Why do SaaS companies need sales? | Hacker News Reader

Why do SaaS companies need sales?

a16z.com

92 pointsnsoonhui58 comments

Here's a few tips for SaaS vendors:

- Don't hide SSO behind a talk to sales button. I will not talk to sales and will never try your product.

- Allow monthly payments, but give "generous discounts" for yearly commitments. Many only offer anual payment options, which is a huge risk for buyers. GitLab is the only anual payment I ever accepted and that was after using their platform for free for about 3 years.

- Having a YouTube video demoing your platform >>> meeting with sales

I am like you, but most of our customers seems to have different preferences than me and you.

It would be interesting to know the preferences of your potential customers that are not yet your customers!

That's exactly what I was trying to do without realising it could cause issues but once you lay it out like this, it makes a lot of sense

Cant recall the SaaS site but I found it on HN. On their front page they clearly said - how would you like to engage with us:

[ Setup a Meeting ] [ Watch a Product Demo ] [ Join a live Webinar ]

I think that's definitely a good path to follow

I personally agree with all of this, but the article touches on the reason why some companies basically force talks to sales. If a product is targeting small and mid sized companies, then technical people who want what you listed are going to have a large effect on the outcome. When you’re targeting large enterprises though, getting in conversations with people to try and work on getting the whole enterprise to adopt your product becomes more important. I think those targeting enterprise customers are accepting losing mid sized sales to increase their odds at capturing massive enterprise contracts.

As always, know your target and have a strategy to match.

My thoughts from many years running product for a very successful financial SaaS.

- Roughly 80% of value comes from 20% of the salesforce. Value function is of course heavily weighted to $ revenue but not (from product perspective) 100%. For example, I got huge amount of value from some salespeople who were not the rainmakers but could create connections with my clients to help in product development or they could articulate clearly how the product needed to be improved, unsurprisingly a number of these folk ended up in Product.

- Focus 10% of your best (the 20% above) on the 'whale' prospects. Each industry has these, once you know who they are you want your best people on them. Take the others 10% who are more inclined to lead and get them to run the the 80% to try to raise the overall average quality and find the next generation of superstars. Keep repeating this process every few years.

- Always be looking to automate sales interactions with non-whale prospects, if you have a huge long-tail of prospects then get creative on how to work the pipeline using low-touch sales techniques.

- Some of your best prospects will be people who loved using your product and moved to other firms. Make sure you target and nurture this group.

- Get your salesforce to log all their interactions with clients. No exceptions. Make it easy for this to happen. Valuable as sales churn but also to Product.

This is a great read! Mark Cranney the author is the sales leader Ben Horowitz talks about in his book "The hard thing about hard things". He was known even at the time for being very aggressive sales leader

I think the hardest part about a SaaS Product is to get people interested in the first place right?

If a Server goes offline when noone was using it in years, is it really offline?`

So I guess it comes down to: if you are innovative nobody knows you exists at first And if you are not, there is always competition to squash

You should have a customer ready to pay you before you write a line of code. Preferably multiple customers. If you can sell to your target market without a product you can sell to them with one!

isnt that called being an Agency? I mean writing code for single customer that is ready to pay?

How many SaaS out there can actually bootstrap on 1 let alone 100 customers?

On the other side I have heard the "we built x for y but y didnt end up buying" quite a lot of times.

> isnt that called being an Agency?

I don't think agency is the right term. You're not writing code _for a single customer_, you're not writing code _until you've verified a single customer will pay for it_. I wouldn't expect an agency to contact me and say "hey we have this solution to a problem we think you have, and we'll charge you $99/month for it", I would expect them to say "sure we can build it if you tell us what you want"

> How many SaaS out there can actually bootstrap on 1 let alone 100 customers?

Probably more than can bootstrap on 0. The reason for this advice is to find out as early on as possible whether people will pay you for it. If no-one will pay you for it, you should ask yourself why. If one person will pay you for it, there's probably more people out there that will also pay you for it.

> I mean writing code for single customer that is ready to pay?

Coming back to this question for a moment, the code is not the focus if you're trying to run a SAAS, the product is. And unless you see it as product first, you're going to have a hard time selling it.

no sure I agree with you there, but imho the assumption to find 60 customers quickly is much more important than getting the first one.

Some of your frientrepreneurs might jump in early too and now you habe 20 customers for 99$. Which means you now run at 2k ARR and at least dont work for free.

But it doesnt meant that the jump from 20 to 60 is not going to be painfull.

Sales and Marketing literally offer to that bridge for you and having someone actually do call 100 people and collect their opinions or having someone else actually making sure that google does not rank you as a supermarket online is super important very early on.

I wonder if you can shortcircuit that when the first customer ready to pay is yourself.

If I go through the trouble of building something it is because I really need it for me in the first place (and it does not already exist).

Yeah I think that's a totally valid approach, but it's important to consider "would I pay for this?", as the answer to that is not always the same as "would I build it?"

"Well, I’m going to give you one chance, because you obviously missed it in training, and if you ever come back and tell me that again, you’re not going to be working here.”

Is sales culture usually this bad?

Historically, yes* - I'm not sure how things are today.

* https://youtu.be/GrhSLf0I-HM

I was a sales engineer and I can assure you if your product is sufficiently innovative, nobody will have a budget for it, so this is an expected objection and every sales person would be trained to address it and they either were not paying attention during training or failed to qualify the lead, eg trying to sell Oracle DB to Larry and Sergey while they were still in a garage... of course they have no budget... not yet.

Sure. But if a manager would go "If you have such a stupid excuse/question again you are out" all they would ensure is that I would dread and avoid communication with them.

From my experience, sales is reasonably cut throat. These people aren't there to be friends, they are there solely to sell and make money. If you're not selling you're out the door. If you can't ramp up quick enough, you're out the door. Having a slump? Out the door.

Sure there are lots of friendly normal sales people. Especially, on b2b. But there is still a major culture in a lot of places where it's just people trying to sell and if someone is affecting their ability to sell they need to be gone.

Salesperson's job is to listen. It's like a programmer having trouble reading and applying basic documentation. Huge red flag.

People move up in sales by bringing in deals and selling stuff. This doesn’t necessarily reflect their managerial skills.

As an anecdote, from my own experience, sales as all the way up there, as far as management and the “Peter principle” goes.

Good salespeople get promoted to management, but have little interest or knowledge in managing people.

Unless your platform writes its own proposal content and can burp out pricing and put it in a document with that content ad hoc, then you need sales operations at minimum. Otherwise you will likely scale but have so many fires to put out through bad sales process issues that you’ll wonder how it happened.

I have saas ideas that I’m actively building, one is a high cost low volume product, and another is the opposite.

How can I effectively sell these products, I know nothing about sales, feel like any sales people would try and take a substantial clip of any ongoing business, and don’t expect that having an ongoing full time sales rep would have long term value.

My options are to learn sales myself or hire someone, but I don’t really know what to do in either route.

I’m interested in either approach, or both, my budget would be low 6 figures out outlay if required.

Find leads, market your products to them, set low expectations for yourself, listen to their feedback, close the deal, support and retain the customer.

Sorry but this sounds like "now draw the rest of the owl" to me... How do you find leads? How do you market products to them? How do you get them to say a word of feedback? How do you close the deal? How do you retain the customer?

I am trying hard for the past decade but all of these still go right around my head.

> I am trying hard for the past decade but all of these still go right around my head.

What have you tried so far? There is plenty of information available (even in these comments) about how to find customers.

In early stage, there's no sales. There's talking to customers and solving their problems. Sales comes after product-market fit.

What would you call the attracting of the initial customers?

Market research or product fit

Customer development

validation? proof that there are people who actually want to use your product?

I'll first answer in idealized terms. These initial customers should be early adopters. Early adopters don't need to be convinced. They would jump board, because you are offering a solution they have been looking forward to finding.

This is a very romanticized view of starting a business. And, IMHO, this is a formula to build businesses that appeal to VCs. In reality, starting a business begins with listening to potential partners. I don't like to call them customers, because they are not, at this stage. One should test if there are common problems. Validate that these are worth solving. Develop an MVP. Rinse and repeat.

> sales people would try and take a substantial clip of any ongoing business

As others have said here, take this as an opportunity to learn something new and add sales skills to your toolbox! At a certain point, though, you have to reckon with the fact that paying for sales is better than making $0.

intercom.com and mailchimp.com are two of the most famous SaaS and they are not sales driven. The articles ties together things that do not need to be tied:

1) Enterprise SaaS is only a part of SaaS Sales work better for Enterprise (big fishes) than for freelancer/small/medium businesses. I heard this concept explained as "Hunt whales with spears and hunt small fishes with nets" in other words, Sales for enterprise and marketing scalable channels for small clients.

2) Sales !== Marketing channels The book Traction talks about the many acquisition channels. Some channels are historically considered Marketing (example Content Marketing) and they are a way to acquire large quantities of customer cheaply

Nothing in the worlds sells itself. If it does, it could sell 10x more with good sales.

Is a good sales pitch what makes you go into the store and buy an iPhone or macbook or <insert-some-other-tech>?

Advertising falls under sales...

Perhaps in some broader sense of view I would agree but I don't see traditional sales position shaped around marketing skills. These are usually different positions.

I think tap water, electric utility service, sewer service pretty much sell themselves at this point in human history. I can’t recall ever been “sold” these things and don’t think I’d use 10x as much of any of them after a sales visit.

You've never seen an advertisement for electricity?

The point isn't that any particular residential customer will use 10x, but that any given retailer could Xx their customer base.

And enterprise-scale customers can be great sakes opportunities.

Those things are _definitely_ sold to large corporate consumers. And in places like Texas (with a deregulated energy market), electricity is also often sold to individual home users.

Answer: SaaS products don't sell themselves.

Because humans will always be able to rip-off consumers/businesses more than computers do in terms of renewals.

Who said SaaS products sell themselves?

I believe the latest term is "product led growth"

I would say that anyone doing PLG who thinks sales isn't involved probably wouldn't get very far (at least certainly as a B2B product).

You have to have a product good enough to sell.

That's how I interpret "product led growth".

Sales led growth = implement any feature that a sales guy runs up to you with so he can close his deal

Product led growth is absolutely a valuable practice but it almost always is tightly coupled with a sales team for anything B2B and/or considered purchase.

If the product is excellent for its customers, sure it can. May be we need sales for all other cases.

Every company needs sales. Just look at Google's or FB's giant sales teams.

My company makes mid five figures per month and doesn't need sales

Answer: because competition

I’m struggling to think why I’d click on this clickbait title. SaaS products don’t sell themselves so this must be one of those “say something obviously wrong so people on the internet _have_ correct me” things.

Ahaha, I wish I could prove you wrong, but I am not gonna click for the exact same reasons. :)

We've been close. For years we only had one guy partially doing sales. Most sales were from existing customers spreading the word.

We got a solid number of new customers this way each month that we didn't have to do any marketing and barely any sales.

Then we got some extra backing and could hire several sales people. And they definitely accelerated things a lot.

So yeah... organic sales can work, but it'll probably help having sales people.

Sales intriguing :D

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