Sales and Marketing and How to Talk to Investors

Tyler Bosmeny, Founder and CEO, Clever
Michael Seibel, Partner, Y Combinator
Qasar Younis, Dalton Caldwell, Partners, Y Combinator

Tyler Bosmeny – @bosmeny
Michael Seibel – @mwseibel
Qasar Younis – @qasar
Dalton Caldwell – @daltonc

Notes

• 0m11s – Tyler Bosmeny – Sales & Marketing: $0 – 1 Million
• graduated withs statistics major, went to work for startup doing sales
• started Clever with 2 cofounders to build product for schools
• Clever: app platform for schools; 1 in 5 schools use; started 2012
• sales key piece for growth of Clever.com
• 1m38s – The Mystique (of sales): charming, well connected, perfect lines, golfers
• 2m15s – The Reality: you are the salesperson, build or sell; pick founder to own this founder passion trumps sales experience
• “build or sell, nothing else matters”
• passion for idea and deep industry knowledge trumps sales experience
• 3m28s – The Almight Funnel: prospecting, conversations, closing, revenue / promised land
• 4m16s – The Mission (prospecting): find the innovators (2.5%); it’s a numbers game; reach out to > 100 companies; top 3 methods (your network, conferences, cold emails)
• conference: go to where your users are
• cold email: key is to not write too much
• 7m30s – conversation: get on the phone and listen; best sales people spend more time listening than talking
• ask questions: why did you take my call today, what is your solution today, what would your ideal solution look like
• find out what prospect needs and understand their problem
• Uber conference (https://www.uberconference.com/) will email you log of who did how much speaking
• 9m37s – Religious Follow Up: boomerang for gmail
• need to have unhuman willingness to followup and drive things forward
• best case looks dismal; repeated no responses; constant back-and-forth; even from people who want to buy product
• your goal should be to get people to a yes or no as quicly as possible; 1,000 maybes are difficult to deal with
• be ambitious but focus on right prospects (getting to no better than long dragged out maybe)
• 11m30s – Closing Traps: Redlines: final step is to send them an agreement; YC has open sourced their template; don’t quibble over minor points
• 13m50s – Closing Traps: 1 More Feature: usually a polite pass; building it will not get you the sale; either: sign a conditional agreement, or wait to hear demand from more customers
• 14m45s – Closing Traps: Free Trials; early on you need commitment, validation, and revenue; free trial gets you none of this; instead offer a 30 day cancellation period on an annual contract
• once you’ve done enough sales, aks what can be scaled
• 16m39s – Looking Forward: 5 ways to build a big business; flea, mice, rabbits – marketing; deer – inside sales; elephants – field sales (by Christopher Janz)
• know where your customers fit and how much it costs you to sell to them (flea, mice, rabbits, deer, elephants)
• 19m07 – Michael Seibel – How to Talk to Investors
• Before the meeting (Michael); During the meeting (Dalton); After the meeting (Quasar)
• pitch: simply describe company and then ask for money
• 30 second pitch: this is your goto for any opportunity
• 2 minute pitch: this is for people more interested, investors, employees
• don’t need pitches longer than that (more opportunity to say something listener doesn’t like)
• 21m44s – 30 second pitch
• what does your company do? simple and straight-forward; assume no prerequisite knowledge; one sentence (mom test)
• how big is the market? second sentence; look up simple numbers for market size (investors need general idea of potential)
• how much traction do you have? (e.g. we launched x months ago, we are growing y% month, we have z users, revenue, etc.) if too early for numbers show how quickly company is moving (founded jan. beta by march, launch july)
• 24m30s – 2 minute pitch
• clear 30 second pitch (see above)
• unique insight: secret sauce, competitive advantage (aha moment, 2 sentences; what will kill competition; what don’t other know)
• how you make money: 1 sentence; don’t run away from questions (we’ll do this, that, says nothing); be clear and concise
• team: call out accomplishments that have made money; how many founders (2-4 ideally); how many technical v. business (50/50 or more tech); how long have you known each other (at least 6 months professionally or personally; all working full time; how you met); 2 sentences (the more you talk about a bad thing the worse it looks)
• the big ask ($$$): you have to know what you are talking about; are you raising on a convertible note or safe; what cap of safe is; how much money raising; what is minimum check size (use some jargon)
• that’s 2 minute pitch; let them talk
• 29m42s – When to Fundraise: Ideally at higher part of growth line but real world is at lower end of growth line
• typically want to have traction, which is point of strength
• want to be in position of strength, which happens when investors are asking to give you money; that is good time to go fundraising
• if investors aren’t asking about giving you money, you should be doing things to get noticed; stealth mode doesn’t get the word out
• have plan to launch and grow without getting lots of money; don’t want to be in position of we can’t do anything until you give us money–puts power into hands of investor
• pitch to investors should sound like “this things is moving; we quit our jobs and are working full-time; if you want to jump on great; if not there are lots of angel investors”
• show you have fully committed team working fast
• 31m58s – How to setup investor meetings: warm intros; think parallel; 1 team member
• pass on intro from someone who has passed on investing with you; that is kryptonite
• fundraising is a sprint not a marathon; schedule all meetings in the same week
• when setting up meeting schedule 3 weeks out and all investors on same week
• one team member should be invested in fundraising full-time
• 34m00s – Dalton & Qasar – investor pitch role playing; example of bad pitch
• 38m45s – analysis: void common mistakes: make sure listener understands what you’re working on; know your numbers; for market size ideally build bottom up analysis; you should understand something that is counter intuitive; your team should be uniquely suited for this business; drive the conversation to a conclusion
• know numbers; don’t name drop big company names that aren’t even related
• 39m50s – investor pitch example of good pitch
• 45m39s – analysis: Hallmarks of a good pitch
• capture interest, tell an interesting story, engage with the listener
• demonstrate insights and command of the market, passionate not dismissive
• collaborative meeting more than an interrogation
• actually ask for money
• 46m53s – After the meeting
• follow up (any response other than a check is a “no”)
• work on creating deal heat (supply / demand)
• due diligence on investors; know who you are selling part of your company
• know when to stop (addicted to fundraising)
• build your company – fundraising is not the end goal

Additional Reading

• Tyler’s Slide Deck
• Michael, Qasar, Dalton’s Slide Deck
• SaaStr – From-the-trenches sales advice by Jason Lemkin, founder of EchoSign
• How I Raised Myself From Failure by Frank Bettger (1949)
• Five ways to build a $100 million business by Cristoph Janz
• Pitching Hacks! How to pitch startups to investors by Venture Hacks
• Transcript

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