Selling to Businesses
Most startups are either B2C or B2B companies and a few actually combine both. I had never done any B2B selling prior to starting College2Startup, so I did make a lot of mistakes in my first few months. Infact, I tried to shy away from the B2B side and focused on acquiring end users. I am good at that, B2C is what I’ve always known and was comfortable with. C2S is one of those startups that is 2 pronged, i.e. I have to sell the service to businesses and I also have to sell it to consumers. I need both sides of the table working well for C2S to be successful. To get the gist of this article, you’ll need a brief summary of C2S – it’s a platform for startups to post specific jobs (engineering, design, sales and marketing), and I send those jobs in an e-mail to job seekers who have subscribed. I have to missions:
i. Get startups to post jobs (B2B) and
ii. Get job seekers to subscribe and ultimately apply for jobs.
Prior to C2S, I did user acquisition/growth hacking for a startup that resold unwanted gift cards to people at a discounted rate. I did that for a few years and so I became good at it. I added a number of viral hacks to the process, 1 user was bringing in 3 each quarter (of a year), sales were beyond our pre-set goals and I was happy. In the first 15 days of C2S, I had over 14k subscribers, I knew how to get them but alas I had a lot of trouble getting businesses to post jobs. The only reason there were any jobs in the first 2 months was because of TechCrunch and TheNextWeb. I didn’t know how to sell to businesses.
Today, I see an average of 5 new posts per day, each getting more than 50 qualified applicants. It doesn’t sound like a lot to most people, but to me, that’s reasonable and very welcomed growth from 1 post per week. In fact, that’s 3500% growth. Here’s what I’ve learned about selling to businesses:
1. Research a lot, do data analysis a lot. When you are just starting out, don’t spend money on adwords just yet. Take a few weeks to understand who needs your product, what industry they are in and how they can be reached. Spend some time looking at how they’ve worked around the problem (that you are looking to solve) in the past and create data on how that has worked out for them. In the next column, indicate how your solution compares to the past. Is it saving them more money to use your product? Are they getting something of better quality? Is yours helping them spend less time doing what they don’t want to do? List it all in your excel or wherever your data is. It will come in handy. In my case, I found I had to focus on seed funded startups or bootstrapped ones initially. Here’s why
- These startups have only very few people working there and most likely don’t have an HR department. The founder is probably overworked and doesn’t have too much time to spend looking for applicants. C2S will bring him the applicants and he only has to spend time interviewing.
- These startups are relatively unknown and so their ‘jobs’ page isn’t bombarded with unsolicited applications. I wasn’t going to go pitch dropbox, there’s no point.
- They are seed funded, so they can afford to pay a small fee to find quality talent. I didn’t go looking for one man teams built by a college sophomore living on campus.
2. Get better at interacting with people. I’m not here to be your yoda or ask that you join life classes, but if you are selling to businesses, you must have good people skills. Confidence is key, believe in your own ability and in what you are selling. This can even only be possible if your product works well. After the “TechCruch effect” started to diminish and there was barely 2 jobs posted every 10 days, I knew I had to start reaching out to startups asking them to trust me to find them good candidates. I wrote many emails, jumped on several calls, even a 1.5 hour skype chat with some lady in San Francisco at midnight her time (3am for me), just to get her to post a job. I desperately needed people to start posting jobs but I knew I had to convince them since they had no idea what C2S was or who I was. People trust you more when you convey confidence and seem to know what you are talking about.
3. Price Doesn’t really matter, is the product good? I’m not saying you should slap a $500 price tag on something worth $50 - $100, don’t do that. People will run from you. What I’m saying is, if you have a product that should go for $5 and you are selling to businesses, then sell it for $5. Don’t drop it down to $2.5 because you don’t want to “scare people off” with the price. I’ll tell you what, if a company is going to buy that product, they’ll buy it. If they’re not going to buy it, they wouldn’t. So dropping the price will only cost you $2.5, you still won’t have seen the benefit of an additional buyer. Dropping the price tactic may work well in B2C, I know it has worked well for me, but it doesn’t make much difference in B2B. If a company is really in need of that product but truly can’t afford (which is rarely the case), they will get in touch with you to try to negotiate a deal. Price doesn’t make people buy or pass, the quality/benefits of the product does.
4. Testimonials and Referrals go a long way. A lot of your follow on success could depend on how well you’ve done with your first few hard-earned customers. Usually if your produce worked well, they will be inclined to tell other companies about this new discovery. When I first got my first two “Thanks we hired someone from your site” e-mails, I immediately asked the startups if I could use their names in my e-mail pitches and “success stories” and perhaps place them on the homepage. This tells other people that you have credibility and goes a long way in converting cold pitches. These days 55% of jobs posted on the site come from referrals and word of mouth. I’m not funded so I can’t buy ads. What I can do is work very hard to make sure the product works and them customers can be my evangelists.
5. Always follow up. Few months after launching, I noticed a deep in applications to posted jobs. I had just decided to start following up with these companies 1 month after their job post to see how things went. I found that these companies were no longer getting as many applications per job post as they got before, infact some had decided to stop posting jobs. Something was wrong. They also suggested that they wanted to get more personal with each applicant and didn’t just want to get generic resumes. Several weeks of A/B tested ensued and in a short few months, we were getting even more posts than before. I listened to them, I had now started listing these job openings on the site and not only send them directly to people’s emails. I had also added a few questions to the application form and offered the applicant a chance to include a 2-minute video pitch for themselves. It worked well. It’s a always a learning process, it continues.
Drop me a line: @genystartup
When looking for a job at a startup…
Be Creative. Always be creative. Nothing stands out to a startup founder than a potential hire who shows he/she knows how to use limited resources to get big results. I’ve worked at 2 startups in the past 5 years and have seen a lot of applications in that time. The guy that usually gets the call back is the one who talks about that one cool hack he did in college or the one time she put together a group of seniors in high school to make an exhibition that raised awareness for the local orphanage. A giant list of degrees from several schools doesn’t push you up to poll position, what you’ve done in the past does.
Startups are about doing. For a startup to stay alive, things actually need to get done, stuff needs to be sold, apps need to be downloaded. That’s how money is made in this industry. Yes at a traditional company, you get paid to look at data and tell others what you think of it. Here you look at data, tell yourself what it means, then use that information to acquire users and ultimately sales/downloads. In this space, there’s usually no time to ‘train’ a new employee, that’s why 80% of job descriptions you see from startups have this line clearly placed in the Requirements: “Must have the get sh*t done attitude”. They all want someone who does, not someone who knows.
When sending in an application, spend less time highlighting all your degrees, your GPA and curating a lengthy resume. Spend more time showcasing the things you’ve done, the side projects you and your roommates are working on, that high school project you did that people kept talking about and most importantly how you will grow that startup if they bring you on board.
I personally like seeing videos (see this guy) , I like checking out the applicant’s github (if you are a coder), LinkedIn and short write-ups of all previous projects. Believe it or not, your cover letter goes a long way in attracting employers than your resume. Consider it your chance to “pitch”.
Have questions? Tweet me @genystartup.
Startups: Here’s A Calculator For Funding And Equity, Courtesy Of SmartAsset
f you’re a first-time entrepreneur, there can be a lot of confusing financial jargon to deal with — especially when you’re raising funding. If you don’t want to get screwed, some things are probably worth fighting over so that you don’t get screwed, but others probably won’t make a difference. Which is which? You can find plenty of viewpoints online, but now Y Combinator-backed startup SmartAsset has released a Startup Economics calculator, which shows you exactly how each financial decision can affect the money you make when you sell to Google (or, you know, whatever).
The calculator basically takes you through each event that can affect the division of a company’s equity. First you start with the founding — entering the total number of shares, each founder, and the equity that they receive. Then you enter employees and advisors and their equity. You can add multiple funding events and their details, and the eventual exit.
Some of this, of course, is fantasy math. When you’re raising a seed round or a Series A, you don’t know when or if you’re going to be acquired. But that acquisition is when questions like valuation really come into play, and when all that negotiating you’ve been doing hopefully pays off. SmartAsset helps you understand that ultimate financial outcome, displaying how much each party would make off a given deal, and, more importantly, how changing the terms of the deal would affect how much you make. For example, SmartAsset co-founder and CEO Michael Carvin says the calculator illustrates that trying to raise an $18 million valuation to $20 million probably won’t make a big difference, while the liquidation preference might.
Companies die from not being eaten by their competitors, but from self-inflicted wounds. They don’t have discipline. Their best people get frustrated. They chase all these shiny objects that aren’t core to the business. They become complacent because of early success.
- Drew Houston (Dropbox founder)
For those working at a startup/tech company, how did you get your job? What do you do?
We are doing a research as to how most people in the tech field found their jobs. So for the purpose of this blog, simply comment telling us what you do and how you found/got the job.
Why are we doing this:
As you know, college2startup is about helping connect hiring startups to qualified candidates, we want to explore as many options as possible to find the right fit for both parties involved.
What it’s like to work at… 10gen
How did you get a job at 10gen?
My name is Brandon Diamond, and I’m a Database Kernel Engineer at 10gen. I’m very active in the startup community having served as the producer of the NY Tech Meetup; I’m also involved in several other groups including the Hacker Union (HackerUnion.org) as well as the Brown University NYC Meetup.
The emphasis I’ve placed on community activism has helped me to build a great network of friends and colleagues; it has also afforded me the opportunity to learn a great deal about NYC startups and organizations. Over the course of the past year, I became friends with a number of engineers at 10gen; I even began to use MongoDB in a number of my own startup projects.
When I decided it was time to start a new job, I reached out to some of the friends I had made at 10gen and asked them about open positions. Between the engineering-oriented company culture, open source MongoDB code base, and 10gen’s strong ties to the startup world, I knew that 10gen would be a great fit for me. I came in for an interview and started the following week.
What does your job entail?
The Database Kernel Team at 10gen focuses on the MongoDB database server and related systems. We construct features, implement improvements, and address bugs along with other user feedback. We also help troubleshoot unusual behavior in user’s MongoDB installations.
Working on the Database Kernel Team has proven to be a fantastic learning experience. I spend a great deal of time working with low level aspects of a wide number of systems; the code itself is well architected and efficient. Importantly, there are a great many people who enjoy using MongoDB; it’s great to work on an interesting, complex project that directly impacts so many diverse — yet technical — users.
What is it like working at 10gen?
10gen offers a uniquely awesome startup experience. The culture is technical, casual, and meritocratic. Between the fully stocked snack bar and the weekly office lunches, working at 10gen doesn’t quite feel like… well, work. The team is friendly, outgoing, and passionate — everyone is excited about what they’re doing and eager to share what they’re working on.
Hierarchically speaking, the company is largely “flat”; the CEO and CTO sit alongside the other engineers and both write a significant amount of code nearly every day. The emphasis is on progress, community, and great software engineering.
All in all, 10gen is a fantastic place to work if you’re a startup-minded engineer who doesn’t want to compromise on tech or miss out on the startup experience. I couldn’t be happier with my choice of employer.
Wanna work at 10gen? check out our most recent newsletter or contact us: firstname.lastname@example.org for an intro.
Apply to become a Junior at 10gen Now: http://college2startup.com/apply/info/198
Financing For Startups
Found this brilliant read about how startups are getting funded nowadays on Business Insider:
There are lots of trends people have been talking about in tech financing—“superangels”; delayed IPOs; secondary market sales; and more.
But so far, few people have been putting the dots together: the entire financing landscape for companies is changing.
And, excitingly, it’s increasingly not just technology companies.
There are many new financing options for growing companies that weren’t available a decade ago.
Here’s how we break them down (we’ll visit each one in turn):
- Late-stage private equity
- The long-delayed IPO
We’ve seen some significant growth over the past few months since our launch and have been featured in some top tech publications, we’ve also worked with some excellent startups and have helped them find prime talent. We’ve been absolutely pleased with how things have been going lately and in a bid to keep users happy, we had put in place an open door policy. We asked and encouraged users to write to us (email@example.com) and give us feedback on what we could be doing better, and what they will like to see on college2startup.
There were three things in particular that kept coming up, and we are happy to share our response to all the feedback. We have implemented those suggestions in a way we felt will be most beneficial to the product.
Job seekers wanted:
i. Ability to browse through all the jobs we had submitted on the site. We have implemented a ‘jobs' section where you can see some featured jobs, but not all. In order to have access to all the jobs we have, job seekers will still have to subscribe to College2Startup.
ii. Shorter job descriptions in the newsletters with a link to the full job description. Done.
i. A more comprehensive overview dashboard in their accounts. They wanted to be able to see previous jobs posted, what’s been applied to, how many applications have been received to each job, ability to close the job if it’s been filled etc. We have implemented majority of these changes as we feel are appropriate right now. Over the next few weeks, we plan on making more changes in this area.
Thanks again for all the feedback! keep ‘em coming.
What Unemployment? Nothing like that in United States of Software
The New York Times recently reported a zero job growth in the US in August 2011 with surveys finding that job growth over the past 3 months were at 35,000, a far cry from the 90,000 jobs expected to keep up with the growing work force. Don’t mention this in the software industry especially startups, the situation is almost the complete opposite with demand for qualified engineers more than twice the supply. Many jobs are being phased out since they can now be automated, and several others are constantly outsourced because the labor is much cheaper. If there is one thing you don’t want cheap labor for, it is building software and that has contributed to the boom in the industry. Not too many people predicted this and those who did never cared to encourage young students to consider careers in Computer Science, and now the supply of talent coming out of our universities CANNOT keep up with the demand.
We have seen this first-hand at College2Startup and it was a big reason why the startup was created in the first place. Why are there so many software engineering jobs and not enough candidates? why don’t parents and universities encourage more students to get into Computer Science & physics knowing for a fact that in a few years most human activities will be run by computers? How can we get the software jobs into the hands of the right candidates?
In the past week alone, there have been 3 different startups who have indicated in their job submissions to us that they are going to pay you $10,000 if you refer your qualified (software engineer) friend or family member that eventually gets hired. That’s how competitive the hiring space is for startups. They all want the best people and they know every other startup out there wants the same, so it’s game on. One college2startup user who got hired in early August by a NYC startup came out of college in May not knowing how he would go about finding a job with his Computer Science degree, he had planned on working for the Government but also wanted to start his own startup down the road. Two weeks after receiving a job post in his e-mail, he was on his way to NYC from his college town at Urbana champaign to start a new $82K job as a software engineer at a VC-funded startup. The jobs are there in the software industry, but not enough of the matching talent.
Are you in college and bothered about the job market ahead of your graduation, should you consider switching majors? maybe. The industry is booming and doesn’t look like it will be slowing down anytime soon. In the middle of all the unemployment, maybe we can take solace in the never ending demand for Engineers.