The Entrepreneurial Chicken-or-Egg Dilemma
It's hard to sell a product before it exists. It's also hard to perfect an offering without steady cash flow. So where exactly is an entrepreneur to begin? We've polled leading entrepreneurs on the art of the first sale, and here's what we learned on how, when, and where to focus efforts.
Sell earlier than you think you should.
Eric Ries sums it up in his lean startup strategy by recommending entrepreneurs to get in front of prospects on day one. Hit up prospects at every opportunity, and gauge their reaction to your concept long before a prototype exists. Assemble a wait list, build excitement, and don't waste time creating until you know that it will sell. Research also indicates that it's easier to get people to commit to an idea when they are involved in its creation, so pull your most desirable prospects into the concept development phase and establish relationships that will be needed to sustain your business later on.
Shut up and listen.
It's hard to open up to criticism, particularly in the early stages of a startup when passion is at its peak. Hearts and souls are poured into product development and refinement, but every market has its pain points and this is some of the most valuable information an entrepreneur can extract from a prospect. The better you understand the problem, the more likely you are to nail the solution.
Know (and own) your value.
It's tempting to sell at any price as entrepreneurs scramble in the early days to establish a following, but resist the urge and hold true to your sustainable price. Be bold in your ask, and comfortable in the dollar value you've aligned with your product. If you don't believe in it, neither will your prospects. It's also common for prospects to work you down on price when they know your company is young and eager for business, so be prepared to justify your pricing and validate your offering.
Sell to the biggest players first.
Founders often tackle the low-hanging fruit first, failing to recognize that one big name can bring in hundreds, if not thousands, of sales to follow. Focus efforts on strategic buyers, who are likely also the people who will enable your business to sustain operations over the long haul. Set a goal of one big, smart win, and use that as the bait to attract the others.
Being a first buyer is scary, because there is no proven track record to reference. In the absence of a product to show, ease the fear of buyers' remorse by selling your team. They are the people who are ultimately accountable to customers, and if you can highlight their accomplishments alongside a winning concept, you just might build confidence in the hearts of skeptics. If your team is green, bring in advisors or board members with stellar reputations to vouch for your business.
They're wrong. Size doesn't matter.
Entrepreneurs often go to great lengths to mask the fact that they're working alone or alongside small teams. Being small can be an asset, so highlight to your prospects that, as the CEO, you are far more committed to customer satisfaction than a sales rep at a larger competitor, and also better able to customize an offering based on the unique needs of your audience.
Regardless of team size, it's ultimately the job of the founder to drive initial sales. As the concept creator and visionary leader, the founder is the ideal candidate to sell a vision while the product is being developed, and to prove to both the market and the internal team that the concept is a viable solution that supports long-term growth.