Pour One Out for Failed Startups
Día de los Muertos, Day of the Dead, is a celebration in Mexico held on November 1 and 2. It is a day when friends and family gather to remember and pay their respects to those that have passed. The celebration was brought into the global pop culture consciousness through the Pixar film Coco.
In the same way, the tradition of “pouring one out,” usually alcohol, has become a way to show reverence to someone who has passed.
It is in these traditions we paused to honor those startups that failed.
Sure, it would be easy to remember that Pet.com flamed through US$147 million in the first nine months of 2000, or the streaming service Quibi, founded by Stephen Katzenberg, liquidated US$1.75 billion of investors’ money and closed after six months, or many others that failed spectacularly.
No, today we are honoring those thousands of startups, especially B2B tech startups, that no one ever heard about.
We admire tech startup founders. We understand the sheer amount of willpower, work, determination, and creativity it takes to get a company going. And, how much grit founders have in order to push through frustration and doubt to see their vision become a reality.
For most, they gave it the good fight and didn’t make it. There is a lot to admire about the effort, but we want to help prevent you from getting on the dearly departed list.
One of the major reasons startups fail is that they run out of money. (Which seems painfully obvious, but there are other reasons.) For bootstrapped B2B tech founders, this is easy to understand—there isn’t much money to begin with. That’s why it is critical to get sales going as soon as possible so you can get the cash you need to keep going.
That’s why your first sales hire is so critical.
Through our research and experience, we have found a common thread of why so many of the first sales hires for tech B2B startups fail—they hire the wrong type of salesperson.
Don’t get us wrong. Many start-up founders hire a good person as their first sales hire, an individual that has a good track record and hustles. On paper, they should have worked.
But they are not the right salesperson for where you are in your business cycle.
When a salesperson comes from an established company, all the support systems are already in place. The processes, procedures, marketing, and other things that help close a sale – the Playbook. These Playbook salespeople bring creativity, problem-solving, and other critical skills, but they follow the work of those that came before them and established the way.
For a startup, there is no Playbook. It hasn’t been created yet. The person that can close sales, create processes, help develop marketing and sales materials, find new and grow current customers, and brings critical customer and market intelligence back to the team is called a Pathfinder. They literally create a path into the market for others to follow.
Based on our extensive experience in the startup space, interviews with entrepreneurs, and qualitative research, we have found a pattern for what constitutes the right mindset and skillsets for the first salesperson of a B2B tech startup. These are the Pathfinders.
What is a Pathfinder versus a “typical” salesperson? Clearly some of the qualifications overlap, including understanding technology, positivity, communication skills and, obviously, the ability to close a sale.
But areas where Pathfinders are different include:
- their ability to deal with ambiguity, as many startups and their products quickly evolve,
- not just a willingness but an excitement around building the processes and procedures necessary for a successful sales operation as an organization scales,
- they bring a curiosity that allows for creative solutions,
- their hunger is motivated by something quite different to most other sales types.
We have codified the skills required to be a Pathfinder and developed an online assessment and rules engine that classifies candidates as a Pathfinder or a Non-Pathfinder. We screen them and send you five Pathfinders to interview so you can choose the one that is the best fit for your organization.
Compared to recruiters, our process is dirt cheap. The Right Five costs less than US$1,000 per first sales hire.
Want to find out more? Watch this five-minute overview and demo of The Right Five or send us a note and we will set up a meeting.
Curious to know more about the assessment? Want to see if you are a Pathfinder? You can take the assessment here for free but make sure you check out the notes at the bottom of the post before you start. Your results are yours, we don’t share them with anyone.