At Headstart, we take pride at being close to founders and early stage startups, and help them along in their journey. Our Mentor program is a testament to this fact and has helped many startups via close group sessions since the program’s inception.
One of the constant feedbacks we hear from founders is about how to handle lead generation and manage sales for B2B/Enterprise startups. To this effect we organized a Mentor session on May 5th 2018 for this topic at 91 Springboards, Indiranagar, Bangalore.
Four startups were shortlisted from the applicants and invited for a closed door session. They were:
- Karn Malhotra (Founder) joined us from Outlined
- Shivam Singh (Founder) joined us from GoTango
- Rohit Bhatnagar (Co-Founder) joined us from GaragePlug, and
- Satvik Sarwade (Founder) joined us from GoSnacker
They were mentored by Kushal Agarwal. Kushal is co-Founder Xoxoday, a Bangalore based company that lets people book “Local Experiences, Activities & Things-to-do” when they travel to a new city or want to explore something new in their own city. Kushal is also a travel enthusiast and has represented India in long formats of adventure like Mongol Rally & Great Nile River Ride.
Below were some of the key topics brought to the table by the 4 founders and that led to an interactive discussion in the group with Kushal sharing valuable insights from his journey:
- Pricing the product
- How to price the product for Indian market?
- The art of negotiation.
The best way to price the product is to be aware of all the cost that goes into building the product and the price point of your closest competitors. Use that as key insights to arrive at your price point that would make the offer unit economic positive.
In case of SaaS product make sure you create 3 packages from Basic to Premium and show incremental value as customer goes up the ladder. It is preferred to make standard discounts on list price rather than custom pricing for each customer. This is more sustainable way to scale compared to negotiating special price for every single customer.
- Building sales team
- How to build world class sales team in India?
- What are the usual challenges while scaling up the team?
It is important to hire for culture fit, but do not forget that eventually the hire has to be excited about the product that you are building because she/he needs to face the customer and convince them about the value of your product. When bringing in a new team member ensure that their expectations are well set in terms of what your product is and what your organization goals are.
It is also recommended that sales teams are clear on their goals and targets. Regular touchpoints are helpful in keeping the entire team aligned and moving towards a common target.
- Identifying customer contacts
- How to identify key decision makers within the customer organization?
- Are cold calls of any help?
To Identify the right contact within a customer organization one needs some understanding of the environment that one operates in and some research into the levers that can be pulled to reach the contacts.
For example, if you sell something that will help the Corporate Admin team save money, then find the highest possible contact within that team. One of the ways is to identify industry events where you can meet such contacts and network with them. In B2B environment relationships have to be build and nurtured over time, so patience is the key.
Cold calling is not a bad tactics. With some research and selective targeting many cold calls can turn into lifelong customers. Be careful not to overdo this.
- Managing working capital
- How to manage working capital as The AR and AP in B2B startups have different cycles?
It can take many months for startups to receive payments from their customers, while their liabilities come up for settlement earlier. In other instance, startups that deal with physical delivery / purchase of goods, might have to pay their vendors ahead of time while the startup’s customer will pay later, creating a gap of 4-6 months in case of large orders.
In such situations, it might help to negotiate with the customer to deliver in phases, easing out your AR and AP cycles. Another way is to reach out to Bank to discount on your invoices (esp if your customer is a known brand) and raise much needed capital at attractive rates. Recently, many companies have come up offering the same services as banks with better terms.
Overall, it was a great dialogue between startups at similar stage of their evolution and a 10X founder.
Volunteer, Headstart Bangalore