Bocar Dia is a Managing Director at Forum with a technical background in computing science. His data-driven approach to sales and go-to-market strategies stems from his experience at Hootsuite, where he was an early employee and witnessed the company's growth from zero to nearly $200 million in ARR. Bocar’s role here typically involved building first vertical or product teams. Over time he has developed a framework to think about early customer acquisition for new products, and new verticals.
After Hootsuite, Bocar became a founder and later an operator under the Forum umbrella. For years, he has been advising founders from pre-seed to Series B on early customer acquisition and go-to-market strategies from 0 to 1, covering various business sizes including SMB, mid-market enterprise and PLG and verticals from construction to finance and more. Forum now has over 300 portfolio companies, and while the answers to questions may be different and nuanced, the general framework remains the same. In this article, Bocar shares some critical pitfalls he has seen founders make during the early stage of founder-led sales.
What is Founder-Led Sales?
Founder-Led sales can be a daunting prospect for many B2B startups, but it doesn't have to be. With the right strategy and a bit of guidance, founder-led sales can help your business take off. The biggest thing that makes founder-led sales different than traditional sales for a Series A or enterprise company is that you're trying to get to product-market fit and have to build a sales process from scratch.
Early-stage sales can be challenging as you're still figuring everything out. You may have a barebones process, an untested pitch, a product in development, and no formal pricing proposal. Due to this, the sales process requires creativity and constant iteration. After each call, it's important to evaluate how to evolve the pitch. This is why founders often need to handle sales themselves.
The 0 to 1 journey covers the progression from idea to product-market fit. The stages you go through to identify product-market fit typically include
- Identifying a general pain point you want to build an MVP around
- Validating the pain with customers
- Pinpointing highly specific problems for your MVP
- Designing and iterating the MVP based on customer feedback
- Acquiring early customers
Founder-led sales strategies have advantages, but there are also potential problems. Founders are typically excellent visionaries and strategists, but this does not necessarily make them great salespeople. It is important to be aware of these common pitfalls in founder-led selling. In this article, we discussed five common pitfalls of founder-led sales that you should avoid in order to maximize success.
Pitfall 1: Failing to validate the market opportunity
Early-stage companies often focus too much on product validation and overlook market dynamics. Most startups fail due to a lack of market need, which should be the primary concern. A top-down approach to market size is not enough; a bottom-up approach is more informative. Consider the number of customers experiencing the pain point and whether it can lead to a venture-scale outcome ($100 million revenue opportunity within five years). Instead of focusing solely on building a minimum viable product, think about what a minimum viable company should look like.
This at first doesn't even sound like founder selling when you think about it because when folks talk about founder-led sales, they think about “where can I find my find my leads?” “How do I work on the messaging?” “How do I do customer discovery?”
But there's one particular thing we see over and over again with early-stage companies, and it's that the initial customer development conversations are so focused on validating things from a product standpoint that they completely miss out on some of the market and go to market dynamics.
By far the main reason over 42% of startups fail is a lack of market need. Founders focus too much on pricing and competition but fail to think of the market. And when you look at the data, the thing that most folks should be worried about is not actually having a market need.
The fundamental question founders should be asking themselves is: “Should I be even building a company around this particular pain point?”
We already know that in order to create economic value, the number of customers we can acquire, regardless of the model, is one of the critical factors. When you're identifying a pain point and really thinking about whether you should be building a company around it, use a bottom-up approach instead:
Think about the number of customers hours that actually would experience this pain point and whether this will lead to a venture scale outcome. Meaning: when you look at that market, can you see at the very least a $100 million revenue opportunity over the next five years? If not, then it's probably not a great market fit.
Instead of thinking initially about building a minimum viable product, think about what a minimum viable company should look like and work back from there. This enables you to actually come up with the right assumptions when you're building your market map and the right sizing of your market opportunity.
Once you identify the pain point,
- Think about the number of customers that would actually experience that pain point very acutely.
- Calculate what that market size would look like.
One of two things happens when founders go through this exercise. They'll either right away see that there is a massive market opportunity, so they need to tighten up on their ICP. Or you realize that this isn’t a real or big enough problem to generate a venture-scale outcome.
Pitfall #2: Assuming that because you are solving a real problem, customers will buy your solution.
Now that you've validated that there is a real market pain that will lead to a venture scale outcome, it's time to think about narrowing in on specific high-priority problems. The second pitfall is to assume that because you're solving a real problem, the customer will buy your solution.
It sounds pretty logical, but that's not actually how things typically go.
The biggest misconception in SaaS is that a customer has a problem and you're selling them a solution to that problem. What actually happens is that the customer probably already has a workaround or is currently solving something in a particular way. Your job is to convince them to move from their current way of doing things to your better way.
Your customer is thinking about all their legacy processes wrapped up in their current process, and they get a mental block when thinking about doing things in a new way or navigating to a new system People don’t like change.
To navigate this pitfall,
- Understand the TAM at a high level
- Take the time to define and iterate on your ICP. You don't really know what your ideal customer profile looks like, so you’ll have to define two or three groups that will likely be your ideal customer profile.
- Rank these different ICPs by pain level, urgency, willingness and ability to buy, and the solution's ability to actually drive some tangible results. This is what's going to help you actually have some case studies so that you can acquire new customers.
If you struggle to put together lists of your target customers, ask yourself again if this is an ideal set of folks to actually go after.
Pitfall #3: Doing too much selling. What?
So you've confirmed the pain points. You now have some high-priority pain points that you've identified, and now it's time to design and iterate on a solution so that you can address those problems.
Pitfall number three is doing too much selling. Meaning, founders will reach out to the prospective customer with messaging that would work for an established company. For example:
- This is my company
- This is what we do
- These are the problems that we're solving
- If you're experiencing one of these problems, would love to talk to you
This messaging is likely not going to work for you because nobody knows your product, your company, or who you are. There's a lot that needs to be done to get somebody over the hump and actually want to talk to you.
Early adopters are motivated by slightly different things than your regular mainstream buyers. Early adopters are interested in innovation, in doing things a little bit better, and they're okay with using a product that's not fully built out yet.
For early adopters, you want to do is appeal to them as an individual that's willing to help you as a founder. The messaging could look something like this:
“Hey Person X,
I'm working on a product that does X. Don’t worry, I’m not reaching out to sell you anything. What I actually want to do is get your feedback because we want to make sure that we're building the right thing. I looked up your profile and your experience and can see that you have deep experience in this industry.
Would love to connect and get some feedback if you have 15 minutes.
What you're doing here appeals to this person's ego. This way, you’re not burning a potential lead because you’re asking for their help. What tends to happen as an answer to this reach out is either the person has the capacity and time to help you and they'll tell you or they don't, in which case they'll likely just ignore the message.
To reiterate, the sales motions you go through when you already have a proven product and brand equity is very different than going from 0 to 1.
Pitfall #4: Failing to qualify and set expectations with launch partners
Now you’ve created a mockup that's ready to be coded.
You want some of the customers that were the most engaged and experienced a pain point in a very acute way to convert to launch partners. What tends to happen is that it's hard to get them to commit to becoming a launch partner. And what happens more often is that they'll tell you that they're that they'd love to become a launch partner, but then it keeps dragging on, which prevents you from building your product and iterating on it.
In a typical sales process, you might ask customers what their timeline is, and then set things up around their timeline. However, here, we are going to do the opposite of that.
instead of coming to them and saying, “Hey, we'd love to have you as a launch partner”, and letting them run the process, instead you might position it as “Hey, we've talked to 60 customers so far, and by far you're one of the few that provided the most insightful feedback. There seems to be alignment here between us and your organization. We're actually going to market with a few launch partners in Q4 of this year, and I would love for you to be one of the first 5 we launch with”
This creates a little bit of FOMO, and it keeps it on your timeline. This also enables you to qualify the urgency of that customer.
If they can’t make your timeline, then they can be added to the next batch of customers being onboarded. But DON’T let them dictate the time frame because you're on your own time frame where you want to move fast and iterate quickly and focus on the right customers. So make sure that you're actually controlling the process when it comes to that launch partnership.
Pitfall #5 Founders not doing founder-led sales themselves
I know sales is hard. However, it is VERY critical for founders to be doing the selling initially because there are a lot of things that could go wrong if you outsource it.
You need to be to stay as close to the customer as possible in order to really build the thing that you need to build. Remember that you're on your search for product market fit and founders should be as close to their customers as anyone in the organization. As a matter of fact, I'd say the whole team should be as close to their customers as they can be right now.
When do I hire salespeople? You can kind of think about this in terms of three distinct phases.
- You're searching for product market fit. You’re doing the things that need to be done in order to build a product that's actually solving the problem in such a way that can acquire some additional customers.
- You’re searching for go-to-market (GTM) fit. Here, you have developed a formula that enables you to know exactly what inputs will lead to what output. This is a measurable, scalable process that you've defined and it enables you to sell to more customers.
- Next is once you've got something that works and you're starting to grow, and put gas on the fire by hiring a little bit more. Fundamentally, I would advise not hiring a sales leader until you're at least at a Series A stage.
Just remember, as much of this as possible needs to come from you. And generally speaking, you should be the one building the initial part of the playbook because this is what will allow you to know exactly what type of sales leader to hire after that as well.
When it comes to founder-led selling, there are three books that I'd recommend you take a look at:
In conclusion, while founder-led sales can be a great strategy for B2B startups, there are common pitfalls that founds can find themselves falling into. It’s important to remember that searching for product-market fit and go-to-market fit should be done before hiring a sales leader, and that founders need to be as close to the customer as possible throughout the process