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The Ultimate Sales Playbook for Startups (Techstars)
Amos Schwartzfarb • Wiley © 2019 • 192 pages

Management / Starting a Business

Sales / B2B Selling

Take-Aways
• The “W3” system – based on knowing who, what and why – can help your start-up scale its operations
and maximize sales.
• Most entrepreneurs have theoretical marketing information, but businesses require reliable data.
• Every new business needs a detailed “ideal customer profile.”
• You need to know exactly who your customers are.
• Learn what your customers think they’re getting when they buy your products or services.
• Identify why your customers buy your offerings.
• Every new business needs its own idiosyncratic sales process.
• Sales scalability requires sales repeatability.
• The typical start-up firm should first hire one salesperson, then two or three more, and then double
that sales force.
• Take good care of your existing customers.

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 Recommendation
Start-ups must establish a viable position amid savage competition, but they face competing priorities. To
profit, they must sell quickly, but they also must understand their market sectors. Many new entrepreneurs
jump in before they gain that knowledge – a recipe for trouble or even failure. Sales expert Amos
Schwartzfarb guides start-up entrepreneurs down a better path. His “operational playbook” can help
you avoid costly mistakes and enable you to sell your offerings expeditiously while scaling up efficiently.

Summary

The “W3” system – based on knowing who, what and why – can help your start-up
scale its operations and maximize sales.

A viable business must sell its merchandise or services. If you can’t close sales, you won’t have a
business. Getting sales to close depends on three factors:

1. Providing customers with special, measurable value that your competitors can’t match.
2. Hiring the best people.
3. Establishing a strong corporate culture.

None of these attributes occurs magically, particularly for start-ups. You and your colleagues will
need insight about which customers to pursue and how to pursue them. This requires specialization based
on verifiable customer data. Applying your insights properly will let you refine your operations and expand
your sales.

“Most overnight successes…take close to 10 years.”

To grow, you must test your data to find your ideal market. The W3 framework – which calls for
answering three vital questions – who, what and why – offers a proven business plan for start-ups and
a specialized method for scaling up. The W3 strategy calls for discovering your core customers, and
determining what they will buy from you – not what you will sell – and why they buy. This method calls
for repetitive testing, and it can be tedious and time-consuming. But once you get into a W3 groove, you’ll
see how well it works.

Most entrepreneurs have theoretical marketing information, but businesses

require reliable data.

When entrepreneurs launch new businesses, most of them have theories about their ideal customer and the
solutions they will offer potential buyers. As with any speculative theory, entrepreneurs must determine if
their suppositions are reliable.

Marketing misfires are a common start-up problem, which is why many “pivot” to change their
products, services or targeted customer groups. After all, most start-up founders operate in the dark. Few
can adequately explain what their new businesses will involve or why they brought it into being. Founders
often make little or no effort to validate the business theories they embrace. This keep-your-fingers-crossed

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 approach proves unsound when the time comes to hire people, secure investment capital and expand
the customer base.

Every new business needs a detailed “ideal customer profile.”

As a start-up, your firm must develop an ideal customer profile (ICP); initially it represents your theory of
your perfect customer. After research and testing, your ICP theory can become a valid ICP proposition – that
is, it can provide reliable marketing information about your ideal customers.

You need to know exactly who your customers are.

The first challenge for any start-up is to nail down your specific customers. If you don’t, your who becomes
all prospects everywhere. To meet all their supposed needs, you’ll have to load your product or service with
dozens of features. In a foolhardy attempt to make every prospect happy, you could end up with a bloated
offering that won’t please anyone.

“Targeting everyone means you become the best for no one.” (Prospectify founder and
CEO Noah Spirakus)

To determine your who, learn everything about your ideal customers. Ask three essential questions: “Who
are you selling to?” “What is your target industry?” and “What segment(s) will get the most value?” Once you
develop a detailed, reliable, picture of your ideal customer, you must:

1. “Get more granular” – Secure the most specific, well-defined ICP information. Identify customers
who can’t get by without your offerings.
2. “Disprove it” – Congratulations. You now have an amazing degree of granularity concerning your ICP.
Now try to disprove it. To guarantee that it’s right, bend over backward to prove it wrong.

Learn what your customers think they’re getting when they buy your products or
services.

As an entrepreneur, you might think that your “what” is beyond question, that what your customers believe
they are buying from you is perfectly obvious. However, because customers are human beings, they’ll
make decisions based on their idiosyncratic understanding of what they believe they’re purchasing from
you and not necessarily based on what you’re really selling.

Often, what you sell might not be what your customers actually buy. Customers buy what they want, and
if that’s not what you’re selling, you’ve got a mismatch that you need to solve. While it’s often subtle, the
difference can be significant. In the long run, it can represent the difference between a good sale and a bad
one.

“While the difference between what you are selling and what the customer is buying is…
subtle, it can be the difference between building a…business or…failing.”

Exhaustively query those who buy or might buy your offering. Ask them what they’re purchasing, and
identify exactly what problem they believe their purchase will solve. This ties directly to the axiom that

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 should be your operational philosophy: “Know thy customer.” Listen to your clients, and learn from
them. Find out what your customers value about your offerings. Otherwise, you can’t validate your
W3 theories. As you gain additional information, adjust your operational approach and your business-
development activities. W3 is iterative.

Identify why your customers buy your offerings.

Determining the why can be as complex as figuring out the what. The why issue involves knowing three
additional factors about your customers:

1. “Why you believe they will buy your product.”

2. “Why they say they (may) buy your product.”
3. “Why they really buy your product.”

“Why you believe…” goes to the heart of your company – why it exists. At this point, your rationale for your
start-up business is only a launching point. To properly scale your company, you’ll need viable answers to
the additional whys.

“To cross the final threshold into making a sale, it’s imperative that we understand the
underlying motivation of our buyer.”

“Why they say…” relates to your firm’s solutions to your customers’ real-world problems. It’s great if your
initial why perfectly matches these solutions. If it doesn’t, it may be workable for now, but you’ll have
to address the disparities sooner or later.

“Why they really buy…” is usually is the toughest to determine. But you need to unravel it to make sales,
since it goes directly to customer motivations for buying from you. Such motivations can cover a great
deal of ground. Maybe the buyer chooses your product because his or her boss demanded it, because your
product saves time or money, or because it meets one of the buyer’s metrics – or for some other reason.

Discover your customers’ motivations, whatever they are. Uncovering motives is imperative for maximizing
sales and making your customers happy. In addition to discovering your customers’ whys, measure
them accurately. Without such metrics, you can’t grow. They hold crucial information about the nexus
between your products and your customers. Without metrics, you won’t know if your offerings truly work for
your customers, what specifically about your offerings meets customer needs or why your offerings do the
jobs that customers want done.

Before scaling up, establish your product’s direction in the market and its product–market fit by meeting a
specific demand. Hungry, ambitious entrepreneurs want to scale up their sales forces – hire, hire and hire
some more – to generate maximum revenue quickly. Many try to do so before they have even a cursory W3
understanding of their operations and their customers. At the outset, don’t start hiring salespeople. Make
sure your initial W3 findings are reliable and that you’re pursuing the right customers. Engage in a full-
fledged “customer-development cycle.” Expect it to take at least three months.

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 Every new business needs its own idiosyncratic sales process.

Your start-up requires a dependable sales process tailored to its own needs. Developing a quality sales
process is iterative. As you set up your structure, include a proven customer relationship management
(CRM) system such as Salesforce. Track three to five metrics as your key performance indicators (KPIs).

A sales process lists the steps your salespeople will take to transform prospects into customers. Typical
steps in the sales process include “lead, first contact, demo, proposal, negotiation” and “close,” which
match the typical sales funnel. Most sales funnels are a visual representation of a sales process. Along with
your sales process, you’ll need a sales model, perhaps in Excel or Google Sheets, showing a mathematical
representation of the sales you anticipate based on past performance and future expectations – and both
based on data.

Sales scalability requires sales repeatability.

For repeat sales, give your customers prices that represent real value for their money. Building sales requires
smart negotiating based on treating your potential customer as a partner. Use two principles to shape your
pricing decisions:

1. Charging your first customers too little is better than charging them too
much – Overcharging too early will result in dissatisfied buyers and customer churn.
2. Optimizing pricing requires having a lot of customers and years of experience – You need a
broad base of customers to understand how the market values your offering.

Develop the perspicacity to know when you have closed a sale, as opposed to thinking you made the sale
when you haven’t. This dichotomy plagues many sales organizations. It comes down to being able to
distinguish customer interest from customer intentions.

“If you try optimizing for (a higher) price too early on, you’ll run the risk of getting false
negatives and hearing ‘no’ from real potential customers.”

You and your salespeople must avoid having “happy ears” – the optimistic delusion that afflicts salespeople
and entrepreneurs who confuse a prospect’s curiosity with intent to buy.

The typical start-up firm should first hire one salesperson, then two or three more,
and then double that sales force.

Too many entrepreneurs try to rush their business success. They’re always on the lookout for shortcuts.
Scalability is a marathon, not a sprint. Don’t overextend when you set up your sales organization. Start
by hiring a single salesperson and no more than one. Select someone who can detail his or her prior sales
success. Insist on specifics – for example, “I closed 35 customers totaling $1.2 million in new business, hit
quota every quarter I was at the company, was the top rep eight out of my nine quarters,” and so on.

“If you want more sales, then you need more reps.” (MATH Venture Partners managing
director Troy Henikoff)

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 After your first salesperson has earned his or her spurs, hire two or three more salespeople, but no more at
this stage. Start them all on the same day to promote strong competition. Your next hiring stage will kick
off your full-bore scaling activities. Plan to double your sales force and continue to hire for the purpose
of expanding. Judge all your sales hires according to their experience at early-stage companies, as well as
sound sales results, motivation, hard work, long-term thinking and being independent self-starters.

Take good care of your existing customers.

Once you’re off and running, focusing on new business is tempting, but you must nurture existing
customers. To become fully customer-centric, you need a strong customer-service team.

“Getting to the core of how our customers measure ‘why’ is fundamental to acquiring
high value, low-churn customers and building a big business.”

In a W3-driven, customer-centric organization, activities should never come to a halt once you close a sale.
Develop strong relationships with current customers as part of a clearly defined post-sales process. Check
in and interact with customers regularly. Demonstrate that you are fully invested in their continued success.
Keeping your customers enthusiastic, loyal and on your side is the way forward to transforming your little
start-up into a thriving operation.

About the Author

Amos Schwartzfarb founded or was an early employee in numerous start-ups, including HotJobs.com,
Work.com, Business.com, mySpoonful, BlackLocus and Joust. He has more than 20 years’ experience
leading sales organizations.

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