Steli Efti has helped hundreds of venture backed startups (like Foursquare and General Assembly) scale their sales efforts. It’s impossible to sum-up this incredible episode in one sentence. I’ll just say if you want to sell more, watch and learn.
→ He helped hundreds of venture-backed startups scale sales efforts
→ How a startup can put together a sales process and the way he sees it
→ How many companies grow through sales and act like their blog matters
→ What’s the role of the founder in the sales process
→ His advice to people who do a startup and immerse themself in that world very quickly
→ What kind of experiments does he run at first and what does this roadmap look like
→ The most important thing is to learn about the leads from that early process
→ And a whole lot more
Bronson: Welcome to another episode of Growth Hacker TV. I’m Bronson Taylor and today I have Stanley with us. Stanley, thanks for coming on the program.
Steli: Hey, thanks for having me.
Bronson: Yeah, absolutely. Let me tell people a little bit about you. You are the CEO and co-founder of Closed IO, and we’ll talk about that at the end a little bit. Also, you’re the CEO and co-founder of Elastic Cells, where you’ve helped hundreds of venture backed startups, people like Foursquare, General Assembly, you know, household names. You’ve helped them scale their sales efforts. You’re the startup cells guru, I think. Is that fair.
Steli: To some people? Call me that.
Bronson: Yeah. Yeah. Yeah. Your name has come out more than once. Whatever sells is talked about. And, you know, in these circles, certainly the name just kind of pops up. So people have heard your lectures. They’ve, you know, read your stuff, they use your products. I think you’re the guy for startup cells. So let’s dig in to startup cells. Let’s start right there. Let’s do startups and selling first. The question I have is, do startups actually grow through cells? Because when I think about cells, you know, I think about these, you know, Fortune 500 companies. I think about, you know, I don’t know, just these guys sitting around in a phone room, just, you know, old school, 1980s, you know, hammered out. And, you know, all the hype right now is around content marketing, pay per click, digital marketing. So sales isn’t even in the discussion for a lot of founders, I don’t think. So do startups actually grow through cells?
Steli: Fuck yeah. Well, first of all, I forgot to ask you if it’s okay for me to to curse on the show. You can do whatever you want. All right. Right on. So. Absolutely. Yeah, absolutely. So I think there’s two distinctions. Number one, I think on a philosophical level, as an entrepreneur, you’re always sell it, right? First of all, you have to sell yourself on your idea. Then you have to start selling others to join your company and buy into your vision. You have to sell investors to invest money. You have to sell the press to write about you and find you interesting. You have to sell constantly. You might not think of it as selling. You might not be putting on a suit and tie and be like drinking coffee out of a cup and be like, I’m a sales guy, but you’re always in the business of influencing others, hopefully positively in buying into your vision mission and transacting with you in one way or another and helping you accomplish what you want. So from that perspective, any founder in any area, anywhere is always selling in one way or another if you’re conscious or aware of it or not. I think more tactically, this is true for B2B startups. So, you know, of course, if you you know, if you’re building online games and your your growth is building virality and things like that, you might not be picking up the phone and closing deals all day long, although you might have to make money eventually and sell advertisements. But that’s a different story. But there are certain things that are very kind of consumer focused, and you might not need a sales force or thinking about sales at the early days. But if you’re B2B, if you sell your technology, your software to other businesses, you have to master the sales game from day one because that’s how you’re going to be acquiring lots of your customers in most cases.
Bronson: Yes. I mean, let’s dig into that. I mean, because even B2B startups, it may not be on the radar as fully as it should be. Are you saying that if you’re in a B2B startup, you should be thinking about sales on day one and you have to figure out how to do it?
Steli: Yeah, absolutely. And you know, the other thing that I want to say is don’t be afraid of it and don’t be intimidated. And sales might not be what you think it is. Right. So as you said, I think sales is not the most glamorous, you know, job or activity in the world and for good reason. Like there there have been a lot of abuses in that area. There’s a certain kind of kind of image. You know, I always like to use the Wolf of Wall Street as a mental model of like, is this the type of person I have to be to be successful in sales? And the answer is absolutely no. I don’t know, maybe the financial industry on Wall Street or somewhere else. But when it comes to startups, you can’t just be out there with a mindset of like killing your customers, right? And like dominating them into submission and buying whatever. And then you, you know, you become rich and you leave your customers empty handed. It doesn’t work. You need to make your customers successful. You need to create value because otherwise you’re not going to survive. You’re so tiny and there’s no hill to run to towards do so. So the the thing that I hear myself, the kind of advice that I hear myself give a lot, especially to like engineering driven startup teams and people that are very technical is that sales is not complicated and you don’t have to be super outgoing or super communicative or anything like that to to be really effective in sales. Sales is really nothing else than, you know, result driven communication. It’s about communicating in a way that’s effective that leads to a certain outcome. And I always tell people it doesn’t even matter. If you got a yes or a no, both are actually good. Both are clear results that you can learn from and move on to. The thing that’s killing start ups is the maybes. It’s the unclear. We’re not sure they kind of like it, but they haven’t yet made a move and we’re going to wait and pray for something to happen and always unclear about the outcome. That’s what’s killing companies and startups, not people told us a clear no. So. So sales in its core is nothing other than communicating with people and driving them to a certain result. Either they tell you yes or no. And that’s really simple to do if you can overcome your fears. So it’s not rocket science, but it’s something that’s absolutely crucial to any stock.
Bronson: Know that right there is already the the quote of the episode results driven communication. You know, that’s it. I mean that sums up sell so well. And in a minute, we’re going to talk about, you know, how a startup can actually put together a sales process and the way you see it. But first, you know, give us some examples. What are some startups that just have been killing it with sales that do it right? You know.
Steli: So it’s always I can tell you what you know, I can tell you in most examples, it’s things I hear from investors, things I hear from other employees.
Bronson: Fine. So just what are appetite? Give us something that’s so.
Steli: So one company. There’s a bunch of them. So one that’s very, very much written about and hyped about recently. The press is Zenefits, for instance, kind of being being coined one of the fastest growing SaaS companies and having, you know, they grew I don’t know the numbers, but they grew in incredible numbers very fast. And David Sacks, who sold Yammer and was ex PayPal guy was up, you know I don’t know of a billionaire but multimillionaire, really successful investors joined as CEO just recently. That was a big coup. And they grew they grew massively through sales and through building a really world class sales organization. That’s just one example. There’s most companies that are in B2B, if they’re really successful, growing really fast. Usually there’s a sales force behind it. There are exceptions to to that rule. But they are so hard. They’re just so, so such few cases where you could think of in B2B a company becoming massively successful without being greeted sales.
Bronson: Okay. Because everybody hearing this they don’t want to do sell. So they’re going to say I’m the exception like I’m that one company that wants to do it right.
Steli: So of course so too.
Bronson: It’s like, who is that exception? So that way everybody’s knows they’re not it, you know. I mean.
Steli: Exactly. So that’s a really good point. So two things to that. Number one, the only exception that I can think of, and it’s not even clear B2B companies, but like think of Dropbox, right? Dropbox is a B2C company, but they’re also really successful in the enterprise and in business that companies are just unstoppable because the product is is just the core one where but once you start really using it, there’s no turning back, right? You just like it’s like crack.
Bronson: It should be get out of the operating system like. Yes, exactly. Build something that just should have been there at the beginning. Yeah.
Steli: But but you know, it’s funny that we and I didn’t plan to say this, but we mentioned Zenefits and David Techs from Yemen joining. That’s relevant because a lot of times people tell me, yes, we’re in B2B, but we’re not going to need sales as much because we’re going to follow the Yammer model because Yammer had this like there was this myth of Yammer that was a strategy at the beginning was to say, we’re going to grow in the enterprise from the bottom up. We’re going to have all these users for free sign up, and then we’re going to knock on the door from the Enterprise and tell them, Hey, guys, look, you have 30,000 of your employees already on our platform. If you want control over that, pay us money. And in most cases, we’re not going to even have to knock on any doors. The Enterprise will come to us and ask us for permission to pay us money to get control over what’s going on. That was what Yammer was kind of promoting as their strategy for viral growth in the enterprise. And that idea is so compelling that founders still to this day believe that that’s a viable way to grow. Right. That was sold for over $1,000,000,000. Must have been successful. You know, if you actually pay attention and you hear David Sacks in recent interviews, he tells he’s told in a couple of stages, I think TechCrunch Disrupt or some of the big events. He himself said that that model never worked and was one of the most surprising things that after a while they figured out they have to build a salesforce and they have to go in to the enterprise just like any other company. Yes, they had a better product that was more successful in penetrating the end users, but they still had to sell it. And that was something that, you know, the myth is so strong and compelling that people have noticed that it never actually worked.
Bronson: Yeah, you know, I have a hunch even and you know, David doesn’t fall in this category, but that the companies that do grow through sales, they don’t necessarily tell you that’s how they grew, because it’s so unglamorous and it feels like they cheated. It feels like, oh, we just went directly to them and made them buy it. Like it feels like they come to us. They didn’t just spread it word of mouth, it didn’t go viral. And so I wonder how many companies grow through sells and then act like for their blog matters, you know?
Steli: Yeah, yeah. I mean, and not to say that nothing else matters, but. Sales. I mean, even Eric Eden, Jessica Livingston from Y Combinator, one of the founders from partners there, she wrote a blog post where she wrote that what is more important for startup sales are marketing. And she clearly said sales. And this is surprising. None of the partners that I see are salespeople. Right? They are highly product people. Product people. Right. So you wouldn’t think of why see partners telling you that sales is important, but it is. It’s one of these things that’s not glamorous, it’s not sexy, it’s not push this button and that button will architect some viral coefficient and then see things exploded. Just lean back in your office and know it’s the the grind going out there, calling people, showing up at people’s offices, actually doing the work that’s not glamorous. That makes the.
Bronson: Difference. Yeah. No, that’s awesome. All right. So here’s one of the big questions I have. We’re going to dig into how to set up sales in a startup and that kind of stuff in a second. That’s the big teaser because that’s a I wants to like, okay, what do we do? You know? Yeah, but the question that I think to answer first is the question of the founder. How much should the founder be involved in the sales process? Because I go back and forth personally, there’s a part of me that says, I used to be right in the middle of it, at least at first, so I can learn, so I can, you know, get in front of my customers, learn what they’re actually saying, and not get it second hand, learn how to actually close the deal and what objections I need to overcome. There’s another part of me that says, I’m the founder. I got to get out of the system. I got to be the one working on the machine. And any time I’m in the machine, I’m doing it wrong. So how do you see it? What’s the role of the founder in the sales process?
Steli: That’s such an excellent point. I’m so happy you bring this up. So my point of view on this is that in the early days, you have to be fully immersed and fully involved. There is no such thing as second hand insights and there is no such thing as outsourcing sales in the early days. Right. So the crucial part here is not to perfect the sales process and to drive that tiny little percent, one digit percentage efficiencies in the sales model. That’s not the point of this. But the point of it is that in the early days, you need to figure out who your customer is, what he or she needs, what they care about, what objections they have. You need to listen and look the customer in the eyes while they’re telling you this. You need to preferably be in their natural habitat, in their office or building to see what other things affect their decisions, what what the workday looks like, the workplace looks like the desktop of the software that they using looks like to really get insights. That’s the important thing to understand. Who is my customer? How do I reach them? How do I find them? How do I fulfill their needs? How do I make them successful? What kind of language do I need to use? What kind of obstacles do I have to overcome? That’s those insights you can’t outsource. You can’t give that task to somebody else. Once you have those and you’ve you’ve been able to actually drive some kind of positive results in a repeatable fashion. Right. So you’ve figured out a little bit how to do the sales thing, and you can do it one month and you can do the same activity and it creates sort of the same results the next month. That’s a good point to start bringing in more people in the company, you know, kind of taking off the the the, you know, the workload of your shoulders. And then eventually you want to hire some experts to take what you’ve built and perfect it and improve it and fine tune it.
Bronson: But optimize.
Steli: Yes, that’s when you optimize, right. But in the early days, it’s deadly to try to push off the task of sales to somebody else. They’re not going to have the insights you have as a founder. They’re not going to have the learnings you have as a founder. And that loss of data could mean the difference between a successful company and a failure.
Bronson: Yeah. So sales does need to become a system. It does need to become a process. It does need to become a machine, not on day one. You need to figure out the not the local maximum, but the maximal maximum, what thing just works, period. And then we’ll optimize it with the experts, you know, in the future. Okay. So the way you’re describing it, it sounds like that sells actually doubles as customer development or product research. I mean, I can’t really the line is so blurred. I don’t really know which it is. I mean, is that right?
Steli: I mean, I think through the early days, a lot of lines are blurred in startups. Right? It’s not. They should, right? They should because you don’t want to hire 100 people for all little tasks. We got three.
Bronson: People doing everything.
Steli: To do everything right. So so of course, sales at its core, as I said, is about driving a result. And the most important result for you doing this is to turn people into customers. Right. And then turning these customers into successful customers is also a really crucial thing. Lots of companies forget that they sell to customers and sell and sell and sell and then they struggle. And you ask them, Hey, how many of your customers are truly, insanely successful with your solution? And they look at you with a blank stare and they’re like, I don’t know, I never cared about that. So that’s definitely also also crucial. Yeah. The line between support success. Sales Customer. Development, product development. And it doesn’t matter. Right. It doesn’t really matter. The core thing is to drive real results. Yes or no outcomes in the early days through your activities and not be stuck in that middle end of people really like what we building. People gave us thumbs up. Like people will think about it if we have this this feature, like that world that lets your dream stay alive without actually manifesting that in reality. That’s a really dangerous place to stay in too long. Yeah. So. So I do think that the lines are, but I think that’s fine. And I think that in the early days, too, to come back to the point you made earlier. In the early days, it’s just like with product development and MVP, you need to think of sales not as something you set up perfectly on day one and then it just runs. You need to be okay with the idea that this is going to be a constantly evolving system and you want to start as simple as possible. It doesn’t have to be perfect. Just get started and then improve. And you will never stop tweaking and improving as you grow and as you enter different stages of the the company.
Bronson: Yeah. Now that’s awesome. You know, I noticed online that you give away office hours and knowing that you’re a sales guru and I see that you give away office hours. You know, I put two, two together, I think. Is this still his way to kind of stay in the process, stay in touch with the customer, see what the new objections are? Is that what you use your office hours as, just to stay in touch with sales?
Steli: It’s it’s more than just that. So so office sales has morphed into this thing that has a lot of benefits. And I’m sure there’s much more karmic benefits that I don’t get to see immediately. At least I, at least I like to operate and think that way. But. But the clear benefits that I see immediately are that we started as office hours, as something to help our customers to be more successful, because we knew if we make our customers more successful in sales, will buy more of our software and they’ll stay around longer. And it’s just going to benefit us as well. Sure. And then we thought, why just limit this to our customers? Anyone out there that needs to be better at sales is somebody we want to help. And we know if we help them, they’ll check out our software, the checkout, the other things that we have out there. And eventually many of them will become customers because we’re really good stuff. So today, office hours are a way for us to get customers. It’s a way for us to build goodwill and thought leadership. It’s a really great way to get content ideas. So a lot of the concepts that I have, a lot of the things we write about on our blog and the things we teach and we just published a book. All those many of these ideas come through interactions in office hours where somebody poses a challenge and we come together up with a solution and then we think, Wow, this could be useful for other people. Since we now see that that problem was solved, that the company comes back and tells us about all the great results they’ve seen. Yeah. So it has its marketing, its sales, its thought leadership. It’s being a good citizen on this planet. It’s all all of the above.
Bronson: Isn’t it funny how when you just connect with customers? It does so much good in so many ways. I mean, there’s just there’s no way to not do that.
Steli: Yeah. There’s just so much, you know, and I’ve given this advice to many people. Like once when you do a start up and you immerse yourself in that world very quickly, after a while, you become an expert in a very small niche area of the world, and that’s really valuable. And you can use that. And in our case, you know, when we launched wholesale, we looked at the sales software market, CRM market, and we knew it’s so crowded we’re not going to outspend our competitors with bigger ad budgets or anything like that, or we want to build viral little gimmicks to grow faster than others. But we knew we knew more about sales and startup sales in particular than anybody else in the space. So we thought instead of outspending, our competitors will out, teach them. So that was kind of core. Part of our marketing strategy from day one is let’s just teach what we know that’s going to make us stand out.
Bronson: Yeah. No, that’s great. All right. So let’s say you walked into a startup, right? They hired you as a consultant or whatever. You’re one of the early employees to do sales. You’ve joined the startup for some reason. They’re a B2B startup. They need sell. So let’s just assume they’re not, you know, consumer facing. Let’s get a million downloads kind of startup. Where do you start? Give us some tactics. I know you said results driven communication. What kinds of communication are we talking about? What kinds of experiments would you run at first? I mean, just give us an idea of what does this roadmap look like? So somebody watching this interview can go actually try something before the day is over. You know what I mean?
Steli: Right. So so one of the first things I would ask is, do we have any customers? Do we have even one customer? If you don’t have any customers, that needs to be our goal. The first two milestones that I would set is the first paying customer. Mm hmm. Then the 10th paying customer. And then getting. Seeing how many of those ten customers can we make insanely successful and successful to the degree where if we called them, they could tell us they’re getting significantly more value out of the software product than they are paying us for it. And not just I like this. I’m a champion. I like. The idea. But no, I’m actually we are getting more money value out of this than we are paying for it. Those would be the first milestones that I would set in the sales horizon. And the way that I would do that is very simple. The earliest you have to do whatever it takes and you have to make your life as easy as possible. So I would look at my immediate network, right? Who do we know that could buy? Who do we know? Who might know? Somebody that could buy it, right? Investors, advisors, friends, ex-colleagues, ex employers, your your school, whatever. Your neighborhood, anything and everything. Your parents life, anyone is fair game. You need to make your life as easy as possible and find the easiest route to get to a few customers, even if that route is not scalable.
Bronson: Open because that’s the that’s the barriers that but it’s not scalable if I don’t you know but it doesn’t need to be.
Steli: Fucking MEST matter now right now all you’re trying to do is figure out have we build something or are we trying to build something that anyone cares about? Would somebody care about it so much that they actually want to pay for it? And then can we actually deliver the success we’re promising? If you continue these things out with one or two or three or five customers, you’ll find ways that scale later on. Don’t worry about that. Okay. At the beginning, your life is hard enough by being tiny. Nobody knows you having something. It’s not quite ready yet. Don’t make your life even harder about trying to set up something scalable from day one. Just go and do go for the easy and low hanging sails. All right? Like, hey, I like it. So. So you do that once you do that, and that’s hard enough. That means you call people, you drive to their homes or offices. You have to be out there outside your office, right outside your comfort zone, and actually going for a result, not just do you like the idea, but are you ready and willing to buy? Once you got that down, what? When a startup tells us, yeah, we have a few paying customers yet the next thing I would do, my next step is get referrals. And this is something every company gets wrong. You know, you think of most companies think of referrals as this nice to have thing they may or may not mention. And usually it goes something like this. Hey, you bought now from us. This is exciting. Do you know anyone else that would might want to buy it? Nine out of ten times a customer will go, let me think about it. I’ll come back to you later. And then people go, okay, cool.
Bronson: So what should I do? Because that’s what I do. So what’s the right?
Steli: So what should you do? Here’s my pitch to you. Once you ask somebody for referral and they tell you and you should ask the moment they become a customer and they tell you, let me think about this. You say, Great. I’m sure that over the time you’ll think of many, many people down the line as we as our partnership grows. Let’s start with one day, one person you really like in this industry. That should be a where we exist. Come on, you. What you do is you push one more time. You do it in a nice fashion, but you push one more time. It’s an uncomfortable place to go. Most companies and people don’t want to do that, especially not after they convince somebody to buy the.
Bronson: Way they want to go away. The relieved.
Steli: Yeah, they’re like, I just created a win. I don’t want to risk that by annoying somebody. Well, you’re only going to create outcomes. Others don’t if you go where others won’t. Right? So you have to push yourself outside your comfort zone, do it in a nice way, but push one more time and go and tell somebody, Come on, just one name. Let’s do this. I in my experience, if you push people just one more time out of the nine, they told you they need to think about it. Four or five will actually just give you a name just by the mere fact that you push them the other four or five. They will just tell you, Hey, dude, back off and then nice or not so nice, wait, and then just put your hands on the air and go, fair enough. I wouldn’t do my job if I didn’t ask for one more time. Right. I’m looking forward to you connecting us whenever you think of somebody. I appreciate it and you just leave them. All right. Here’s what happens next. You actually make them refer you immediately. You, in an ideal world, you want to have a template for this. You don’t want to create any work for the person that wants to refer you. You send the the template and you tell them they can edit it. They can use it as verbatim or they can write something of their own. Now, the next step is once you get a referral, you talk to somebody that came from a referral and you actually convinced them to buy. You converted them to a customer. The moment they become a customer, you have to close the feedback loop. You have to tell them, you know what? Isn’t it awesome that we’re going to be working to those getting all that value? Who is responsible for all this awesome stuff that’s about to happen? MM Well, I don’t know, you know, who connected us in the first place. Oh, Bob. Yes? Can you do me a favor? Can you take one minute right now and I’ll do the same and send Bob a quick thank you email. Mhm. And here’s what happens the moment the initial referrer gets feedback that it actually was a valuable connection built immediately. Think of more people to connect you to and referring to.
Bronson: And then do you ask the referred person to then give you a referral also. Yeah.
Steli: Was going keep it going while you’re at it. And you know what, in some cases you can make it part of the deal. You can tell people, hey, let’s first explore it, this is a good fit and once you export it is a good fit. You could tell them, Listen, before I let you buy, I want to give you a fair warning right now. We’re really small and we’re dedicating all our energy in building the best product and servicing our customers in incredible ways. That means we do no PR, no marketing, no nothing. We can only afford that if our happy and successful customers refer us to other businesses. Does that sound like a fair deal? Nobody ever says no. I want you spend all your time on marketing and PR and sales and not on servicing me and building amazing products from nobody. So you make it part of the deal. Part of what they’re buying into is not just the product, but also promising you that they’re going to connect you with others if you actually do a great job for them. Yeah. The early this is this is not inbound sales. This is about this is very much connecting with companies and people that haven’t thought about you, haven’t searched for you and don’t care about you the moment the connection happens. But it’s the warmest way about. And this is how you should start. Mm hmm. Once you’ve done that a little bit, and that works. Now you want to start looking at other ways to grow. Right? And you can look at marketing and spending money on advertising and on inbound blog content on on cold calling. Cool emails is a variety of things you can do and you can like look at the depending on who your customers, depending on how they typically buy. You can see how did other successful companies sell to these types of customers to see what are available channels for growth for us in sales. And then you pick the ones typically I would recommend you the ones that seem the easiest or we have the most talent already internally on the team and you go after you start experimenting, trying things and, and growing your sales process, but you always start simple. Your immediate network, you get a few customers, you get referrals from those customers. Once that ball is rolling, now you can think of bigger, better things to do. Yeah.
Bronson: There’s the big systemize process. Does it is it just a bigger version of what you were doing on a small scale or is this a totally different animal? You know what I mean? Like, does the small thing grow into the big thing or is it just a new stage now?
Steli: It usually is a little bit of both, right? So the lines are always a little blurred, but but at its essence, all you do in sales is you look at leads like who is our customer? How do we get people like that? Either to find them, to talk to them proactively, or to find them where they are looking for people, for companies like us or solutions like us, and present ourselves in front of them. And it’s like, how do we generate leads? Right? That’s the core, the most important thing. Once you know that, then it’s about how do we now that we have those leads, how do we effectively communicate with them to convert them into cash?
Bronson: So all the hustle we did at the low scale of just going out to your friends and network and that kind of thing, go into the referrals, all that that’s just teaching you who your customers really are. And then you’re using that information to think, Okay, where do these customers live? Where do I find these leads? And so even though the small thing may not become the big thing, it educated you about where to find the big thing. Is that right?
Steli: That’s absolutely right. And in the process, it generates results. So startups live in this tough space where you want to build things that will really grow the long term. But you also have to drive some short term results to build momentum. You can’t just be like, We’re going to work on this perfect model. Don’t worry, we’re not going to assume customer for two years. But then we’re going to just push this button and it’s going to explode, right? You still you have certain pressures. You have to have customers revenue, show investors progress, whatever it is. So you have to make these choices between generating results in the here and now, while the same time learning what’s necessarily important to grow into your next stage. Yeah, and nothing is better than talking to your customers and really intimately learning about them. And you don’t know who your customers are until people pay you money and until they tell you that it was worth it to pay you that money. Right. Once you have those two things, you know now who your real customers, people tell you they like it and they would meet it. That’s not customers and people even paying you money because they buy into the promise of your service, but they’re not getting any value out of it. That’s not your customers either. So you have to really figure that out. Once you figure that out, everything else is much easier.
Bronson: So if one of the most important things is to learn about the leads from that early process so that you can go and find a bunch of them and create a scalable process. How important is it to have the right leads at the top of that funnel? It seems like if that was the main thing you got out of it, they need to be the right leads. So how important are leads? And then second, what what are some of the symptoms that the leads are wrong? Maybe. How can we know that are we’re going after the wrong people here? Even we thought we had the right leads.
Steli: Yeah, it’s an excellent question. So most people, when they think about sales, they want to optimize the the end of the funnel. They want to optimize the sales scripts and the pitch and the demo and the negotiation and the whatever. They want to negotiate this on TV.
Bronson: Right? Right. Yeah.
Steli: And it’s and it’s it it’s the sales skill, right? It’s the how do we talk to the customer? How do we negotiate with them? How do we close the why would it not closing more but it’s the the to optimize at the end of the funnel typically is waste of time at the beginning like that’s those are the things that will drive. Slight improvements, but in most cases, even in most cases, the thing that will make you the successful or not is the quality and quantity of your leads and how those leads are growing. Right. If you have amazing leads and they are growing in great percentages month over month, even if you are pretty bad at sales, you’re going to do okay. If you have if you have no leads or very solid leads, you can have the best sales team in the universe and you’re going to be fucked because there’s nothing to sell to. There’s nobody to sell to. So it doesn’t matter how good you are selling. So leads come before sales skills, sales process. It’s really the lifeblood of your success. So it’s really important to and that’s why it’s important to understand your customer, because your customer will determine who your leads are and where to get them. Excuse me. So these are super crucial. Now, when it comes to the like symptoms in terms of, oh, how do we know that we have a problem with our leads are really bad? Well, you know, there’s a couple of things that you can do. Typically, if we want to do, let’s do a really simple funnel together, right? So let’s say we have 100 leads. You know, let’s even see they’re coming to us right there. Inbound leads, sign ups every month. So a simple three step funnel might be 100 leads. We’re reaching out to them. Let’s say we call all of them. And then what is the actual rate at which we’re able to make a connection? Talk to somebody of those leads. So that’s the retreat. How many of those that we reach can we qualify? Like once we talk to somebody, like how many of these people we’re selling a sales tool, how many of these people are clearly not in the market for sales to have maybe confused what we are are looking for something we can’t provide either a stage. Maybe it’s Fortune 500 companies that need something for tens of thousands of employees that we’ve built something for tiny SMB companies like how many of those people are clearly not going to be able to buy today and get success from it? Right. So what’s the qualifying rate? And then out of the ones that leads that are fully qualified, how many can we close? Mm hmm. So when we look at that, those steps, if you have a very bad reach rate, that’s a problem. If you have 100 sign ups that give you phone numbers and then when you call all of them, you can even, like, have a conversation with one out of 100. You have a problem. Right? And there’s a it’s a data. Maybe it’s a data problem. Maybe they’ll give you wrong numbers. Maybe it’s a process problem. You’re not calling the right time. Maybe these are all bad or bots or something, but it’s not normal. Like even in bad cases you’ll have a ten 15% retreat, even if you do outbound cold calling. So the inbound leads, if you can’t reach any of them, knows that’s a problem. Right? You need to figure out what, what, why, what’s going on here, why we having such such issues. Once you talk to them, if you qualify a very low rate of the leads that are coming to you, that’s a quality problem. Right. So if I if I get 100 leads and only 1% of them or 5% of them are qualified to buy, I’m fucked. I’m actually only getting five leads a month, not 100. Right. So. So now I need to think about where. Why are these people coming to me? They clearly should. Is my marketing wrong? Is my messaging wrong? Am I spending advertising dollars on the wrong things or writing about the wrong things that have the wrong content strategy? Am I promoting my product somewhere that’s not good? Like where is this source of low quality leads? People coming to me signing up for the product. They can never, ever have any chance of success with it. Yeah. So quality qualifying rate, reach rate you would want on the inbound side, you would want to retreat to be 15, 20, 30% something along those lines. You know, the qualifying rate it should be in the perfect world should be 50%, right? Maybe it’s just three, right? That’s fine. But if it’s like single digit, you have a problem.
Steli: And then once you look at the qualified leads and qualified opportunities, you should have a high closing rate, right? If, if you if you can only close 5% of your highly qualified leads, that means you don’t have a good sales process. You know, you’re not good at selling. Yeah, that’s the way of breaking it down. So typically, if you can’t really talk to them, communicate with them, reach them. And if once you communicate it or reach them, it turns out that all of them have the wrong idea about your product or are not capable of getting value out of it. Currently, then you have a quality.
Bronson: Quality issue. Yeah. No, it makes total sense that that definitely answers the question. All right. So, you know, we have these leads reaching out to them. Some people don’t respond. Some people respond with maybes. How important is the follow up? Because a lot of times it’s easy just to kind of let it be. You did your thing, you sent the email, you made the call. Let’s just, you know, let sleeping baby sleep, you know. So tell me about the follow up.
Steli: So it’s a great question. So I’ll I’ll give you two answers. One on a more again. Philosophical point of this is not just fallout for business B2B leads. This is follow up for life for anything you do. I have a simple philosophy when it comes to full up. I never, ever, ever stop until I get a result. Right. I’m very binary. Yes. No is all good. But if I don’t hear back, if I had a positive interaction. Right. This is important. Not if I could email you right now if you’ve never heard from me, but if we actually talk and you say, and this sounds interesting, send me an email, I send you an email and you don’t reply to me. I will follow up indefinitely. And also and here’s the here’s the simple reason most people will stop following up and they will come up with make up a story. Why the other person stop responding to them all? They don’t want this anymore. They don’t like me. They like my shoes, my hair. They think we’re stupid or they’ll make up some story in their mind. And because they don’t want to, they feel rejected now and they don’t want to be annoying. They just stop communicating. Yeah. I’m not in the mind reading business and my assumption, my baseline assumption, all of this is people are busy and I’m not the most important thing in the universe. So I’ll keep following up until I find the right timing where they actually have time to respond and they can at any time tell me to fuck off and stop emailing. That’s the.
Bronson: Result. So now you’re done.
Steli: So I’m cool. I’m cool with that. I’ll leave you alone. Right. But if you if you talk to me and now you ignore me, you’re not replying, I’m not going to make up a story. Why? And feel rejected and I’m going to keep pulling up. I tell the story all the time when we follow up. In the early days when we were raising a seed round with one billionaire investor that that, you know, I had to follow up over 40 times to get a reply. And this was somebody that was introduced to me from another investor. He initially replied and said, Yes, I want to meet up with you guys. I said, Awesome, Tuesday, Thursday, this or that time. What works in here from him, huh? Pull up again. Here, pull up again. And I brought more than 40 follow ups. You know what his reply was? Hey, Selly, thank you so much for following up and following through on this. I had a big Chris had to leave the country. There were some big things going on. Can you show up tomorrow 1 p.m. in the office and check.
Bronson: If you made up a story of would be. He thought about it and didn’t like you guys after he slept on it. The reality was very different.
Steli: Very different. And you know, I tell this story every single day and at this point I’ve caught this so many times that almost every day I get somebody emailing me, tell me still he followed your follow up advice and I just closed the deal after the 23rd follow up. Look, here’s the reply. The person was like, Thanks for following up with a big change. It not just people just say, Hey, I got busy with something else. Yeah. Hey, thanks for pulling up. And then some people tell me, but what if somebody is really angry and annoyed at you? Well, listen, I’m not in the you know, being popular and being popular is nice. And I want to be as loved as anybody else wants to be loved. But that’s not my core focus in life. I’d rather have three new customers that love me and seven people be annoyed by me than having ten people that are equally to me, equally indifferent about me. I don’t care, right? I need to optimize for wins and not optimize to not lose and not annoy someone. So once in a while somebody is annoyed, so be it. But honestly, following this strategy for many years now, I’ve never had somebody tell me, no, that’s not interesting. Like after a number of follow up, but nobody ever got really angry at this because they know they could have replied at any point, telling me what the deal is. The important thing is don’t be needy. Don’t tell people why you reply. I get this once in a while somebody sends me an email and then 3 hours later they send me a complaint email that I have a reply. Yep. Wow. This is the surest way for me to not want to do business with you, right? Yeah. Just, you know, my 40 to 40 emails, you know what my email was? The follow up email was, Hey, another beautiful day in paradise. Here’s some recent press about our company. Can you do this? Because they want you to fill.
Bronson: In confidence and momentum and just like it was the first interaction.
Steli: Just like it was the first email. I don’t want to make you feel bad that you haven’t replied to me. I don’t want to seem needy, clean cut, short, simple. It works. It’s a very, very powerful. If you only take this away from the interview, you’ll you’ll get results, investment money, customers that you never think possible. That is awesome. It’s full of when others don’t.
Bronson: That is awesome. All right. Let’s talk about clothes that I oh, you’re so in the sales business that you literally created the product. You created the software as a service, sells product to keep track of all these things we’ve been talking about, to keep track of the leads, to keep track of the follow up, to keep track of who talked to who and what they say and how they say it. But I want to hear from you what is closed out.
Steli: I know that’s a great question. So we started the business is elastic sales. And elastic sales was an outsourced service to help startups develop a sales model and scale that sales model. And in the process we work with over. Hundred venture backed startups in Silicon Valley. We were kind of they’re their secret sales team, right? And we built this massive amount of salespeople, sales operations, doing sales for all these different companies. From day one, we knew that we wanted to scale this with software, and we hated the serums that were out there, just selfishly didn’t like any of that software, didn’t want to use it for hours and hours every day. So we thought, let’s build something for ourselves as a secret sauce to outperform and outcompete everybody out there. That’s how we started building out. And then eventually the software got so good that we got it got outside demand. Our customers wanted to buy the software, not just the services. And eventually the software grew so fast that we decided fully focus on it. And that’s what we’re doing today. Close Out is is really based on a few simple premises. Number one. Sales. Sales at its core is communication, right? I said results driven communication. So as a result of that, if we believe that sales at its course, communication sales software needs to be communication software. So we build a CRM that has communication at its core. So in close all you can call and make calls or receive calls right out of the app. When you see a lead, you click the phone number, it calls it in the system, it automatically records it. Everything is tracked.
Bronson: Now, let’s make sure we know what you mean by that, because I think people assume you mean, oh, it you know, it opens up Skype or opens up Google Hangouts calls within the software. So it’s tracking all the stuff about the call without having to, you know, pull it in from some API or something. It’s in there.
Steli: Exactly that we give you. We assign your phone number and whatever region you want around the world. Internationally, if you click somebody and you, the calling system is within the software with all VoIP system within the software, right? So you can make and receive calls and you all email communications automatically tracked any email you send or receive of ever send or receive with a prospect. The moment a lead is in, close out, the history is automatically displayed in a nice timely view and all future communication email automatically track. You don’t have to do this manually. You don’t have to be scrambled, do any crazy things like that. You set up the system and the software takes care of everything else.
Bronson: So you’re trying to minimize data entry. I mean, that was part of it, right?
Steli: Those are the two things. And we wanted you to be better at communicating, communicate more, communicate better. And then secondly, we wanted to eliminate manual data entry because it both sucks. And salespeople and I speak as a salesperson myself, I suck at it as a as a as a result of what right doing. Hey, we’ve seen so many CRM systems, and if you look at the data, you go, Holy fuck, what is this? Right? Because people find all these shortcuts and then when they leave the company, the next person that’s taking over has no idea with all this trash data it is. So we knew we didn’t want humans to do manual data entry, and that’s not the salesperson’s job the salesperson should be to go out and close deals to make sales. Not feeding a database with information software should do that. So we built a system that was focused on communication that eliminated manual data entry as a as a result and powered salespeople to do their job better. Yeah, and that’s really what, what tools is at its core.
Bronson: And I would encourage people to go to the closed IO website, closed on IO and watch the video, watch the intro video that walks you through it, especially if you’re an Arrested Development fan. I watched it and I was like, Oh, this is awesome. I’m such a Arrested Development nerd, so I enjoyed the video. So go to close that. I go check out the video because it’s actually impressive. I mean, you’re watching it and you think, ah, it’s, it’s sell software. Like, I’m not going to be inspired when this is over. And then all of a sudden I’m like, you know, a couple minutes into watching somebody show me how do you sell software? And I’m like, all right, I only keep watching. This is like it’s doing things I didn’t expect it to be able to do. So it really is cool software. It’s on my to do list to look into it further and maybe even start using it. Because, yeah, what I’m using right now, I’m not going to tell you it’s a joke. So. All right.
Steli: That’s awesome to hear.
Bronson: Yeah, yeah, for sure. And it’s reasonably priced. I mean, it’s, you know, small, medium business. They can afford it. It’s not some crazy sales force trying to take all my, you know, money, I think. All right. Tell me, how have you used cells to grow close? IO, I you know, I have to ask that question because I want to see that using this stuff that you’re doing, the thing that you’re preaching. Because if you’re using it, you know, I’ve got red flags. How are you using cells?
Steli: Ah, well, it’s very it’s a the core of everything we do now with calls IO we actually at this point are fully focused on inbound sales, right? So what that means is we have a fairly successful content strategy. We teach a lot and we get a lot of traffic and a lot of sign ups and trials as a as an effect of that. As a result of that. And what we do with those sign ups is both on the email and on the calling side. We communicate with every single trial multiple times during a 14 day free trial. So we you will get a significant amount of email from us during 14 days. We’ll make sure we’ll overcommunicate with you and we’ll tell you the story of our company. We’ll give you tips, we’ll share sales tactics. We’ll give you as much valuable content as possible. It’s going to come from multiple people in the team, not from any kind of info, ad or sales email addresses. No, it comes from from me personally. Welcome you as the founder on the platform will come from people on the team. So we stimulate our trials and our inbound leads to communicate with us via email. But we also call them, you know, in many cases we’ll call you within 5 minutes of sign up to make sure that our reach rate is really high. We welcome you on the platform and qualify you right there. And then we do a lot of lots and lots of sales calls, lots of sales demos. And ultimately, when we close you as a customer and you’re a successful customer, we we go after referrals, we go after developing that relationship further. But, but really sales, sales and communicating to our customers at the core of everything we do. So we, we do a incredible amount of inbound and inside sales to inbound leads through email and.
Bronson: Yeah. No, that’s awesome to hear. I this is a question I started asking people and the response is always so fun. I just keep asking it. After this interview, I’m assuming you’re gonna be working on something to do with clothes. I Oh, what are you working on? Is it a meeting? Is it, you know, going for a walk and calling a co founder to talk through something? Like, what do you work on as soon as this interview is over?
Steli: It’s a new question. It’s a it’s a weird answer. I don’t know. Maybe it’s not, but it’s funny.
Bronson: A lot of the answers are just random. It’s like random.
Steli: It’s not. I’m the I was debating in my head because it both sounds very cliche, but then it’s also something that I don’t do every day. So I’m actually going to be calling customers at Leeds today, so. So I’ll take it for whatever it’s worth. But, but, you know, I, I myself is the kind of whatever founder CEO, I do a lot of the marketing side of things and then managing the team and doing lots of other things. So I’m not as involved in sales as I’d like to. What happens is there’s this tension, you know, that I go out of the sales process a lot and focus more on other projects, and then I come back to it. And now kind of the beginning of the year is a time where I come back to it and I’m like, actually want to call the new trials and welcome them to the platform. I actually want to call some of the more recent customers that converted themselves without us talking to them, some of the smaller customers, and ask them why they did that and how they found out about it. And just like have some personal conversations with people because it’s been probably a bunch of weeks that I’ve had myself on the phone talking to customers. So that’s something I wanted to do this weekend. It’s going to be it’s something on my to do list for today.
Bronson: That’s that’s a perfect to do item for an interview like this. Yeah, this is the last question I ask everybody. What is the best advice that you have for any startup that’s trying to grow? I mean, this whole interview was great advice for a start trying to grow, but, you know, pick out something, maybe something already said, maybe something new. What’s your best advice for a startup trying to grow?
Steli: Talk to your customers, like really at the core and it’s so surprising at the core. The best advice is always the advice that’s not new or brilliant or groundbreaking. Never. The best advice is always something that you’re like, I already know that. Something else, right? I want to get healthy. Well, eat broccoli, work out well. Yeah, but tell me something else. Well, that something else is probably not optimal advice, right? The heart thing is really not the what to do. The hard thing is to do it in trouble. Come your fears, overcome your habits, overcome you know, your comfort zone. That’s the emotional part I find much more challenging than the actual tactical part, which is simple. But at the core, all the good things will come and only ideas and opportunities for growth will come. If you talk to more customers, talk to your customers more, more frequently, more intimately, only good things can happen.
Bronson: As great advice to end on, certainly. Thank you so much for coming on Growth Hacker TV.
Steli: Hey, thank you so much, my man.
Get the strategies, motivation, and in-depth interview with all the details every week!