Founders Need to Be Ruthless When Chasing Deals

https://steveblank.com/2024/04/16/founders-need-to-be-ruthless-when-chasing-deals/

by tie-in • 3 months ago

65 31 3 months ago

steveblank.com

tonyedgecombe• 3 months ago

We’re excited. When can you come back and show us a prototype?”

When you've put your hand in your pocket.

bertil• 3 months ago

What do you mean by that? Promise some investment? Commit to something?

csallen• 3 months ago

Reached for money, I take it.

lelanthran4• 3 months ago

What do you mean by that? Promise some investment? Commit to something?

Commitment, in any form. Best is a signature on a purchase order.

The Mom Test is a good explanation of why you don't have PMF with the client until you receive a purchase order.

In short, people don't want to tell you things that hurt your feelings, especially if you're a good sales person (good sales people are likeable, you aren't closing if the client doesn't like you).

So you're sitting their with the clients team, and they like you, you made a good impression. No one wants to tell you "Look, it's not what we want, it's best you be on your way". What they'll do instead is:

1. Try to soften the blow with "We like it but we have to get sign-off from $VP first" (blame it on the non-present Big Bad Wolf); you tell them "Can we pull them in now? How about tomorrow?"

2. "Don't have the budget but we'll put it in the upcoming budget in a few months" (Hoping you won't know on their door again in 4 months); You tell them fine, we can sign now for deployment in a few months, before the rates increase you will have in a few months, and you'll throw in a discount as well.

3. "Can it do $X, $Y and $X" (Hoping you'll say "No" and then bugger off); you tell them they can make $X, $Y and $Z part of the signed purchase order.

4. "We have a lot of projects going on now, don't have capacity to manage this" (Hoping, again, you'll bugger off and forget to come back); this is one you don't respond to, you just back off because they don't need your product that badly.

If a business wants what you are selling, you will have a signed purchase order the next day. If you don't get that signed PO, you follow up over the course of maybe a month. After that you spend your limited sales resources on someone else.

Once, I spoke telephonically with an (existing) client in the morning on an upsell, and had their signed purchase order about two hours later. Fair enough, this was an existing client, but the upsell was for a completely new product.

My rule of thumb is "demo once, and record the demo". If higher ups need to see a demo before they okay, they can see the video. If the demo was not to the correct group, the correct group can see the demo (and they'll request another demo if they want one, the existing group won't ask for another demo without new participants).

Look, sales means you do more work than the client, but they still have some work to do, and if they don't do it then they're not committed.

ilamont• 3 months ago

Commit to something?

Yes, with an actual payment (processed credit card transaction), a signed contract with clear payment terms, or a convincing promise to pay such as a written instruction to send an invoice.

A lot of startups have made the mistake of thinking "customers" are the same as "downloads of a free app" or "people who created an online account" or "people who signed up to be notified of the actual launch."

Accelerators once encouraged this ("you have to show progress to investors on demo day!") but unless you have actual paying customers it's not a real business.

lelanthran4• 3 months ago

> We’re excited. When can you come back and show us a prototype?”
When you've put your hand in your pocket.

I thought the same thing. From my reading of "The Mom Test", my sales strategy changed to incorporate the lies that a business would tell you to avoid hurting your feelings.

Basically, if you cannot give me a purchase order after seeing the software, you don't want it!

I do like the idea of a cancellable purchase order that they sign: organisations need an earthquake to move them sometimes. Once that thing is approved and signed by the powers that be, absolutely no one in that org is going to bother cancelling it and going with a competitor.

dzonga• 3 months ago

One book I can recommend is "Gap Selling"

before I read that book and tried to sell some stuff I realized in org's there' more than 1 buyer.

in a typical b2b / gvt deal - you've 4 buyers at least.

lbriner• 3 months ago

This is such good advice.

I think new founders are sometimes intimidated by customers, especially well-known brands, we don't want to upset or annoy them instead of being open about not being able to afford to run loads of pre-sales technical work. We also see the dollar signs for one large customer when we should be seeing smaller dollar signs for many customers.

For the customers, to be fair, they are partly trying to derisk the purchasing decision by making sure everyone and their dog has seen the demo, shown that it definitely does exactly what they want with their data and processes etc. and they have no skin in the game at this point, so why not?

Believe in the product you have built already and as the OP says, be certain of product market fit and ABC (always be closing).

piker• 3 months ago

This is great advice (that we need to follow) but needs to be updated for 2026. The information value of providing (or receiving) a demo has dropped to roughly zero with vibe coding. Today, an apparently functional and useful product can be produced and demoed in minutes, but that demo provides absolutely zero information into the technical capabilities of the demoing team to follow through on promises with polish and at scale. It doesn't reflect a studied architecture or edge case handling. It basically only shows a vision, which can be tailored to perfectly mirror the recipient's expressed desire even though it's absolute vaporware. This makes it even harder to sell to enterprise in 2026 when the scene is awash in such noise.

operatingthetan• 3 months ago

that demo provides absolutely zero information into the technical capabilities of the demoing team to follow through on promises with polish and at scale.

With vibe coding comes vibes-based capital. I'm only half kidding.

QuantumGood• 3 months ago

Speed to market has always been a factor. Venture prioritizing this factor due to AI accelarating speed is probably expanding ... for now. In bubbles, speed tends to rise to a higher priority.

Yes, first/fast is sometimes a negative factor (e.g. first to market doesn't mean best, second to market can take advantage of proof of market proviced by first, etc.)

cmrdporcupine2• 3 months ago

Right, and the story now shifts to: What's your customer service & support model? How can you prove this is stable and that you can maintain it? Who is going to handle the pages in the middle of the night?

mlnj• 3 months ago

All those things are beyond the demo itself. Vibe-coded demos are just demos. There are stability, security and everything enterprise that still needs to be added to a demo to actually make it functional as a paid offering.

The hard problems still remain.

keiferski• 3 months ago

In my experience demos are half about the product and half about the team / company behind it. So I wouldn’t call its value zero: part of the reason a potential client is asking for a demo is to see if there’s actually a real, intelligent company behind the product.

oliver236• 3 months ago

AI demos are 5% of the product

bonesss• 3 months ago

The sales pitch needs to compete with other pitches, so I gotta imagine in a vibe-heavy market a solid sales team is gonna lead with all the stuff you can’t vibe.

Customer transaction numbers, service response times, human staffing for VIP customer service, and human engineers who are recognized domain experts. The cliche live call to customer support with some hairy-ass customer specific problem.

Plus vibe-upselling of vibe-integrations for whatever Wonderful Engineering the customer has with your profit centres.

user_7832• 3 months ago

The information value of providing (or receiving) a demo has dropped to roughly zero with vibe coding.

Only if you're a software-only startup. If you have hardware, the entire article is still valid.

bjornroberg• 3 months ago

The artifact can be faked cheaply now, so the only buying signal left is commitment. That's exactly the "ruthless" move the post argues for, I think.

eiiejr• 3 months ago

Vision and strategy are more important than ever.

And frankly visually being able to explain how your product beats the competition is more important than writing lines of code for a product that could be DOA.

However not everyone can do this. So the scientific approach gets pushed.

neya• 3 months ago

As an aside, I love the website design. Very early 2000s vibe without costing readability (on desktop).

lelanthran4• 3 months ago

As an aside, I love the website design. Very early 2000s vibe without costing readability (on desktop).

I read it on mobile and, while not optimised for it, it was very easy to zoom into the middle column to read.

I wish more blogs did this: simply setting your content to 38em and doing nothing else makes the content readable on mobile.

firemelt• 3 months ago

I wish hackernews submissions is more like this

PandaRider• 3 months ago

What would you mean "more like this"?

The headline is borderline clickbaity. Specifically the word "Ruthless" made me think of something unethical like Delve's business.

[1] https://news.ycombinator.com/item?id=47634690

lelanthran4• 3 months ago

What would you mean "more like this"?

He means things that actually matter to entrepreneurs. All we've been seeing lately are hype-chasing AI submissions.

kriro• 3 months ago

The described enterprise sales process sounds a bit odd to me. I come from the perspective of existing codebase that is tailored to the specific customer processes/org structure etc. so maybe it's different for a completely blue ocean type of product.

It's usually initial contact + demo or feature talk of sorts. The next step is some small project with customer specific data which is billed. They get a quote and either do it or don't. Scale up, SLA etc. follow after that (basic outline of what's possible is usually given in the initial contact). Alternatively this small project can be some consulting package but it's always billed.

Onavo• 3 months ago

The type of sales at your company is the top down approach where you already have a solution. There's a lot of enterprise sales where the solution doesn't fully exist or requires extensive customization that it's the blue ocean demo that sells the product, the product doesn't exist until the deal is signed.

osullivj• 3 months ago

Yep, "enterprise" sales will kill ya. And when you do "close" you then get beaten up by "vendor mgmt". And when you finally get the invoice in, it's the finance dept and 90 day terms.

mitchbob• 3 months ago

(2024)

Founders Need to Be Ruthless When Chasing Deals

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