Last night I had the good fortune of seeing Marcus Whitney give a talk to a small group of aspiring entrepreneurs. I’m pretty sure everyone in attendance was expecting a polished presentation. But, rather refreshingly, the first thing Marcus did was open the floor to questions. A bit awkward, but ultimately rewarding.
Early in the evening Marcus started getting very specific questions about marketing plans and strategies for approaching investors. One individual was concerned about how to calculate his TAM (total addressable market). And rather than respond with technical answers, Marcus made a somewhat bold point about entrepreneurship. What an entrepreneur should focus on is the total number of people they can directly impact and directly sell their product to. Your total addressable market is who YOU can successfully sell to.
Entrepreneurship isn’t about your idea. It isn’t about your product. It isn’t about your business plan. Ultimately it is about your ability to turn people into customers. And when you’re just starting out, that means YOUR ability to close deals.
I’ve always known that investors don’t necessarily invest in the idea or the product, but rather they invest in the person. It’s all about the team. You want to have someone who can execute and deliver. Execute the strategy, execute the plan, and deliver results. But, bluntly, investors invest in the individual that can actually sell the product. The person that can actually get somebody else to buy what it is they have to sell. Of course there are myriad social media tools you can leverage to market your product, but in the end it comes down to what you can accomplish as a lone ranger. Or with the small tribe devoted to your vision.
This mindset was very eye opening for me. I spend a lot of time thinking about products and services and wanting them to cater to my needs, and wanting them to be perfect, and wanting the product to do everything I want it to do. I’ve spent a lot of time focused on perfection (of products, processes, and business plans) and not enough time focused on selling.
I’ve never had a sales job in my life. I’ve never had to sell anything. And that is definitely an important skill set to have. One could argue that it’s the most important skill for an entrepreneur to have.
If you’re an entrepreneur, or if you’re just starting out with your own business, give this some deep thought …
Investors are going to invest in the person that can actually sell the product they endeavor to build. They’re going to invest in whatever opportunity the individual running the show can capture for themselves and their company and their investors.
If you can capture market share, you will succeed. It almost doesn’t matter what your product is. I can’t help but think about Steve Jobs. The man could sell. And, bonus, not only was he an incredible sales person, he was a very talented and gifted product person too.
In the end, it’s doesn’t really matter what you think you do, what you actually do is sales.
Last night we also discussed crowdfunding. Marcus recently ran a very successful crowdfunding campaign on Kickstarter for a project of his.
The success of a crowdfunding campaign is highly dependent upon your ability to capture 25% of your necessary funding as soon as the campaign starts. Campaigns don’t crawl to the finish line, they need to start with a bang. You have to capture a huge portion of your anticipated raise within the first four hours of your campaign being live. You have to conquer the psychological component of the marketplace. Because once that happens the band wagon effect will take over.
Marcus talked a lot about how in order to make sure he had 25% of his campaign raised in the first four hours of launching he spent a great deal of his time selling his idea and product to individuals he knew would buy it. Selling to the people closest to him that he could trust to provide what he needed. He had deep customer relationships prior to his launch, with an active communications channel open and discussions engaged, so that the second he launched the campaign he could send an email to the people he knew were going to buy the product and say, “it’s time. Go buy. And thank you for your support.”
This commentary on crowdfunding further illustrated the point that entrepreneurship is about your ability to sell your product, and your ability to capture the market. Again, it was about closing deals and making sales.