Think Big (But Sell Small)

“You think like a GE executive. You need to think like a startup entrepreneur,” I said to Tim and his tech partner, Raj.

I am seeing a movement of big company executives becoming entrepreneurs. The last time I saw this was in the late 1990s during the dot-com. Back then executives saw startups as quick flips that could make them millions. This time it is different. These executives want to create solutions that will make big businesses more efficient and more profitable. 

This is good, but…

These men and women think like they are still part of a big company. Like they have the brand, resources, and credibility of the big company they left behind. This is the thinking that makes for valuable startups, but it’s also the thinking that results in failure and squandered 401ks.

These executives should bring their corporate big thinking to their startup. But they need to control it by selling like a startup entrepreneur. It is this tension of thinking big and selling small that results in startup success.  

And here’s why.

Creating and selling a solution as a startup is all about personal buyer risk. 

You think solving the problem is the most important buyer criteria. You think they want to do what is best for their company. But what goes unspoken is the real buyer criteria: keeping his job. It is all about not getting fired. 

Yes. The buyer has a problem. 

Yes. Your solution appears to solve the problem. 

No. They will never buy it. 

Why?

Because the buyer must stake his own job on choosing a startup to solve his company’s problem. 

Here is the buyer’s analysis

If it fails, he’s unemployed. 

If it succeeds, he keeps his job. 

If he does nothing, he keeps his job. 

Since the first buying criteria was “Keep my job,” then doing nothing is the safest decision for the buyer. 

See graphic above.

The key to successful startup selling is to solve a real business problem with little to no personal risk to the buyer. This is the solution buyers buy from startups. You will close deals if you satisfy these two criteria. This means selling small, not big. 

And there are two ways to sell small. 

1. Product: Narrowly define the problem you solve for a big company, and solve just that problem.

2. Market: Sell to a smaller company where your buyer is the owner.

Multi-billion dollar startups all started this way. They sold small at first but never stopped thinking big. 

Marc Benioff, the founder of Salesforce.com, started by selling his solution to individual salespeople in companies. He solved their problems of keeping track of their prospects and their prospect communication history, increasing their personal productivity, and storing this information in a safe place. In short, it helped these individual salespeople close more deals and make more money. 

If the solution worked, the salesperson was more successful.

If the solution didn’t work, the salesperson still kept his job. It was a no brainer to do a 90-day trial and then, if it worked, pay the small monthly charge.

After Benioff realized early success with salespeople, he started selling to departments within big companies. He sold a solution that was stand-alone, requiring no integration to the back-end IT systems, and provided management with much sought after management controls. Again, no risk of the departmental buyer losing his job. 

Finally, after more than three years, Benioff closed his first enterprise deal.

Those first enterprise deals might appear to be high risk for the corporate buyer, but by partnering with large, credible service organizations, Benioff was able to eliminate this personal buyer’s risk. “No one gets fired for hiring Accenture.” And Benioff was able to attract large, credible services organizations like Accenture because he proved corporate demand by selling departments.

This is an example of a startup entrepreneur selling small and thinking big at the same time. Marc Benioff knew he had to close deals to attract angel investor money he needed so desperately. So he limited the problem he solved, which limited his market, which generated cash. This momentum attracted early-stage investors and got him to the departmental sale. It was this sale that brought in the VCs.

If Benioff would have bet his company by thinking big and selling big, there would be no Salesforce.com today. 

It is hard to sell small when you've spent your whole career thinking big. A startup is all about the tension between selling small and thinking big at the same time. The smart, practical former executive and now budding entrepreneur will get there quickly. And what gets them there?

Cash, and the lack of it. That’s the practical side of choosing to sell small.

Do a deal today!