by Max Dunhill, Business Development Lead, Oracle for Startups EMEA
It’s an interesting time to be an entrepreneur, with parallels being drawn between the current economic climate and the recession of 2008. I remember vividly being a door-to-door salesman during that financial crisis. After delivering my canned pitch at the first house, I was quickly rebuffed. The potential client pointed to his yard and asked, “Kid, can’t you see the foreclosure sign? Why am I going to buy your product when I’m being forced to sell my house?”
Now, like then, businesses need to stay in touch with the changing needs of their customers to remain relevant. For startups, that means opening a dialogue with prospects to understand what they need from their technology solutions.
Recently, I had the opportunity to connect with a cohort of 60 founders from Belgium’s largest accelerator, Startit @KBC. I shared advice from my time as a founder of an online learning platform, as well as my experience as business development lead for Oracle for Startups in EMEA.
The eye-opening experience I had at the front door of a foreclosed home caused a conscious shift away from the classic “ABC” sales role and into a more consultative approach. I now first seek to understand the customer’s pain points, so I can address them with personalized solutions.
Because people tend to buy from people, not companies, I resist the urge to rely entirely on brand and product features. Instead, I remember that I have two ears and one mouth, and try to listen twice as much as I speak. Especially during these testing times, showing your commitment to listening and understanding creates an invaluable human connection that builds relationships as well as books of business.
In addition to active listening, I work hard to establish an open line of conversation, using open-ended questions. You will know an open-ended question because they usually start with how, what, where, when, and why. Focus on getting to know the customer, rather than forcing the customer to get to know you.
Once you’ve established needs and open communication, you can open the door to specifics, like product specification. If you have proven that you understand their business, a sales cycle is more likely to materialize into an opportunity, even if it takes longer than usual.
Investors are obviously impacted right now as well.
I admit my approach to investors has changed. As a founder, I used to idolize VCs like they were rock stars. Then I realized that often the entrepreneur is the one taking the real risk! The responsibility for finding the right fit with investors, rather than jumping at the first offer, sits heavily on the shoulders of the founder, and it’s a decision that will serve throughout the upsides and the downturns of the startup journey.
With that new understanding, I treated fundraising more like a sales and marketing funnel. I communicated my value proposition and pitch with crystal clarity, I came prepared with pitch decks and financials, and I qualified my opportunities. After all, starry eyed admiration is not a sound strategy.
While it may feel daunting to pitch in a less founder-friendly climate, the silver lining is that the increased pressure will encourage operational resilience from an early stage. Resilience, of course, will be an enormous benefit to your company as you scale.
As John Mullins from the London Business School so brilliantly quotes, “The amount of money raised at seed and series A rounds is inversely correlated with a startup’s success…Less money raised leads to more success. That is the data I stare at all the time.”
Indeed, investor money will never make a business a success on its own. It should be viewed as an accelerator of growth rather than as the ticket to growth in-and-of-itself.
But before you go knocking on doors, consider the potential value of a partnership. This is where accelerators like StartIt@KBC and strategic partnerships like Oracle for Startups can play a valuable role. Objective third parties that are invested in startup success can provide a network of expertise to help you refine your solution and find product market fit.
As terrifying as it may be to navigate a generation-defining crisis, the startups that will emerge from the other side will be far more likely to succeed. Are you up for the challenge?