- The CEO of Clever, Tyler, shares his insights on sales and how it has contributed to the growth of his company.
- He initially had no experience in sales but realized that as a founder, he had unique advantages such as passion for the product and industry knowledge.
- Tyler discusses the different stages of the sales funnel, including prospecting, having conversations, closing deals, and generating revenue.
- He shares strategies that have worked for Clever, including leveraging personal networks, attending conferences, and using cold emails for prospecting.
- Tyler emphasizes the importance of listening during sales calls and understanding the customer's problem.
- He also highlights the significance of follow-up in the sales process.

- The speaker shares their experience of closing deals and the importance of following up and driving things to closure.
- They emphasize the need to focus on getting a yes or no quickly, rather than having a pipeline of maybes.
- The speaker mentions the process of redlining agreements and announces that YC has open-sourced their deal documents.
- They caution against spending too much time on document review and quibbling over minor points, as it can delay progress.
- The speaker advises against building specific features for potential customers and instead suggests waiting for demand from a larger customer base.
- They warn against falling into the trap of offering free trials, as it does not lead to revenue or commitment.
- The speaker discusses the importance of considering scalability in the sales process and pricing the product appropriately.
- They conclude by offering their email address for further questions and mentioning job opportunities at Clever.

- The speaker is Michael Seibel, a current YC partner and founder of two companies.
- He wants to demystify the process of creating a pitch and help founders explain their company and ask for money.
- He discusses the importance of a 30-second pitch, which should be simple and straightforward, explaining what the company does, the size of the market, and the traction it has.
- He also explains the components of a 2-minute pitch, including a unique insight, the business model, the team, and the big ask.
- He emphasizes the need to be clear and concise in these pitches and to avoid overcomplicating things.
- He advises founders to know the details of their fundraising, such as the type of investment and the amount of money being raised.
- He concludes by discussing the timing of fundraising and the importance of having traction before seeking investment.

- The key to successful fundraising is to flip the equation and make yourself strong while making investors weak.
- Look for signs that you are strong, such as investors asking to give you money or talking to people about your startup.
- Create a plan to launch and grow without needing a lot of money.
- Always show that you have a fully committed team working fast, even if you haven't launched yet.
- Warm introductions from other entrepreneurs or previous investors are the best way to set up investor meetings.
- Schedule all investor meetings in the same week to show that you are busy and not desperate for money.
- Have one team member dedicated to fundraising full-time.
- In a mock pitch, it is important to clearly explain what your product does, know your numbers, provide insights, and drive the conversation.

- The company is a messaging product that allows users to message a specific location (e.g. a store, airport, etc.)
- The majority of messages are not feedback, but rather inquiries about things like store hours, job openings, and reservations
- The company currently has 350 businesses using their product in the San Francisco Bay area
- They are exploring two paths for monetization: targeting small and medium-sized businesses (SMBs) who are willing to pay $50/month, or targeting larger customers who typically pay $3-4 million per year for feedback tools
- They are seeking funding and have already raised $250,000 from investors
- The team consists of three founders with technical and retail backgrounds
- They are looking to partner with consumer-facing companies like Yelp, Google, and Facebook for distribution
- The goal is to become a messaging infrastructure between consumers and businesses
- It is emphasized that fundraising does not equal success and that building the company should be the main focus

- Tyler, CEO of Clever, shares insights on sales and its role in the company's growth.
- Strategies for sales success include leveraging personal networks, attending conferences, and using cold emails for prospecting.
- Importance is placed on listening, follow-up, and driving deals to closure.
- YC partner Michael Seibel discusses the importance of concise pitches, knowing fundraising details, and creating a strong company.
- Clever is a messaging product with 350 businesses using it in the San Francisco Bay area.
- Monetization options include targeting SMBs or larger customers, and the team is seeking funding.
- They aim to partner with consumer-facing companies and become a messaging infrastructure.
- It is stressed that building the company should be the main focus, not just fundraising.

Lecture Transcript: http://genius.com/Tyler-bosmeny-lecture-19-sales-and-marketing-how-to-pitch-and-investor-meeting-roleplaying-annotated

Three segments in this lecture:

Tyler Bosmeny, founder and CEO of Clever, starts off today's lecture with an overview of the Sales Funnel, and how to get to your first $1 Million.

Michael Seibel, founder of Justin.tv and Socialcam and Partner at Y Combinator, then goes over how to talk to investors - the pitch.

Dalton Caldwell, founder of imeem and App.net and Partner at Y Combiantor, and Qasar Younis, founder of Talkbin and Partner at Y Combinator, then perform an investor meeting roleplay to give you a taste of how it actually might look behind the scenes.

See the slides and readings at http://startupclass.samaltman.com/courses/lec19

Discuss this lecture: http://startupclass.co/courses/how-to-start-a-startup/lectures/64048

And what I want to talk today is about sales.

And I have a little bit of insight into this.

I actually studied math and statistics, probably like some of you here in this room.

And thought I was destined for this world of finance.

And at the last second a friend of mine roped me in to join his startup and asked me to do sales there.

Which was something that I knew nothing about.

And so, had to figure out on the fly and spent a couple of years there figuring out sales for this very early stage company.

And then When it came time to start Clever, you know, we started Clever and I did it with 2 co-founders who were very technical and 1 very product oriented.

And we wanted to build this product for schools.

And I thought that experience would have no relevancy whatsoever.

But it turns out that some of the things that I picked up at this, this previous job where I was figuring out sales, have been huge parts of what's made Clever grow so quickly today.

We are an app platform used by developers, And it's used today by about 1 in 5 schools in America.

And so sales has been a key piece of that.

And I want to use this time to just share some of the things that have worked for me along the way.

Of course, There's a million ways to do this.

So first I want to start about how most, how I used to perceive sales.

And a lot of people see sales as having this, you know, a lot of mystique around it.

You know, it's people who are you know, really articulate and impossibly charming.

And they have these, you know, killer closing lines that they use.

And I think this is how I saw sales and I think this is how a lot of founders I talk to see sales.

Because they say things to me like, you know, we're just going to work on the product and build a great product.

And then when it's finally finished, we're going to hire the sales people.

And what I've learned is that hire the sales people.

As a founder, the reality is, that's you.

And so, you know, Paul Graham likes to talk about how there's 2 things you should be doing at any point in time when you're starting your company.

You're either talking to your users or you're building your product.

And that talking to your users part, that's selling.

And so, you know, this is intimidating to some people because they're like, I've never done sales.

And, and I wouldn't even know where to begin.

But it turns out that as a founder, you have some unique advantages that make it possible for you to be really, really good at sales.

And 1 of those is your passion for the product and what you're building.

And the second is your industry knowledge of what your, of the industry and the problem that you're solving.

And those 2 things actually totally trump sales experience from what I've seen.

So this is actually my co-founder doing sales.

This is what sales looks like, you know, in the very earliest days of a startup.

It's not Don Draper, it's, it's a lot of calls like these.

But this is something that even as a founder, who's never done it before, it's very easy to do.

And what we did at Clever was we dedicated 1 founder, which was me, to peel off and say, okay, Tyler, you gotta go figure this out and and work on this full time, because it's so important to our business.

So, couple things that I've picked up about sales along the way in, in trying to figure this out.

You know, the first thing that everybody knows about sales is they say, okay, it's a funnel.

And you have these different stages of funnels and, of, of the funnel and you move your customers through it.

Pretty common categories, there's this prospecting category where you're trying to figure out who's even interested.

Then you're having a lot of conversations, which is a second level of the funnel.

Then you're finding out who's really serious and you want to close them and sign the deal.

And then of course you're in the promised land of, of revenue.

And what I thought would be interesting would be to talk about each, each of the stage.

A couple strategies that we've used at Clever that have worked really well.

So that these aren't abstract things, but things that you know, you can hopefully use at your startup.

So prospecting is the process of figuring out who will even take your call.

And you know, 1 of the things that I realized early on.

So there's this guy, Everett Rogers, who, who's created this technology lifecycle adoption curve.

Where you've got, you know, your innovators who will try new things, and you've got your early adopters, your mid-stage adopters, your late adopters, your laggards.

And 1 of the things that was really helpful for me in understanding sales at an early startup, is he's quantified the tail of the spell curve.

And this part over here, the innovators, those are your potential customers.

And it might seem discouraging that only 2.5% of companies are your potential customers or would even consider buying from a startup that has no users and no revenue.

I found it to be extremely helpful to have this frame of mind because you realize when only 2.5% of companies will even take your call or consider using your product, you realize what a numbers game this becomes.

So if you want to reach that 2.5% and you want to get some early sales, you, you, if you're starting to do the math, you're hopefully starting to realize you have to do a lot of calling.

You have to do a, talk to a lot of people.

So early on in the early days of Clever, this was my job.

You know, in the, in the 2 months, the first 2 months of YC, I reached out to over 400 companies.

Trying to get them to take a call and talk to us about what we were building.

There's 3 ways that I have found most successful in in, in prospecting and getting these people.

Another 1 is conferences, which is surprising to a lot of people.

And then the 1 that people are most familiar with is cold email.

And when I say conferences, this is what people think.

They think I'm talking about CES or, you know, E3 or something.

And actually the kind of conferences where sales happen look more like this.

And We've got, we would, in the early days, would go to a lot of these.

Because you've gotta go to where your users are.

And if they're, if you're selling to CIOs and there happens to be a gathering of them at a hotel in Milwaukee, guess what?

So we'd go to conferences like these, We'd get the attendee list in advance.

We'd email every single person in advance and, and try and set up meetings so that when you get there, every single minute of that trip was, was well spent.

And this was huge in Clever's earliest days.

These, this is where we met all of our earliest customers.

The second thing I mentioned is cold email.

A lot of people don't know how to write cold emails.

It's actually really easy, and the key is not to write a lot.

This is an email template that I used early on, and you're welcome to copy it, but it's really short.

Here's who I am, here's what I'm building, and I'd love to talk to you about this.

It's really easy and, and you can customize this and find out for every business you want to sell to.

And you can send out quite a few of these.

And the reason this is so important is because you've gotta build that first layer of the funnel.

And this is another place where a lot of founders I think just have a lot of questions about what to actually do.

And the biggest thing to take away, in fact, if you only take away 1 thing from this presentation today.

The number 1 thing you should remember is when you get them on the phone, remember to shut up.

So many founders, when I help them with their first sales pitch, they finally get somebody on the phone who wants to talk to them about their product.

And they're so proud of this thing they've been building for the last 3 months, that all they want to do is get on the phone and talk about every feature, and talk about all the different things it can do and talk about why it's the greatest thing in the world.

It's just part of being really proud of something.

But it turns out that if you watch the best salespeople, like the best salespeople in the world, the top 1%, and you have a chance to listen in on a call with some of those people like I have.

The most surprising thing is how little talking they do.

In fact, I've seen calls where the, where the salesperson told me their goal was to only spend 30% of the call talking and have 70% of the call the other person.

They'd say things like, why did you even agree to take my call today?

This problem that we're talking about solving for you, how do you solve it today?

You know, what would your ideal solution look like?

And they're not, they're not doing the talking.

They're finding, they're doing everything they can to find out what this person needs and hopefully understand their problem even better than they do.

And in fact this is something IIII drill into everybody at Clever.

And there's actually now, if any of you use Uber Conference, they have this amazing feature where when you hang up a call, it sends you an email automatically and tells you how much you talked versus how much the other person talked.

And looking at 1 of those emails, you know, if someone doing sales at Clever, I get 1 of those emails.

I can tell immediately how likely the sale is, based on how much talking we were doing.

Now you got on the phone, do a lot of listening.

And then the other part of this stage that surprises a lot of people is follow up.

So here's a lot of different steps that you can imagine going through.

You know, emailing somebody, not getting a response and emailing them back, calling them, leaving a voicemail, having a pricing call.

You know, there's probably like, you know, 60 things up here on this slide that could be steps for closing a deal.

These actually aren't just random things.

This is 1 deal that, this was the second deal Clever ever signed.

These are all the different steps that we had.

And you can see there's a lot of really embarrassing things up there.

Like, I emailed somebody and they didn't respond.

And I emailed them again and they didn't respond.

And this is from somebody who wanted to buy our product.

I see so many founders who they have a great call with someone, they send an email, they don't hear back, and they say, oh, that person might not be interested.

This is what it looks like in the best case.

And And so you really have to have kind of this unhuman, unreasonable willingness to follow up and drive things to closure.

Now, I'll qualify that with 1 thing, which is to say when you're starting a company, your time is extremely valuable, because it's your only resource.

And you couldn't possibly do this for every single person who might buy your product.

So your goal should be to get people to a yes or no as quickly as you can.

Where you die is if you have a thousand maybes.

And sometimes I talk to founders who say, oh yeah, I have this great pipeline of, you know, a hundred people who are, who have expressed interest in our product.

If you can get to a yes or a no, in some ways a no is, is even better than a maybe.

Because it allows you to move on and focus on somebody who might be a yes.

So, have this superhuman level of, of follow up and ambition, but make sure you're focusing it on the right pieces.

So you've talked to some, You've talked to a ton of people.

You've followed up with them ridiculously to the point where they, they just know you're not going away and they've gotta sign an agreement.

This final step is something that, if you haven't done before, might seem opaque, but it's actually really simple.

So you'll send over an agreement, their lawyers will mark it up, your lawyers will mark it up, and you kind of go back and forth.

If you're part of YC, this is really easy, because YC has standard template agreements that they give you, so you don't have to find these, And you can just, you know, use those.

You know, if you weren't part of YC, you kind of had to figure this out on your own.

1 of the things that I'm really excited about is, as part of this presentation, YC has agreed to open source.

So these documents that YC founders used to get are now going to be available to everybody.

So this should never, hopefully, never be a barrier to anyone who wants to do sales for their startup.

And then the other thing I'll say about this, a place I see so many smart, smart people go wrong, Is you gotta remember what your goal is.

Your goal is to sign some deals and get some reference customers and get some validation and get some revenue.

That, if you don't do that, your startup is, is, you know, toast.

So In light of that, it's really surprising how many smart people will want to do 10 rounds of document review, quibbling over the most minor points because of pride, because of intelligence, whatever.

You know, make sure the agreement is the way you want it, but then sign it and move on.

I've seen founders spend months quibbling over some indemnification clauses and their business would have been way better off if they'd you know, just signed the deal and, and moved on to the next 1.

So, that's 1 closing trap you can fall into.

1 other closing trap that I see founders struggle with a lot is they're talking to a company who says, I will use your product, but I just need 1 more feature.

You know, or they say, you know, I'd love to use your product, but it doesn't have this 1 feature, so we're just not ready.

And to most people, especially if you're ambitious, when somebody says that to you, what you want to hear is, oh, well I can build that feature, great.

You know, I'll build that feature and then they're going to use my product.

But the problem is it almost never works that way.

In fact, somebody telling you that they would use your, they wanna use your product but it's just missing this 1 feature.

I would almost map that to a pass in your mind.

Because 9 times out of 10 if you actually built that feature You go back to them and then there'd be 1 more feature.

Or there'd be some other reason that they're not using the product.

So, if somebody says to you, hey, I wanna, but, you know, there's this 1 thing that's preventing us from using your product.

Let's sign an agreement And we'll put in the agreement that we're gonna build this feature, in which case, you know, you know that if you build it, you're off to the races.

Or, more commonly, what we did at Clever was we would say, that's great, we're gonna wait to see if we hear that demand from our customers.

And then once you have a lot of customers requesting it, then you should build it regardless.

And then and then you're not, you don't have to worry about doing something that's customer 1 off, which is what you really want to avoid.

And the other trap I would highly, highly recommend you try to avoid is the free trial trap.

People, you know, they go down this path with a, with a customer, it seems really exciting.

And then the customer says, oh, well, can I get a free trial?

And you can't blame them, that's a totally reasonable thing to ask for.

But the problem is, when you're starting a startup, you need revenue, you need validation, you need users, you need commitment.

And free trials get you none of those things.

So you go, you do all this work and if you end up with a free trial, unfortunately you haven't made as much progress as you, it's actually terrible.

You've, you think you've made progress, but really at the end of the free trial you're going to have to sell them all over again.

So, the way I handle this that has worked really well, is when somebody says can I get a free trial?

You say well we don't, we don't do free trials, but what we can do is we're gonna, we do annual agreements here.

And what we'll do is for the first 30 or 60 days, if for any reason you're not happy, you can opt out.

And that's a way to get you the things that you need while giving them the comfort that they might need to take a chance on a startup.

So that minor change is actually makes a night and day difference when you're, when you're thinking about these things.

All right, so you've prospected, You've had a lot of conversations.

Now you've closed people, you've gone through the red line process, you worked out the free trials, and you're on your way, hopefully, to your first sales.

Now, early on, you can think of sales as just like any other thing of a startup.

Your goal is to, you don't have to do things that scale.

In fact, you can purposely do unscalable things to try and get early customers.

But the other thing that I think is really important to keep in mind is once you've done this enough, what you should start thinking about is, well, what aspects of this are repeatable?

And, and what aspects of this, you know, are we gonna scale further?

And there's this Christoph Janz has this really great blog post online about the 5 ways to build a $100 million company.

And he talks about, he can have 1,000 customers buy a product that costs $100,000.

Or he can have 10,000 customers buy a product that costs $10,000.

Or you can have 100,000 customers buy a product that costs $1,000.

And even though you don't need to know on day 1 which bucket you're going to fall into, most companies do fall into 1 of these buckets.

And so, you start thinking about that as you're doing this.

If, if you want to be in the elephant category of a $100,000 product that's great and you're going to have a really high touch sales cycle and that's fine.

You know, that's sales force, that's work day, that's great.

But if you think you're going to be a rabbit and sell products for $1,000 a year to businesses, and your sales process involves flying out to see them 3 times and 8 demos and, and, you know, 3 months of redlining.

Then you probably have to rethink something.

And so I see a lot of startups most commonly in that, who want to be the rabbits and sell for a, a low priced product to businesses not thinking about how to do it in a scalable way.

And that's 1 area where you can get underwater, or it just forces you to increase your prices.

So this is how I think about different businesses and it'll be helpful for you when you get started and once you've done enough for the sales to say, okay, you know, where am I?

And the corollary to that is, is how do I have to price my product to be a viable business?

So that is, those are some of the things that I figured out along the way building building sales now at a few, at a few different companies.

And specifically on this very narrow stage of, of 0 to 1 million.

After you get to 1 million, you'll find there's a million blog posts, you know, about how to get from 5 million to 50 million, or 10 million to 100 million.

But this 0 to 1 step I wanted to focus the presentation on that today because there's not as much written about it and It is something that I think is very opaque to a lot of founders.

I figured this out just by doing it, and I'm confident that if you're starting a company, you can too.

If for whatever reason you would like to do what I did and join a startup that's figured it out and, and, and hone your skills and hone your craft.

We are hiring at Clever, so that's an option.

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Sales and Marketing + How to Talk to Investors with Tyler Bosmeny and YC Partners (HtSaS 2014: 19)