Customer Insight Gathering
Making Money Defining Your Market
Effective Sales Strategies
Developing a Financial Model
Moonshot Prototype Finale
Adam Hoffmann of helloNimble has worked in the digital marketing space for over a decade, serving as a UI/UX designer, program manager, strategist and design thinking facilitator. Throughout his career he has participated in and led strategic initiatives for Fortune 500 companies, including Intel, Nike, Google, and GE, as well as a number of start-ups. In the first Moonshot Prototype Series workshop, Adam shares some powerful strategies and tips for getting to know your audience.
Understanding People, Their Pains & Aspirations, and Process
The biggest problem in marketing, Adam said, is that “people look to put everyone into a box,” usually based on their demographic information – their age, race and marital status. These statistics say nothing about the potential customers as human beings. “Really, what we’re going to look at [in this workshop], is gathering insights that establish empathy for your customers, by understanding their aspirations, their pain and their day-to-day activities.”
Adam used venture capitalists as an example. When a venture capitalist receives a 30-slide deck, what does that actually mean for them? How many decks do they actually receive in a day – how many of those do they actually look at? Where do they look at them and how do they engage with that information and format?
The first step is developing personas
Personas are slices of your target audiences, based on data about your actual or potential customers, that serve as a tool for decision-making. Personas provide “an opportunity to really dig into what these people really care about” Adam said, “and it’s the thing that I see most companies miss.”
Many companies, Adam said “look for the basic data and not what’s happening in somebody’s world.” The above persona is typical of what he has received.
“As somebody who’s going to go communicate, what’ve you told me about this person, their actual lives and who they are? I know that he likes to receive good quality products and that he will pay money for them. I know he needs to know that he’s getting what he paid for. He’d like to know what’s happening in his business. He doesn’t like it when he doesn’t get a clear answer. There’s just nothing there for me to know what that actual person is doing or who they are, or what they care about, or why they’re doing what they’re doing.”
Decisions are often made based on personas like these without any idea of what their actual lives are like. Adam said, companies may choose to engage in social media because their persona uses social media. But what platforms or when, or even what he uses social media for is absent.
In contrast, Adam presented a persona he had created. He said, “the best personas that I’ve seen are personas that actually become people. People start making decisions based on this fictitious person we’ve created.” In this persona, Adam created a three dimensional person – a representation of the needs and motivations of someone using that product. “Nina”, the fictitious user of the app, was confused by too many screens and felt the need to be supported in her use of the app by those around her. This information gives marketers and developers the pieces they need to better connect with real people.
In order to create personas that can become real people, you have to think about what people will actually go through when establishing contact with you. What steps they take and how you can help them through their journey so that they’re successful.
This often begins with desk research – finding out what life in that industry is like. What the trends and challenges that these people face. Often, from that you can find influencers or people who are well known and experienced. Adam said he often asks clients for established customers, just to get their insight. Using that research, make sure that you’re asking the right questions and “the funny thing is… they’ll usually tell you the answer.”
A buyer journey highlights the key moments people experience when they’re buying. Good buyer journeys aren’t focused on the sale of a product or the first presentation of a deck, they go beyond that. They examine the steps people go through even before they consider your product and they tell you about the people themselves — what they’re researching and what leads them to your product.
A buyer journey shouldn’t be about your product, it should be about what steps your potential customer will take “and how you can help them get through their journey so that they’re successful” and so that they become advocates of your product.
According to Adam, “if you give me that information, by the time I’m done reading, I’m ready to buy.”
Output: Positioning statement, mission statement and core themes
At the end of your research, you should be able to use these insights to craft messaging for your potential customers. Start with the positioning statement – what makes your company and product different from everyone else and who are you targeting. Messaging framework are the key bullet points you’ll talk about again and again, including your brand promise, mission and brand pillars. Your core themes are the themes that are most closely associated with your brand and product, the things you want your customers to take away from meetings.
Adam Hoffmann is a recent transplant from Portland OR. He has worked in the digital marketing space for over a decade, serving as a UI/UX designer, program manager, strategist and design thinking facilitator. Throughout his career he has participated in and led strategic initiatives for Fortune 500 companies, including Intel, Nike, Google, and GE, as well as a number of start-ups.
Andy has more than 12 years of enterprise experience in technical business development and spent three of those years building out a program serving sales and technical sales hires transitioning into the IBM sales team. In the second Moonshot Prototype Series workshop, Andy shared his insight on market opportunity.
“When you’re thinking about the market,” Andy said, ”you also gotta think about how you’re gonna sell and how you’re gonna build relationships in that space.“
Always remember that in sales, you’re speaking to a person. “These are people that you’re trying to build a relationship with. That’s what drives the sales aspect.”
At the core, it’s all about trust.
“People buy from people they like and people they know,” and when you’re talking sales you’re not speaking to a general persona – you’re building a relationship with a person. Andy recommends The Trusted Advisor for more on fostering trust with a potential client.
In The Trusted Advisor, Master, Green and Galford identify a formula they call the “trust equation.” This equation defines the characteristics clients look for during the initial meetings in the sales process.
(Credibility + Reliability + Intimacy) / Self Orientation
Credibility, Andy explains, is expertise. What experience do you have in the product or industry you’re talking about? Clients need you to show them that you’re a reliable resource, that you know what you’re talking about.
Reliability means that you “build relationships for the long-haul.” You won’t abandon them if something goes wrong with the product and that you’re going to do what you say you will.
Intimacy is the hardest to build, Andy said, and it’s all about “understanding what drives individuals and relationships.” This intimate friendship is why deals are often made over dinner or rounds of golf.
All of these aspects are divided by your self-orientation, whether or not you are driven by your own benefit. “If you’re self-serving, you won’t get very far,” Andy said, “everyone is going to see right through that.” Remember that “the art of listening is imperative,” make sure you ask the right questions and make the most of your time with potential customers. “If you’re only trying to pitch your product, it’ll fall on deaf ears,” Andy said.
It’s also important to know where you’re deficient – if you come across as inexperienced or if you have trouble making real connections.
There’s big difference between B2B and B2C sales.
It’s obvious that there’s a difference between selling to businesses and selling direct to consumers, but what is often missed is the fine line in between. Consider who will ultimately use your product and ensure that if you’re selling to a business, you’re selling to the user, too.
Regardless of who you’re selling to, ensure you show the value of your product from a financial standpoint. Give not only the ROI, but how you got to that number. And after you have the data on the product, don’t make assumptions – use the real numbers.
This can be especially helpful when you’re defining your target market.
Keep a close eye on your competition.
And not just the corporate giants, Andy said. At IBM, there were teams constantly researching the competition – finding startups that were cropping up and tracking their value. Ask where the competition comes from, why they’re doing what they do and what are their entry points.
Don’t do this once. Do it in a cycle.
Andy gave an example: at IBM, sales teams typically went through marketing and sales representatives of prospective clients. They lost two potential clients when another company picked out a less-utilized entry point, targeting IT managers instead.
Identify your client/customer base, leverage your network & validate your idea.
Who is the most likely to buy your product? Why do they need it and what happens if they don’t act? Can you quantify the cost for them or identify the effects?
“It’s a quick conversation,” Andy said, “to say, ‘hey, I’d like you to validate this idea… give me some feedback,’ and maybe they’ll come and purchase what you have.” Especially if you have existing customers, it’s easier to validate ideas with customers with whom you already have a relationship.
There’s no right way to do it.
“There’s no cookie-cutter way to do [sales],” Andy said, “there are some fundamentals that you should have and you get better the more you do it, but not one approach can work for everybody.”
Andy Quintana is currently the Sr. Vice President of Business Development for Accent Technologies. He spent the last 14 years at IBM in various capacities of engineering, sales and technical sales. In his spare time, he mentors individuals on aspects of career and business development and enjoys empowering others to succeed. Oh yeah, and loves surfing and good wine shared with friends.
Strategic Planning and Partnerships
“Strategic planning,” Jonathan said, “is everything.” Not just picking the direction or goals of a company for a year, but examining the ecosystem around the company, setting goals and examining the regular cycles and activities that companies go through on an annual basis.
Jonathan defined three parts of strategy: the objective, guiding principles and actions taken. The objective needs to be specific. The guiding principles are the company’s discriminators, usually having to do with the market, product or unique business model. Examples include trends of being the first to market, or having a business model that better serves customers than competitors’.
The first step in creating a business strategy is defining your business model – Jonathan recommended the business model canvas as a good place to start. It enables you not just to think about your supply chain or pipeline, but helps you round out your ecosystem – understand your suppliers, partners and support net, including potential partners for the future.
Jonathan broke partnerships into three different levels: partners, who are usually informal and short-term; strategic alliances, which are formal, real relationships; and mergers and acquisitions (M&As), the most formal and long-lasting relationships between companies.
Partners serve as the easiest way to expand your ecosystem. These partnerships are loosely formed and don’t have to be exclusive. They can include both true investment partners or joint investments, as well as individuals who simply cross-promote.
Strategic alliances are formal partnerships that are generally exclusive. They are long term and usually involve a joint go-to-market strategy and investment around it.
Mergers and acquisitions are obviously much longer term. From the buyer’s perspective, mergers and acquisitions are all about filling a gap and companies are constantly monitoring the industry for potential acquisitions that could help their strategy. These partnerships take a long time to form and, as a general rule, it’s usually safest to begin looking inside of your ecosystem if you’re planning to sell, before talking to competitors.
Jonathan spent most of his career at Harris Corporation, leading Strategy and Business Development broadly across the company. He recently founded Strategy First LLC, a consulting firm specializing in business planning, management processes and talent development for small to mid-sized businesses.
Building a Sales Team and Executing on Strategy
In the third Moonshot Prototype Workshop, Doug Hilmes presented on building a sales team, from market research to training your team and forecasting sales.
Understand your market. The most important thing, according to Doug, is to understand your customers: who and where are they, how do they buy, and how big are they. When you’re building a deck, your addressable market needs to be at the forefront.
Recruit the best salespeople. Keep standards high by hiring people who are better than you – this is especially important if they will be managing others. Doug said to look for people who have a history of success in your market, have the integrity to build trust with your customers, are good listeners and (especially for startups) are willing to roll up their sleeves.
Once you’ve hired, motivate. Set high expectations – quotas for each rep should exceed company revenue goals and they should change every year. Doug outlined a sales compensation package in his PowerPoint, available at the end of this post.
Design the right territory. Don’t split sales territories across geographic boundaries – know where your sales are and what work is required for each before you divide territories.
Fire fast. “Most employees who are fired are surprised it didn’t happen sooner,” Doug said. When managers realize they have made a mistake, they need to correct it fast. And always avoid the dreaded sales plan – giving an underperformer three months to correct their behavior just means giving them three months to pass their resume around, Doug said. Always know what’s out there, talent-wise, even if you don’t have an available position, know who’s in the market.
Use must-have tools. Don’t ignore tools just because you don’t think you have time to manage them. Use a CRM to track potential customers and collect data, then use tools to visualize that data. Track how people get to your website and how long they spend there.
Always know where your revenue will come from. Track your opportunities, when they will probably close and for how much. A CRM is an invaluable tool for this and there are cheap or free options available, Zoho or Hubspot for example.
Train your team. Equip your sales team with the industry and product knowledge they need to understand and solve their customers’ needs. Give them case studies to illustrate how your product has helped others, with data on the effects.
Communicate with your sales people. Set objectives to ensure that your team always knows their goals. Meet with them on a regular basis and find out what they’re experiencing, where they’re having trouble and what you can do to help them.
Doug Hilmes currently serves as the VP of Business Development at Dialogic. Doug has worked with seven startups and has extensive experience in bringing new products to market.
In this week’s Moonshot Prototype workshop, Groundswell mentor and serial entrepreneur Kailas Narendran shared the ways he’s learned to build up a solid financial model.
Don’t put the cart before the horse.
Build your business plan first, then dive into finances. “The point of a financial model is to highlight and test assumptions in your plan,” Kailas said. Come up with a plan, have some questions ready before building your model and then test those questions and assumptions to see what works and what makes sense.
The financial model may grow and change with your business as you learn more, but it creates a necessary foundation for future projections.
Know what you’re doing.
Whether you’re providing a product, service or subscription, understanding how your business captures value from the customer facing end and how you’re creating that value on a cost basis is what’s necessary before beginning to build a model.
An operations and growth plan is a good place to start. “You need to have a story in your mind,” said Kailas, “it doesn’t need to be the right one,” but it can be the beginning.
Understand the finance and accounting basics.
Kailas introduced the crucial three sheets: profit and loss (P&L), balance sheet and cash flow statement. “I didn’t know what they were at all when I got started,” Kailas said, “and I think that’s a really big step.”
Profit and loss sheet, also called an income statement, highlights how much profit (not cash) you’re actually making. To build a P&L, it’s important to know what you’re doing, how much it costs and what people will pay for it.
The P&L consists of the COGS (cost of goods sold), SGA (sales, general and administrative overhead costs), EBITDA (earnings before interest, tax, depreciation and amortization) and your gross profit.
Pre-revenue companies should still be sure to project these numbers out. “The people you’re pitching to speak in these terms,” said Kailas, “so you need to be sure to speak in these terms as well.”
Balance sheet tracks how much money is owed to you or owed to other people, how many things of value you currently have and how much money has been given to you along the way. A balance sheet gives you the flexibility to plan for what-if scenarios your business may find itself in in the future.
Kailas called the balance sheet “the hardest thing to get my head around” initially, but saw the benefits of having one while fundraising as an early company as it set his model apart from the rest. Don’t get hung up over it as it is difficult to model, but be mindful of it.
Cash flow statements show how much cash comes in and out of your business.
When operating a business, Kailas mentioned the importance of monitoring and projecting your cash flow, calling it the number that “keeps me up at night.” During the fundraising and pre-revenue stages this may not be as important but it’s still a number to keep in mind.
Putting those concepts into practice.
While Excel is the industry standard for financial models, Kailas mentioned his preference for Google Sheets. “It’s a lot easier to get a team working together,” and can be exported to Excel when needed.
With either though, presentation matters. When looking at financial models, most people tend to look for a just few key figures such as gross margins or your topline. Be sure to visually break out these numbers by bordering cells or filling them with color.
Kailas also demonstrated a couple of useful functions he’s discovered along the way.
Absolute & Relative References: A1 vs $A1 vs A$1 vs $A$1, or SheetName!$A:$Z. Used to parameterize the interdependence between figures.
Vlookup: Simple match for first column of range, and pulls value from the n’th column.
Index and match: Much more flexible than vlookup and enables changing parameters over time
After two months in the grind, six companies showcase a final pitch deck in front of a panel of industry experts and investors from across the southeast. The winning company will walk away with a no-strings-attached cash prize of $2,000. Hardware and software companies across the county are invited to share in the festivities.
Finalists will be announced September 8.
The Moonshot Prototype Challenge is a partnership between Groundswell Startups and the Economic Development Commission of Florida’s Space Coast.