were prospecting when we had the discovery.
SCOTT:
New product people shouldnt use names.
SPEAKER:
SCOTT:
So those are sort of the end of my formal comments. I appreciate all your
questions. Im-Im happy to hang out and ask some more. I know theres
52
a lot of people that, uh, will probably network with each other. I would
also appreciate it, if you wouldnt mind, just sharing your email address,
um, just like to keep you in privy to other stuff thats going on. Im
hoping to do it more with-with Ray and more stuff down here in Orange
County. So... I dont really have any big conclusions, even though Im
supposed to.
SCOTT:
Close.
SCOTT:
Im moving on, moving to the next one.
SPEAKER:
That was an excellent [unintelligible - 01:29:57].
SPEAKERS: Yes. [01:30:00] [Applause]

SPEAKER:
So, um, I [unintelligible - 01:30:12] invite Scott down here to have a

continuation to the class.
SCOTT:
Yeah. So, I mean, I do, I do, I do a full workshop where we actually work
on your business and we-we actually go through ideas for prospecting and
its a, its a full three-hour workshop. Um, Im actually working on a fullday workshop as well and a whole two-week sales camp. So all kinds of
ideas and you guys have great ideas down here but they need to get fed,
so...
SPEAKER:
Yeah. Were doing probably three or four hours of workshops, probably

Saturday, [unintelligible - 01:30:41]. Uh, and, uh, so its just... I think its
really useful. Thank you so much, Scott.
SCOTT:
Thank you.
SPEAKER:
How do we find out more about those workshops?
SCOTT:
Um, make sure you give me your email address, and then also Ill be
working with Ray to make sure you get the-the message on that.
SPEAKER:
What we do is part of the OOC lean, uh, circle. Uh, so we-we... uh, how
do you find out about us, through Meet Up or...?
SPEAKER:
Meet Up.
53
SPEAKER:
Yeah, Meet Up.
SPEAKER:
Meet Up. Yeah.
SPEAKER:
So its a group.
SPEAKER:
Well, we just... uh, we want you to bring, uh, more people, lets try to
come down here and then the books will be [included] also. So, uh, thank
you so much and, uh, also, uh, uh, we have a new guest here. Steve is one
of the senior TCA member and also, uh, uh, very, very seasoned
entrepreneurs and investors. Uh, so, uh, with anything-any-anything you
want to talk about, investments, tips, sources that you should talk to. Uh,
thank you so much for the time, appreciate it. And then, uh, see you...
hope to see you soon.
SCOTT:
Yeah, all right.
SPEAKERS: [Applause]/AT/mb
54

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SCOTT:

Yeah, just real quickly. Will this also apply to SMBs?

Small, medium, um...?

No. Sure. Yeah. When I, when I say enterprise...

Yeah, non-consumer. So its-its... youre not, you know, not... if youre a

Its a compilation of different...

Or did he get that from another source as well?

The Lean Startup? So Eric-Eric Ries?

So the Lean Methodology is something thats been deployed for actually a

So if you remember, theres sort of four processes in line. So theres

Oh, customer creation.

So basically, your-your MVP is your alpha. The customer creation is your

And was 50 just a number you pulled out?

Its three words.

Build-measure... build-measure-learn. Right? And so youve got build...

I think Ive gotten exactly the right amount of caffeine in my system.

Um, you mean where geographically or where in the...

Where in the process.

SPEAKERS: [Laughter] [Crosstalk]

Um, on-on different messaging, different verticals. Um...

How do you determine?

Yeah. In an ideal world, youre actually running but it is not a linear

[00:18:00] Yeah. Youre doing both at the same time.

Ask him to write you a check.

Ask him to write you a check.

You can always sell what you dont have.

Fifty percent now...

The other 50 percent upon delivery.

Building potential clients.

Yeah. Yeah. So I wouldnt confuse size of revenue with size of the

What-what... we-we actually have an interesting situation where we do a

Well, you can also marginalize, uh, the situation.

Yes. They were going to bring in [unintelligible - 00:26:50].

Thats actually the next two sessions.

Hmm, no, not always... not a gatekeeper.

Its like a bouncer.

A purchasing sort of...

What does a bouncer do?

Lets people come near.

Yeah. So this might be somebody you meet at a conference that they

Right? So the doorman, they have no power over the decision.

So its like the antithesis of the gatekeeper.

The person whos trying to keep you out.

Theyre the person who lets you in.

Oh, okay. [Laughs]

So what is a product champion? Anybody have a product champion in a

Tell-tell me about that.

Within the same company that youre working in?

Perfect. Thats a product champion. So a product champion is somebody

Theyre usually somebody who just wants to install change in their

As well. [00:32:00] Somebody who could be really senior thats in a sort

Somebody who likes to use your product.

Yes, somebody who actually would be using your product on a day-to-day

[Unintelligible - 00:32:51] CTO, it could be a VP of engineering. Um,

Like you have your...

When I talk about experimenting, a place to experiment is prospecting. So

client experience is a different message than the C- the CEO of the

They-they... they tend to be very, super conservative. Right? Right?

You know, I dont know.

Yeah, and tha, and thats fine. Thats fine.

[Unintelligible - 00:38:50] how to understand very well your relation and

Interesting. Say that again. Turn around and tell him.

And so-so leverage the champion to overcome it.

[00:40:00] But theres also [unintelligible - 00:40:00] of that question