Here, I give some suggestions about where to start
When you’ve worked at as many small startups as I have, you learn to pay particular attention to mistakes that seriously compromise revenue and/or greatly increase the cost of sales. I cannot think of anything that can impact initial success more than a lack of focus.
So what should you focus on? Two critical areas I will pay special attention to are geography and vertical markets. This is particularly applicable for companies providing enterprise class offerings that require onsite sales attention.
If you are spending more time in the plane, train, and automobile than in front of prospects, you are wasting a lot of time and money. Since these are the two most finite resources a startup has, you must be extremely diligent about protecting them. A good place to start is by minimizing activities that are not in front of your prospects, such as travel.
A new startup in the United States with a $2,000,000 goal should think seriously about setting their eyes first on the East Coast. The greater New York City market dwarfs many entire countries relative to opportunity and can be navigated by train. It’s the only place in the U.S. where you can do six sales calls and still have time for an early cocktail before a business dinner. Even if you expand that to include NYC, New Jersey, Southern Connecticut and Philadelphia, you are still within a two hour radius. Contrast this with a territory that requires multiple city trips with airfare, hotel, extensive travel time and a great deal of wear and tear on your personnel.
Focus does not just include geographical. It’s also important to minimize the learning curve from one account to the other.
There is an expression called “cherry picking” which folks love to use when they advocate selling throughout the U.S. right out of the gate. The defense of this strategy is that there will be more leads and opportunities to choose from. This is true but I feel the benefit is more than offset by travel time and costs.
This also does not take into account the cultural learning curve of covering the U.S. We are a more homogeneous territory than Europe but you wouldn’t know it flying from Boston to New Orleans. I’d start in the northeast both because of demographics and cultural similarities to other countries, such as Israel. In addition, NYC is only five hours behind London, six hours behind Paris, and seven hours behind Israel as opposed to California, which is another 3 hours behind New York. By starting with the East Coast, you can really pay dividends in terms of reduced burnout from many home country sites and the U.S.
Another area that is greatly underestimated is that of industry focus. Most IT enterprise software offerings are meant to serve a horizontal market, so it’s easy to justify going after every opportunity in a geographical territory. Consider the significant benefits of a smaller, more manageable territory and using common industry terminology wherever you go. Everyone in a given industry typically uses the same vocabulary and very similar organizational structure. They also strongly prefer buying from a vendor that has references in their line of business. Understanding these characteristics can greatly offset the cultural divide of language, accent, and personality that can be challenging for foreign companies.
We all don’t have products that are a great fit for financial services in New York City, but just taking these factors into account can make a huge difference. Disregarding them completely can be a major reason you don’t get off to the start you’d like. Time is your most important resource. Don’t waste either on a plane or learning new industry jargon every week. Focus on the number and the most efficient way to get there. Time is money and money is time!
Consider having a senior management meeting including all the disciplines to discuss what industry and geography fits the product and your resource pool the best. Having everyone there and buying in is extremely important.
The views expressed are of the author.
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