Have you got a sales quota?

The thing that truly separates a corporate job from a job at the startup is the chance to have an outsized impact on solving a problem for customers. More often than not the distance between problem, potential solution and the ability to get that solution in front of customers to test out is way short for a startup than for a corporate.

But there is also another thing that separates the two. And it’s one which is directly linked to the above discussion about impact. It is the opportunity to see outsized returns on the investment of time and ressources you put into succeeding.

Having an incentive programme at a startup is pretty normal. It’s a part of the overall compensation and incentive plan in the company, which helps to ensure that the right talent can be attracted and that people stay motivated outside what their immediate role requires of them. But being part of an incentive programme is perhaps not enough. Perhaps we need to take it one step further.

How about we talk about assigning measurable sales targets or quotas outside of the sales team? What would happen if we started putting the same kind of targets on fx product peoples backs as we do with sales? Would that make a difference for the product, it’s ability to delight customers and – following on from that – generate sales? Perhaps it would.

It has always seemed quite odd to me that a lot of startups despite having a shared stated vision and mission seldom follow it up by assigning specific market facing targets but instead confine these to sales. I know that all departments have their own set of internal KPIs they’re working hard to achieve, but since you could easily argue that startup success is impossible without market facing goals, it makes little sense that they are not evenly distributed across the organisation.

Of course sales should always be accountable for turning leads into deals and revenue that can be booked. But sinde the core foundation of sales is the availability of an attractive product that delivers value above and beyond what customers pay for it, it makes perfect sense to assign the same kind of quotas to both product and R&D. After all, we all have a shared interest in becoming a success in the market place.

Naturally, the first couple of arguments against this line of thought is that people outside sales are not exactly motivated by doing sales (hence the reason they chose a different line of work) and they don’t always feel empowered to influence how and under which terms the product is being sold to customers. I have full sympathy for these arguments, but I think there are ways to work around it.

First of all, it should be ensured that whatever sales quota is being assigned outside sales is directly related to the overall vision and mission of the startup. It should not only be about assigning a dollar amount or a number of installs. It should be set up in a way that it encompasses the storytelling about what it is, you’re trying to achieve – big picture style. That way a quota essentially becomes a recurring reminder of what you’re doing, who you’re doing it for, and how you’re progressing towards achieving your ambition.

Second, it should also be ensured that there are boundaries for how sales sell the product. Especially if it’s done through reps. No opportunity for promising customers anything other than what’s already in the product. No opportunity to put extra workload on the teams back at the office for coming up with new features or a new take on a feature just to satisfy an painful customer. Sales has to show some respect here for the team members who have agreed to take on some objectives which don’t come natural to them.

After all it is a team effort, where everybody help each other out, and where there is total transparency about how things are going, and how successful we all are. Wasn’t that what was agreed in the first place, when the startup was founded and the first team members started to join? That you’re in this together in other to succeed with a higher purpose?

Of course it was. Or should be, at least. And viewed from that lens it isn’t awkward to put sales quotas on people outside the sales team. Quite the contrary; it makes total sense in order to ensure the alignment against vision and mission of everybody on the team.

(Photo by Norbert Braun on Unsplash)

The deceitful stories

The jury came back on Elizabeth Holmes of Theranos infamy yesterday in the landmark case against her; guilty on four fraud accounts. What that will translate to in terms of sentencing remains to be seen, and it’s more than likely that Holmes will appeal.

Nevertheless: Guilty.

The really great question now is whether the Theranos case and Elizabeth Holmes was a lonely swallow or if something more like a structural problem is afoot?

While there can be little doubt that the Theranos case based on its scale and tactics used is a land mark one, I would argue that some of the fundamentals that drove Holmes to where she landed herself and the company, is in play in many more places that you would probably think.

I.e. we have a structural problem on our hands. And one that is probably enforced by the speed of development and the somewhat easy access to cheap capital.

So what do I mean by that?

Two things.

The first issue is the outsized influence of storytelling on valuations of startups and even bigger corporations. As an (semi) old communications professional I should probably take great comfort in the role a great story plays for the valuation of a company:

You really can fake it until you make it by using the right words. And boost your valuation and overall attractiveness to customers and investors in the process.

Brilliant.

Case in point?

Tesla.

Elon Musk is not in the business of manufacturing electric vehicles. He and Tesla is in the business of fighting climate change.

Notice the difference? It’s staggering. Not only to the total addressable market. But also to the valuation.

And due to the storytelling and investors believing in the story (and the founder myth associated with that particular founder and company) the valuation of the company when compared to the business fundamentals is about as far off the ground as the distance from Earth to Mars.

Tesla is perhaps just the biggest and most valuable example of using storytelling and words to grow your valuation, but most of the startups, I meet do it.

The stellar ones connect the story brilliantly to the problem they are trying to solve with the product, they’re building.

Most of them don’t have the product yet and are in the ‘believe me and take my words for it!’ category which is seldom that compelling.

The worst ones make so little sense, it’s painful to listen to and really just helps to enforce the point that inflated storytelling is something we need to be mindful of and skeptical about as investors (and customers for that matter).

It turns out, you really can have too much of a good thing.

The second – and potentially more serious – issue is a consequence and side effect of the first one:

The fabled customized KPIs.

Customized KPIs are typically what happens when a startup feels a need to come up with a new measurement that (1) takes into account all the things, you want to showcase, while (2) trying at the same time to hide those things that will have people asking questions about how your business is really doing.

The classic example is WeWork, who came up with “community adjusted EBITDA” as a public metric in their prospectus. An ingenious invention that would basically allow the ambitious co-working space giant to report earnings as pure profit without accounting for much of the cost.

Obviously a deeply flawed approach. Which they – quite rightly – got flamed for.

Customized KPIs are toxic because they are an unholy mix of two potent weapons; storytelling and data. While each can and most often serve good in their own right, the combination can be lethal. Especially as it is usually only brought to light, when a startup has a clear interest in getting a story out while camouflaging it as data.

In that way customized KPIs essentially becomes the most deceitful of all; it takes the most positive spin on a story, it can find, and it makes it look like solid data.

While too much storytelling in itself may raise an eyebrow, customized KPIs should make every serious investor stop in their tracks, look hard and think again about what is really going on inside the startup in question.

Because why have the need for the masquerade?

Sadly – and this is the real point – that doesn’t happen as much as it should.

Instead the endless hype based on the great storytelling and the impressing numbers coming from customized KPIs run the risk of misleading investors to think that they really are on to ‘the next big thing’, and that they better close the deal, before someone else does it and the opportunity is missed.

There simply isn’t allotted the right amount of time and pause to step back, think, ask questions and get to the right conclusion.

And that – ultimately – is exactly why despite all the talk about Theranos and Elizabeth Holmes being a unique case that will never happen again, I am absolutely confident, we will do so again. And again.

The only questions are: What will it be next time? How much will it cost? And what will the fallout from it be?

(Photo by Diane Picchiottino on Unsplash)

Are you interesting?

There is a lot of talk about the effectiveness of content marketing for startups. And while I don’t doubt that it has some effect for some, I am firmly in the camp where I would advice anyone to up their game significantly, if they want to do content.

Because there is som much ‘blah’ put there that’s just not interesting at all.

Compare it to a party, where you meet someone you have never met before. You talk casually.

What’s the most interesting conversation?

The one where the guy across from you just babble on in banal terms without even making the slightest effort to understand whether you’re interested or even paying attention.

Or the one who actually engages in a conversation, brings new perspectives to something you care about or at the very least can relate to and leave you wiser and eager to know more?

Of course you would choose the latter one.

And that’s my point:

Content marketing is the first one. Thinly disguised as being ‘customer centric’ it is essentially about the sender and demonstrates a lack of understanding and/or real interest in who you are and what challenges you are facing. Basically, it doesn’t care.

The latter one is content where you from an angle of curiosity explore the field, you’re working in making sure that you bring fresh perspectives to your field and basically is worth the time and investment for others to follow and engage with.

That kind of content doesn’t need to be hard to produce. It just takes someone who knows what he or she is talking about and with a willingness to write about it from time to time and a openness towards getting it out there and potentially get some interesting feedback.

It’s an approach that doesn’t fit very well with outsourcing to an agency, because it takes knowledge, real insights and – crucially – the authenticity and presence that you can only bring to the table, when the one putting the content out there is deeply immersed into the field herself – day in, day out.

That’s what will make it interesting and worth following. And that is what could be a great and efficient building block for building and nurturing relationships.

If you can go that route, you have a number of potential advantages looking at you compared to your competitors, who stick with the old, ineffective content marketing playbook:

You can essentially become a real thought leader. You can get valuable feedback from customers and other constituents that can have an impact on your business. And ultimately you can drive new leads to the business that will both be worth significantly more over time from a commercial point of view but will also be way cheaper to connect with than other means of advertising.

Because all it takes is essentially your insights, willingness to share and openness towards connecting.

(Photo by Markus Spiske on Unsplash)

Insecurity is ok

Some people think that being super aggressive and speak in war-like metaphors is the way to go, when it comes to showing leadership in a start up.

I would suggest it shows more of a profound insecurity that you’re trying to hide by bluster.

Trying to hide things is borderline poisonous no matter how or why you do it.

Therefore, try showing of your insecurities. Or at least abstain from trying to hide them.

Getting something good up and running and making a success of it is super hard work with a lot of moving parts, and there are a ton of things that can go wrong and most likely will.

There’s no shame in acknowledging that.

Trying to hide that fact will ultimately just reflect bad on you. In addition to that it will make it super hard for people to help you, where you need help. And you and your company may suffer as a consequence.

And that’s not what you want, is it?

(Photo: Pixabay.com)

A happy note

Yesterday, a long time acquintance sent me a direct Twitter-message that made me really happy.

In it he basically stated that it was great to observe from the sidelines the new things, I am involved in, and that to him it looked like, I had found a much better place for myself than was the case, when I was in the media industry.

Apart from agreeing 100 percent with his observation, what made me happy about it?

Basically that I am now doing what I love doing (and was perhaps meant to do all along?) in a way that is transparent and authentic to such an extend that it’s noticeable to the outside world. Not just from me telling about it but from the reflections of people-

It’s not that that is a goal in itself for me. It just reinforces my belief that I am on the right track and adds to my determination to carry on and keep pushing.

(Photo: Pixabay.com)

Lipstick on a gig

Starting today, food-delivery company Deliveroo will no longer be delivering meals from restaurants in Germany. While in itself there is nothing spectacular about a business exiting a market, it is spectacular that the notice to the companies delivery people – riders, as they are called – was only FOUR days.

Variable low-wage pay, unclear working conditions and – as it turns out – non-existing notices of termination are some of the flip sides of what is being called the Gig Economy. And while – again – there is nothing wrong with a flexible work environment presenting new opportunities to people looking for something else than ‘a regular job’, we need to be aware of the fact that every coin always have two sides to it.

We are so accustomed to hearing all the stories about innovative new ways of doing things, sharing things etc, and how it is all the rage for the future. We need to remember that there may be some other truths behind the stories essentially driving the need for glossy narratives. And we need to have an open discussion about these things in order to avoid creating a future society with too much tension between those who have a lot and those who have very little. That tension NEVER ends in a good place.

Hat tip: @tveskov for the headline

(Photo: Pixabay.com)