Value Selling for Tech Startups with Edward Golod and Colin Kleine
Where we discuss the challenges and remedies for tech startups that need to sell Top-Down to the C-Suite for larger deals but struggle with how to implement this. Value selling is conceivably the single best differentiator and driver to grow a startup at the lowest cost denominator.
Hey, Colin you know, today is all about a really good topic from you value selling How you been man? I’ve been good adding value and selling.
I pray.
Father said, my mother and mother would say you’re such a salesman? thought that’s what we do. So today is a conversation that’s very endemic to me. Which is instant value selling? Is it possible to learn how to sell to a CEO? Like overnight? or selling value is just so complicated? We all talk about it, but very few of us can do it. Well. Sure. So I guess and let me push back and ask you this question. What when you think value selling? What does value selling mean to you? Wow, that’s a really great question. That’s like, the greatest question for the simplest answer. Value is something
that is derived after the exchange of business or a transaction. It’s post. It’s not pre, its post, oh, I have a company, I need a machine. I need to change my conveyor system. Do I get value? Sure. After I buy it, after I pay for it, after I put it in, after I make more product, I then sit back on my controller and say, Wow, we got 12% more output. Now on the product line. Let’s look at how much value we get. Every sales person I meet thinks values on the front end. Now you got to deliver something first. Sure. So let me ask you this question. As someone who’s a practitioner of Tony Robbins, and Brian Tracy, and various sales methodology, the classics, they are class? Well, you are right. They talk about add as much value as you can upfront. And I often see sales people do this as well, when you add as much value as you possibly can to the customer, let’s say in the world of SAS sales, the rest of the process takes care of itself, you will lead them to the close. What do you think about that?
Well,
if that was easy, everybody be doing it. Adding value on the front end is brutally difficult, brutally difficult.
Everybody knows that. Everybody knows that knows us, you and I, we sell to the top and the bottom, but we live at the top we live with the money is in the strategy. And at the top of smart people. And their fiduciary is their financial, they run companies. So if you want to add value in the front, you have to know okay, I know your business, I can read your 10k and 10 Q, I get that I have to know how you make money, I have to know how you’re losing money, I have to know how you’re strategically using money. It’s complicated, you need a financial background. And that’s difficult. So to add value at the front, you really have to be able to talk to somebody and laid down. This is where I see a gap. I’ve been thinking about it. And this is where that gap could be closed. And it’s not about your SaaS product. It’s about the turn in revenue, or cost reduction to help them. And it’s hard to do. But once you do it, it’s the Holy Grail.
So what do you think that the industry has shifted? And I’m specifically referring to something which I’ve said in previous speakers, the medic sales methodology, which is now very much seen as the gold standard for a technology company should use? Where do you think that the industry has shifted over the last five years, particularly with regard to methodologies, particularly with regards to what you’re citing that it’s when you’re adding value on the back end? What are your thoughts on that?
I think value has become the prostitute of SAS. I think value is nothing but a prostitute. A cheap prostitute. Because value is.
And I’ve said this before value is where it all ends up. Everybody that’s selling tech, irrespective of where you are, and how much your product sells for, and how you built it.
They want to sell it and the people that are buying it all work for the same person. The top of a company, the CEO, the president, where the budgets come from every company has public goes to shareholders can they want value my stocks at $1? I want to every private company. When people buy technology, the CEO says we need more margin. We need more profit, we have to increase payroll. The entire ecosystem of the planet Earth is based on corporate profit. Well, if everybody’s on corporate profit, then why do people trash it around though I so value, our software delivers value, our software can improve your productivity. What kind of bullshit is that?
When you can’t say, well, I’ll solve for delivers 4% more modular contribution by stripping out part of your overhead from Yes. GNA. Why is that so difficult, and they trash it, you know, I get very emotional about this. Because when we talk to CEOs, you got to be on your game, and we are on our game when we do it. And you know that because you’re there with me. I am, and there’s quite a, there’s quite a few things to unpack there. I’ll give you some interesting examples, actually, in between 2018 to 2020, there were 500 tech companies in the US that raised an excess of $20 million. Now, from 2020, to now, something which completely spun me out, is in the midst of a pandemic, there were 1500 companies that raised in excess of $20 million. So if you just think about these numbers, that’s a 3x increase in the amount of startups being launched just in the United States. Now, everybody claims to be a value based seller, everybody claims to be a solution seller. But then how does a company which is a startup in such a hyper competitive field? Because it’s not like the was a tripling within their prospects? The prospects only marginally increase? How does a startup in such a hyper competitive field add instant value for C suite D leverage?
Wow, they can’t, they can’t. And they want to. So the way that you have to do it is one, they have to take the ROI, throw them out of out the window, and designate somebody in the company in finance, to build the value narrative. And every startup has a CFO, and that CFO should own up and bone up to say to the salespeople, let’s put together a couple of page document that our product sold into this type of sector could be retail logistics, aerospace, it could be food pharma, when it’s sold to those sectors, our software eliminates cost in this area, could be FTE could be time to production could be time for development, or our software delivers revenue, because it increases customer acquisition, or increases customer success. Or a decreases attrition. So let’s figure out how much does it do. And when we figure that out, we just have to overlay that to the size of the company and create a ratio. It’s not hard, but nobody wants to knock on the CFOs door and say, hey, help me do this. So to create instant value on the front end, you’ve seen me do this in Melbourne and Sydney, we create a value narrative overnight, we can do this. The problem is a lot of the salespeople are uncomfortable with it. But you can do that why companies don’t do this. It blows my mind. I’ve seen you in board meetings where companies are raising 10 $15 million.
And nobody stands up and says, Hey, by the way, we got to take 50 grand, and you know, or 100 grand and become a real high end value based company. And then I’ll do that. But yet when the sales aren’t making it for the quarter, you know, nobody’s happy about that. It’s a real it’s a real discrepancy, I think and how people run their businesses and how they raise money. So let me challenge you and let me hear your thoughts on something. I used to be an accountant myself. So yes, I do come from somewhat of a bias perspective when it comes to speaking to a CFO now. But what if you’re buying personas, the people that you’re targeting? Yes, I understand that if you’re a company that sells to financial stakeholders speaking to a CFO, you’re talking in their language. But what if you’re a company that sells to the officer, the CMO or the CTO or the CH Aro, you need to be able to speak in a person’s language. So let me ask you this. If you’re dealing with very, very different buying personas, how then does a company add instant value for C suite D leverage? What would you do? I want to know what Stephanie gave you for breakfast this morning, because you’re really smart. It had to be something. It had to be one of those like blender juice, asparagus, OJ, I don’t think that’s up. But you’re really you’re really on your on the point today. So the secret to selling instant value is the use case. Secret, not a case study. Case study is we sold our product to a company and they put it in place, and it eliminated some people or headcount or operations. And they did well a use case is doing that in an industry or in a wide or broadband application. For example, if you’re selling to a CMO and you’re saying
Marketing, automation, marketing analytics, customer success into marketing, etc, etc AI into demand gen lead scoring.
All you got to do is sit down with your CFO and figure out
does it actually do that? It’s a table? How much does it reduce in people? Let’s count the hours that we reduce? How much does it increase customer acquisition? And lower the cost of that? Well, how many campaigns is the customer, though? How long does it take to do the campaign? How large is their audience? This is basic finance. So if you’re selling to a CMO, you can do that. The use case for a CMO and retail would be an excellent example of your software. Now, if you’re selling to a seaso,
or a chro, it’s the same thing. How much security breach abatement do we do? How much cost do we take out and hiring people? It’s not hard. Unfortunately, people that have this are very lucky, because they work in big companies. You know, you know, Nico, Mike Nicoleta, who I love, the man helped me build the whole value foundation in the business. Mike built the Value Management Office at HP, IBM. And Mike is one of these guys, who’s very brilliant, but yet HP, and IBM had big money. So they’re able to spend millions building a Value Management Office, they have it in Salesforce. Well, if you work there, and you’re doing a $5 billion deal, you have access to the VMO. But if you’re working in a startup, and there’s 80 people, you don’t have a Value Management Office, you don’t have to value office, you don’t have to value expert. So you have to sit with your CFO and say help me to do this. I think it’s criminal, how companies in startups hire Big Shot, heads of sales, big shots has sales, and I’ve heard very rare, where they came in and said, Okay, you’re going to pay me X, I’ll hire y, I’ll deliver Zed in revenue. And by the way, I want $25,000 or $40,000, to get a value operation set up. I can’t believe people fund companies and they don’t have that in the contract.
I can’t believe it either. And below your level, you’re saying before it’s speak to people in their language, say hey, char RO, what does this person need CFO? What does this person need CMO? What does this person need? Talk to them? In what value means to them? Like what is it that will specifically positively impact their job? And that’s how you do it.
Yeah, and it’s it’s so important, because
if you’re selling on the street, and you know that there are startups popping in everywhere, they come in from the Ukraine, they come in from Bangalore, they’re coming in from Taiwan, they’re coming in from Sydney, they’re popping up. I mean, I was had dinner a while ago, before COVID was out of control. And this big finance fellow that I know was telling me, he said, you know, Ed, you like Bitcoin? I say, Yeah, I mean, I’m into a theory, but I love Bitcoin. He said pretty soon people will be buying and selling startups like Bitcoin, it’d be training them. Well, I believe that’s going to happen. And it’s almost happening now at 2022. The startups that no you got to sell to the top sell to the executive, understand value is endemic in their language, have a distinct advantage. And I know that I’m right, because you’ve seen me yell at all the time to people about this. I have CEOs that I talk to try to sell maybe I’m selling them, and they’re on LinkedIn. And they’re asking these questions and then putting up personal stuff. And they got you know, these surveys about if you had a million dollars, what would you do? And that’s such bullshit. They should be on LinkedIn saying, if you’re selling to the head of Lloyds of London, how do you present your value in two minutes? That’s what I want people to learn about. And they don’t do that, because they can’t figure it out. But they’re making money so they get away with it.
Hey, yes, this is exactly this is straight talk, and it’s in your face. But we’ve been banging on doors long enough to know you know, we all need some help and what we’re doing so Collin once again.
Natalie, thank you for your help today.
Send me all of a sudden that green blue juicy drinkin so I can be smart to looking forward to alkalizing it no problems at all. I’m ready. Thank you so much. Thank you, man.