MVP in B2B

Minimum Viable Product (MVP) has become an enormously popular way of releasing web applications. The idea is to get a product that works in front of users quickly and cheaply, watch them interact with it and constantly iterate and improve.  In some cases developers will release changes to the product every day, if not multiple times a day. This is also often referred to as an "agile" development environment. This approach is distinct from the old fashioned, "waterfall" approach where changes to the product are planned and implemented less frequently in well planned batches.

In a b2c environment, MVP works extremely well because a developer can release features and iterate based on data/learnings that they capture by watching thousands of users interacting with their code.

In a b2b environment, though, often this isn't so easy.  At the outset, there may only be one or two individuals using the product so good data and learnings may not be as easy to capture.  As a result, it's critical that when b2b organizations use an MVP approach they be super disciplined about setting up formal feedback loops where feedback is filtered quickly and regularly back to their product team. Most clients should support this as they’ll get to see much of what they recommend being built into products rapidly.  But it’s important to get buy-in on participation in the feedback loop from the early adopters.  This may be a new concept for them as most of their current software vendors are more than likely using the ‘waterfall’ approach.

Also, given the pace of change in an agile development process, it's important that the client-facing team is aware of the more significant product changes that are being made.  Often, an agile, MVP driven environment can lead to such fast paced change that b2b salespeople aren’t aware of the significant features or changes being released.  And an awareness of the substance and timing of product changes can be an excellent way to speed up deal movement and client adoption.

Social Selling: 3 Questions & Answers

There’s been quite a bit written recently about social selling – that is, using social media to help companies and salespeople drive revenue. Much of the advice is targeted at companies -- with tips on how to have conversations with prospects/clients through social media. I’m much more interested in how individual reps can use social media to their advantage.

A few thoughts:

1.  Which social networks should I be posting on?

I've written in the past about social graphs. You need to decide on the audience that you'll interact with in each social network. For me, at a high level, I interact with people I know professionally on LinkedIn, pretty much anyone on Twitter, friends and acquaintances on Facebook and only very close friends on Foursquare. You can view a list of my social networks on my About page.

It seems to me that the best social network to talk to your prospects and clients is LinkedIn and possibly Twitter. Your prospects/clients, for the most part, don't need to see your Facebook photos.

2.  What is the point of social selling?

So often I hear salespeople talking about how their clients/prospects just “don’t get it”. They have an awesome solution to their problem but their contact just doesn’t see it. It’s not that the contact is stupid, it’s that they’re looking at the problem through a much different lens. As a result, they don’t see your solution as the clear answer. Using social media intelligently is a great way to slowly and steadily begin to get your clients/prospects to see their problems through your lens. That isn’t to say you should be posting things to try to sell or to teach people something they don’t know.  Instead, the approach is to show your audience how you see things and let them come on board with your way of thinking at their own pace. Social sales is a very passive form of "drip marketing". I've written a few posts on drip marketing -- check them out to get some more context on this -- you can find them here, here and here.

3.  What kinds of things should I be posting?

Knowing that the goal is to attempt to get your clients/prospects to see the problem the way you see the problem, you should post links to intelligent articles, blog posts, white papers, etc. related to the problem that your product addresses. Don't be afraid to widen your problem into other areas -- you don't want to appear to focused on your own small world. The critical thing here though is to never just post a link. Post a short note about the topic with your take on it or a quick introduction as to why people should find it interesting. The point is that it's interesting to you and something you're passionate about so you want to share it with your network. Finally, if your company gets some good press, I'd advocate posting links to those articles and videos on your social networks. Don't overdo it and post it in a humble way, but allowing your clients/prospects to see what others are saying about you and your company is another effective and passive way to help clients/prospect see you in a better light.

In short, social sales is not going to close deals. But if done well it's a great way to get your clients/prospects to change the perception of their problem, your solutions, your company and you in a favorable way.

Is There A Shortage Of Sales Talent?

An article on the Harvard Business Review blog today talked about the shortage of good sales talent and the need for more formal sales training programs. My theory is that there's actually a lot of sales talent out there but those people simply don't want sales jobs. Here's the comment I posted.

Great post and an important topic.  I believe that in today's business environment you need a variety of skills to be a good salesperson -- it's not about back slapping on the golf course anymore.  Sales is much more complex now.  You need to have a strong understanding of finance, economics, accounting, marketing, strategy, technology, product and management to understand what makes a good prospect, what problems your prospects have, where markets are going and how your company's products can fit in.  These skills are not easy to acquire.  In my experience, they come from getting an MBA or working in a client-facing role in a very early stage company where you're forced to wear a lot of hats and figure out how to make your product work or, in a rare case, you've gained these skills on your own by educating yourself.  And I've found that people that have that kind of experience under their belt are, for the most part, uninterested in filling a typical "sales" job.  They're interested in getting into finance or consulting or strategy.  This is because sales has a stigma to it.  People with that kind of ambition and experience often don't want to tell their friends and family that they're a "salesperson".  Not because sales isn't an admirable job -- it is -- but because there's a stigma attached to it.  People that don't understand the complexity of today's sales environment think of the used car salesperson trying to sell them a lemon.

As a result, I believe we need to begin to stop using the word "salesperson" to describe the roles we're trying to fill.  And not just for recruiting reasons.  Because the word no longer describes what these people are being asked to do.  These people aren't selling knives door to door to every house in town.  They're not pitching and responding to objections.  They're seeking out and understanding business opportunities, carefully selecting the appropriate individuals to connect with, having open, informal business conversations, validating assumptions, iterating those assumptions, refining products and services, participating in internal and external strategic planning, creating mutually beneficial partnerships, negotiating legal & business terms, setting goals for the partnerships and seeing that those goals are met.

I believe that the sooner that companies create roles and job titles around this new skill-set, the sooner we'll see more professionals signing up to fill these jobs.

Hard Work Isn't Enough Anymore

There was a good op-ed from Thomas Friedman in yesterday's New York Times titled, Average Is Over, Part II.  The key line for me is:

Thanks to the merger of, and advances in, globalization and the information technology revolution, every boss now has cheaper, easier access to more above-average software, automation, robotics, cheap labor and cheap genius than ever before. So just doing a job in an average way will not return an average lifestyle any longer.

I've written in the past that hard work isn't enough anymore and as Friedman points out this is becoming more and more true. If a person or a machine anywhere in the world can do your job as effectively as you can at a cheaper cost it is simply a matter of time before you're unemployed. You have to find a way to add irreplaceable value.

In some ways, I think the key to thriving in this new environment is just to simply be aware that doing a "good enough" job isn't enough anymore.

I'm glad Friedman is giving people that awareness.

An Expensive Knee Surgery

I counted sixty-three different people involved in her care. Nineteen were doctors, including the surgeon and chief resident who assisted him, the anesthesiologists, the radiologists who reviewed her imaging scans, and the junior residents who examined her twice a day and adjusted her fluids and medications. Twenty-three were nurses, including her operating-room nurses, her recovery-room nurse, and the many ward nurses on their eight-to-twelve-hour shifts. There were also at least five physical therapists; sixteen patient-care assistants, helping check her vital signs, bathe her, and get her to the bathroom; plus X-ray and EKG technologists, transport workers, nurse practitioners, and physician assistants. I didn’t even count the bioengineers who serviced the equipment used, the pharmacists who dispensed her medications, or the kitchen staff preparing her food while taking into account her dietary limitations.

Atul Gawande, writing about the resources required to complete his mother's knee surgery in this week's New Yorker article Big Med.

User Driven Valuations

I wrote about Facebook's IPO back in May pointing out how unbelievable it was to me that a company that started back in 2003 and really doesn't make anything of substance or have a very compelling revenue model could go public at a $100 billion dollar valuation. I ended the post by saying, "the world has changed".

Well, maybe not. A lot has changed for Facebook since then (see stock price chart above).

Their market cap is now below $40 billion and the consensus seems to be that their stock price is going to continue to fall. That said, their shares are still trading at around 32 times earnings -- so there's still a decent amount of hype around this IPO.

One of the primary reasons for all of the hype is that Facebook is so widely known and widely used. They have hundreds of millions of users; many of them use the product several times a day, every day. And the vast majority of these users know absolutely nothing about investing.  But because they use the product and know the product, they were compelled to buy some shares. As a result, the company was hugely overvalued following its IPO.

Contrast this with Globus Medical, a medical device company that went public on Friday with virtually no hype. It’s unlikely we’ll see this stock nosedive like Facebook. They have a fraction of the customers that Facebook has – they make medical devices used in spinal surgery – so there are far fewer people interested in owning a piece of the company. There’s far less hype.

There have been literally thousands of consumer web services started and funded over the last couple of years. Many of these companies have millions of users and no revenue or compelling revenue model. As a result, I’d expect to see more and more companies go public in the near future with inflated valuations that are propped up by their user base.

The Facebook IPO underscores a good lesson for amateur investors: just because you use a product every day doesn’t mean it should be a part of your portfolio.

Don't Be A Salesperson

One of the biggest challenges in sales that I hear about all the time is when a salesperson has had a good meeting with a prospect but now that prospect has stopped returning emails and phone calls. The salesperson keeps emailing and keeps calling but never hears back. Eventually the salesperson concludes that the prospect is either rude or just isn't interested in the product or service. I think that conclusion is completely missing the point.

As a professional, when another professional that I have met with calls or emails me I will always call or email them back. And I've found this to be true of nearly everyone I've interacted with in my career. It's a general courtesy to respond to another professional when they contact you about something. And I'm even more responsive when I believe that the professional has something that can benefit my business. And when I've determined that a partnership between our businesses doesn't make sense, I'll always communicate that to the professional with a call or an email.

But here's the catch: the professional relationships I'm talking about are what I call "mutually beneficial relationships". They are interactions where the professional can help me and I can help the professional. There's a level playing field of professionalism and shared value. However, when I begin to believe that the person I’m speaking with is trying to sell me something that I’m not interested in or is only trying to help themselves, they go from being a professional to being a salesperson. And I’m much less responsive with salespeople than I am with professionals.

To me, the worst thing that can happen to a salesperson is to be viewed as a salesperson. Because in the prospect’s mind you have gone from being a professional looking to provide value in return for value to someone that is beneath them. You've gone from being the cool and interesting guy at the end of the bar to the loser that walks around hitting on anything that moves. And as you try harder and harder to push your agenda, the less interested the prospect becomes.

My advice: don't be a salesperson, be a professional. Be laser focused on mutually beneficial relationships. Have a healthy paranoia that the person you're talking to doesn't care about what you're saying. If you don't know, ask them. Walk away from prospects and people that aren't interested. You're bringing value and your prospects are bringing value -- if there isn't a match, walk away.

To say it simply, you should strive to create relationships with prospects where every email you send and every call you make is promptly responded to and returned. And that’s not a function of your pitch or the quality of your product. That’s a function of your ability to be perceived as a professional interested in providing mutual value.

NOTE: I’m not talking about job titles here. You may have the word “sales” in your title and that is fine. This post isn’t about titles, it’s about how you’re perceived as a businessperson.

A Shortage of Doctors

We’re currently facing a doctor shortage in the U.S.  And a recent article in the New York Times pointed out how this shortage is about to get worse as we expand medical coverage to 40 million uninsured Americans.  The Association of American Medical Colleges estimates that by 2015 the country will be short more than 62,000 doctors, and that number will more than double by 2025. In addition to healthcare reform the article points to a few contributing factors that are causing the shortage:

1. Increased Medicare coverage for Baby Boomers (older people need more care).
2. Declining physician compensation – to make money, doctors have to specialize, leading to a shortage of primary care physicians.
3. Aging doctors are beginning to retire at a more rapid pace.

There’s no doubt that we’ll need more doctors in this country moving forward.  But in parallel, I believe it’s critical to continue to find ways to make the physicians we have more and more efficient.  I’m excited to see increasing amounts of early-stage capital heading to companies that have that goal in mind.

The Irony In The Supreme Court's Affordable Care Act Decision

There's a good column in the New Republic this week noting the irony that John Roberts decided to uphold the individual insurance requirement but struck down the expansion of state Medicaid payments.  Part of the Affordable Care Act would have required states to expand Medicaid eligibility if they wanted to receive increased federal funding.  They would have had to pick up a relatively small amount of the increase (10%) in return for big bucks from the federal government, but the court still struck it down. The statement made by the court in this decision essentially opens the door for states to fight any future changes that congress makes to Medicaid.  And this presents significant challenges for the federal government as it seeks to protect the viability of its investment now and in the future.  If the states begin to exercise too much individual control over the program, the federal government may opt to back off and simply run the entire program at the federal level.  Something that, ironically, Democrats would prefer.

It'd be ironic if a precedent set by the conservatives in a contentious healthcare debate ultimately leads to a more centralized government program.

Retaining Your Employees

Fred Wilson had a good post a while back on employee retention. I posted some of my thoughts in a comment there and thought I'd post them here as well. One trend that I’ve seen is that employees leave companies, for the most part, for one of three reasons:

1. They don’t think they’re great at what they’re doing

2. They don’t feel like what they’re doing is important

3. They don’t feel appreciated for what they’re doing

Smart, ambitious people want to be winners. They want to be awesome at what they do, they want to be doing work that is meaningful and impactful and they want to feel appreciated for it. If an employee feels this way, it’s very unlikely that they’ll leave. But with so much going on, busy managers often forget about these things. It’s critical for managers to stop and recognize when an employee is good at something. Verbalize it, don’t just think it. Tell them they’re awesome. Say thank you. Show appreciation.

Everybody gets insecure at some point, even top performers. I remember Mike Krzyzewski, Duke’s basketball coach, explaining that once or twice a year he calls his best player into his office to tell him how much he’s appreciated. This kid is in Sports Illustrated and on ESPN and is the most popular kid on campus, but as Coach K says, everybody gets insecure. And when they do, results suffer.

It’s management’s job to create an environment where people feel awesome. They feel like they’re good at what they do, they’re doing important work and they’re appreciated by their company. When you have these three things in place,you’ll see your retention numbers soar.

As Jack Welch used to say, self-esteem is the fuel that powers great companies.

You're Not Special

Here's my favorite excerpt from David McCullough Jr.'s highly publicized commencement address at this year's Wellesley High School graduation.  It's about time educators starting sending this message...read the entire speech if you get a chance.

Contrary to what your u9 soccer trophy suggests, your glowing seventh grade report card, despite every assurance of a certain corpulent purple dinosaur, that nice Mister Rogers and your batty Aunt Sylvia, no matter how often your maternal caped crusader has swooped in to save you… you’re nothing special.

Yes, you've been pampered, cosseted, doted upon, helmeted, bubble-wrapped. Yes, capable adults with other things to do have held you, kissed you, fed you, wiped your mouth, wiped your bottom, trained you, taught you, tutored you, coached you, listened to you, counseled you, encouraged you, consoled you and encouraged you again. You’ve been nudged, cajoled, wheedled and implored. You’ve been feted and fawned over and called sweetie pie. Yes, you have. And, certainly, we’ve been to your games, your plays, your recitals, your science fairs.  Absolutely, smiles ignite when you walk into a room, and hundreds gasp with delight at your every tweet. Why, maybe you’ve even had your picture in the Townsman! And now you’ve conquered high school… and, indisputably, here we all have gathered for you, the pride and joy of this fine community, the first to emerge from that magnificent new building…

But do not get the idea you’re anything special.  Because you’re not.

Is Sales A Dying Profession?

A commenter on the 'A Sales Guy' blog asked this question the other day and Jim Keenan posed the question to his readers. There's a decent discussion on this topic on his blog so I recommend checking it out. Here's my answer:

Short version: Absolutely Not.

Longer version: Before you can answer the question of whether or not sales is going away, you have to define what salespeople do.  To me, salespeople make connections and tell stories that allow products to be diffused into the market at a faster pace and on a wider scale than they would be if a salesperson wasn't involved.  So companies hire salespeople when they believe that the investment in those people will be outweighed by the incremental revenue that will be produced from their activity.

That said, the commenter is right that because of the internet there are some products that can be sold to enterprises without the involvement of a salesperson.  But that doesn't mean salespeople are going away, it just means that salespeople will have to continue to adapt to selling those things that can't be sold off the shelf -- this means more complex sales and more innovative products.  This has always been true -- products adapt and salespeople adapt.

If a company decides that they can rest on their laurels and its products are so refined that they don't need people out making connections and speeding up the diffusion of their innovative products into the market, then salespeople aren't going away, that company is going away.  

In short, if a company feels like it doesn't need salespeople then that company either isn't innovating or doesn't have very ambitous goals.