The Danger of the Sales and Product Mismatch
“Russell, here is what you can confidently sell today. Here is our capacity. We are working to increase that capacity quickly. I also need you to acquire more learning, so we can answer some important questions on what to build next. Get out there in the market and have the confidence that we will deliver the service. You don’t need to know anything more at this point.”
This may be the most magical comment I have ever heard from one of my business partners, Eric Page, who is leading our effort at Stride to build an incredible service for back office bookkeeping and accounting services. Why? Because he released me without excuses to get out in the market and sell our service. I have confidence that my promises will match execution. For someone that is on the front lines in a sales capacity, that is MAGIC! But it’s not always magic and I have lived the other side many times.
When people responsible for sales either know too much about the “warts” of the business or lack confidence that someone is working hard to address them, the dye is cast. When there is doubt, it leaves open the door for excuses and fear. Excuses and fear are probably the two worst ingredients for sales. But wait a minute! Why does this even happen in the first place? Let’s get to the root cause here to understand where this organizational breakdown originates.
The disconnect between sales and product/service delivery happens for a number of reasons:
Sales is “selling” in advance of product market fit. The organization feels pressure to generate revenue before they have validated the problem they are solving. The sales team gets ramped up, commission structures are put in place and the stallions are unleashed…too early.
Product team are order takers. Instead of being the CEO of their product, product leaders take input from what they hear from sales without their own customer development. There is an information vacuum and they can’t engage in data driven dialogue.
The CEO is freaking out. With investors breathing down your neck and a cash fuse clock that is ticking, CEO’s can sometimes jump the stage of market validation and start ramping sales, any sales, prematurely. And CEO’s are usually able to sell which they will, and it will be self-sabotage.
The Company lacks learning as a core principle. If the Company does not embrace learning as a core business ideology that infiltrates everything they do, then the right feedback loops won’t be built to inform better decision making. People will just continue plowing forward without the benefit of assessing their experiments.
What we really have here is a fundamental timing difference imbalance. There is an urgency to “sell” before a product is delivering a value proposition. That creates an imbalance inside of the organization where there is pressure on sales to move product but the product people aren’t even sure what needs to be built. Then what happens is that the salespeople get super frustrated that the product isn’t ready and the product people get super frustrated that sales is selling things that aren’t even on the roadmap. And the system stalls out. Sound familiar?
So how do you solve this as a company leader in order to keep the understandable desire to grow revenue in alignment with the ability to build a product or service that the market wants and will scale?
Consider these strategies:
Don’t SELL. LEARN. For new products or services that aren’t already well understood and established in the marketplace, the job of sales is to learn and document that learning. What is the profile of the company I am talking to? What is the job they are trying to get done? What keeps them from doing it? What does the world look like when they are successful? What are the features I could deliver to help them succeed? What is that worth? Are there more customers like this? Do not put sales commissions in place at this stage. Disaster!
Get an early commitment from a small group of the right customers. Learning should lead to a relationship where a small group of the right customers are interested and invested in what you are building. You have hit on a clear pain that you really want to validate, and they want you to validate. This is the chance for the product team to step up to the challenge and deliver, to align with the market need and set the stage for repeatable sales.
Test the message frequently with or without product to sell. It is much easier today to gauge the market reaction of prospective customers for your value proposition. Whether you use a service like Hello Outreach or paid ads or Facebook, you can start to get some learning on how your message resonates well before you have built product.
Keep your cash burn as low as possible until you have found product market fit. There is an urgency that entrepreneurs feel to put money to work after they raise venture capital. It is probably because what was represented to the investor didn’t match where the company was truly at in terms of product market fit. But don’t get sucked into it. Outsource as much non-core functions as possible and keep your team as small, tight and coordinated as you can until you start feeling the “pull” of the market.
Build an intimate link between sales and product. The culture of the organization typically frays in this area fastest if there is not a tacit shared agreement around how these two functions align. It is important to put structured meetings in places where product can share progress with sales and sales can share learning with product. Yes, these meetings can be spirited but when you walk out of the room, you have shared commitment.
The challenges that companies face in driving sales and the frustration of those responsible for delivering on those sales promises is typically due to a timing and communication problem. Do you have that imbalance in your organization today? Meet with your teams and course correct if you are spiraling and need to re-align. The alternative of companies trying to scale their service before they have validated that they have nailed the customer problem is a well-worn path I’d prefer you not go down.