Ken Morse is a serial entrepreneur, having founded six tech companies with MIT friends and classmates. Five had successful Initial Public Offerings or mergers [3Com, AspenTech] and one was a complete disaster.
This interview is conducted by Katja Samara, a huge Technoport fan, experienced sales professional, CEO and founder of Insight Sales: a company helping businesses with their revenue growth.
KATJA: Ken - we are looking forward to seeing you back in Trondheim. Technoport is your host, and has become a great arena for learning and networking in recent years. This year we will dedicate a whole day to sales - your favorite topic - in order to help entrepreneurs to #CrackTheCode of customer acquisition and revenue generation, and therefore equip them for success in the face of the global competition.You and I have worked together for more than 3 years, dedicated to building the most positive views among Norwegians about sales.
Why is prioritizing sales so important for all companies, and particularly for younger, ambitious firms?
KEN: The single most important reason that a company exists is to serve its customers. Without customers, a company will fail, or has failed. It all starts with solving a valuable problem, and getting paid to do so.
KATJA: Many entrepreneurs, including Norwegian ones, tend to wait to talk to customers until they are ultimately sure that their product works. When do you recommend that they should start engaging with potential clients?
KEN: Personally, I recommend engaging with, and deeply understanding, the Voice of the Customer (VOC) before starting any firm. The business plan, and the product roadmap, should be driven by customer needs, and have actual quotes from customer interviews, along the lines of, “If you can build this, we would issue a Purchase Order to buy it.”
It takes that kind of brutal reality from expressed customer needs to enable any company to get traction. So, I am saying that the right time to talk to customers is both Day Minus One, and Day Zero, and every day thereafter.
Another way to look at it: it is better to wait to start writing code, or equivalent, until you have entered into a significant dialogue with at least 2-3 beachhead customers.
KATJA: I remember one of your expressions, “China Syndrome”, when a company’s sales and marketing plan looks like a simple shopping list of geographic territories. It clearly defines their dreams of which geographical areas or verticals that company hopes to win over, but lacks credible words about how to get the job done. How can a company avoid this highly dangerous syndrome?
KEN: One way to ensure reality in market plans is to know the customers’ needs intimately. If you are a team of young founders, with limited business experience, get some real world advisors, with grey hair (or no hair).
In addition, it is advisable to write down the words from the mouths of the customers; without VOC, the plan will be an exercise in futility.
Finally, in the early days of most ventures, it will probably be impossible to recruit experienced, passionate top-notch sales talent until the first beachhead customers make a serious financial commitment. Therefore, face the fact that the face you see in the mirror each morning is the face of your sales organization. You simple must learn to sell, from the beginning.
KATJA: Talking about the sales and marketing strategy, let’s get real, tactical, and practical: Where and how do we start? What do we say to whom? How many e-mails and phone calls should I make before I annoy the prospect? If young, first time entrepreneur-CEOs do not already have a network of adults with access to decision makers, nor any practical sales experience, where should they start?
KEN: For businesses to have a chance, they need to have good answers to these questions:
Then, they must have a way to get into the hearts and minds of the first few beach head customers, which probably means stalking the decision maker and pitching to her/him face-to-face at a conference or trade show just before they give their speech, or at a reception. This is hard work, and most pitches must be around 55 seconds, which means VERY well prepared questions, well-rehearsed. Phone calls rarely get through, and e-mails never convince anyone who doesn’t already know you, and have common ground.
KATJA: Can startups outsource sales?
KEN: Katja, I know that you know this is a ridiculous question; “NFW = No Way.”
KATJA: Just needed a confirmation for our readers.
KATJA: In a start-up team with 5-6 people, how many should be dedicated to sales?
KEN: Everyone's in sales, from CEO to receptionist. Young companies are always selling:
The CEO is the Chief Sales Officer; if your CEO can’t sell, your company will fail.
KATJA: How to bridge the generation gap between potential customers and possibly much younger entrepreneurs?
KEN: First of all, I am not encouraging the best and brightest grad students to start a company right after they finish school; that is a bad idea. It is much better to avoid “premature incorporation” by getting a good, customer-facing job with a well-managed, demanding company. Generally, in universities, we teach students how to think, not necessarily how to do stuff/GSD. Knowing customer pains, being well-respected by potential customers, and having a team of experienced entrepreneurs is a better formula, with a higher chance of success, I would say.
KATJA: You serve as an advisor on Innovation to several major multinationals and governments. How do you motivate big companies to buy from start-ups?
KEN: Today, I don’t have much trouble explaining to large firms that not all the smart people in the world work for them. Therefore, undoubtedly there will be valuable opportunities to bring in appropriate novel products and technologies from outside rather than try to re-design and re-invent the wheel.
The big challenge is finding the right impedance match between elephants and gazelles.
KATJA: What is an ideal first customer that would validate a start-up’s concept? How can an entrepreneur convince him/her to give their new idea a chance?
KEN: A few companies are visionaries, with a “challenger” mentality and culture. They are more likely to be open minded to novel solutions which can help them get an edge / gain advantage. Seek challengers, and, well . . . keep the ABBA Gold song handy, “Take a Chance on Me.”
KATJA: What advice would you have for young Scandinavian companies which are working hard to build a great company and wish to take things to the next level (e.g. raise additional outside capital, attract more international customers, etc.)?
KEN: Don’t even think about trying to raise money until you have delighted, enthusiastic customers.
KATJA: So, all entrepreneurs should have in mind that they have to land major leading accounts in the country first, before they seek capital. Everybody who have any sales experience knows that it is not an easy task. That is the reason we chose to concentrate on sales during this Technoport conference.
KATJA: Any last words ?
KEN: You are lucky to be in Trondheim. It is a relatively fantastic ecosystem:
I work with entrepreneurs in Pakistan, Lebanon and Spain. They never complain, even though they face enormous challenges. If you have any sense of entitlement, or like to complain, please don’t come to the workshop.
KATJA: Thank you Ken for sharing your words of wisdom with us. Looking forward to experience your workshop on the 2nd day of Technoport 2016.
Ken was also the Founding Managing Director of the MIT Entrepreneurship Center (1996-2009) and a passionate innovator of technology-based products and new business models. Today, Ken works globally with ambitious entrepreneurs to help them succeed on the global stage by sharing his knowledge and experience building businesses.
March 3, 2016 Technoport invites all the ambitious entrepreneurs to A High Value Sales Strategy Day in Trondheim. Designed for Entrepreneurs, CEOs and senior sales executives from innovative, fast-growing technology-based companies, featuring case studies and lectures, interactive discussions, participants presentations, “hands-on” exercises, and the opportunity to practice "elevator sales pitches" to potential customers. Registration will be closed when the event reaches 75 registrants.
For general information and questions you can contact Katja Samara at firstname.lastname@example.org, telnr 40035171, or email@example.com telnr +47 924 09 439
If you have already registered for Technoport, send us an e-mail and we will register you for High Value Sales Strategy Events.
Photo: Denish C