Seven Questions for Startup Founders

Seven Questions for Startup Founders, Peter Thiel

Seven Questions for Startup Founders
by Josh Lowry

On a recent flight from Seattle to Newark, I read “ Zero to One” by Peter Thiel. Thiel co-founded PayPal and subsequently invested in several successful startups, including Facebook, LinkedIn and SpaceX. In his book, Thiel states that progress is held back by “sameness” – that is, undifferentiated products and services . It is only when companies do something truly different or unique that they create real value. Thiel further states that to avoid failure, every business plan needs to effectively answer seven fundamental questions. The seven questions are:

  • Distribution – Do you have a way to both create and deliver your product or service? Selling and delivering a product or service is at least as important as the product or service itself.
  • Durability – Will your market position be defensible in 10 and 20 years into the future? First-mover advantage does not do you any good if another company unseats you because your business was not defensible.
  • Engineering – Can you create breakthrough technology instead of incremental improvements? Propriety technology must be an order of magnitude (i.e., 10X) better than its nearest substitute.
  • Monopoly – Are you starting with a big share of a small market? It is better to monopolize a unique niche of a small market than face vicious competition in a large one.
  • People – Do you have the right team? Why would someone join your company if they could work for Google for more money and prestige? The talent you want will be attracted to your mission or your team or both.
  • Secret – Have you identified a unique opportunity that others do not see? Conventional truths are not secrets because everyone knows them. You must have a specific reason for success that other people do not see.
  • Timing – Is now the right time to start your particular business? No industry or sector is important enough that merely participating in it will be enough to build a great company.

It is easier to copy a business model than create a new one. Doing what has already been done takes business from 1 to n – adding more of the same. However, when something new is created, business goes from 0 to 1. The act of creation is singular, the result is something different and unique. Today’s best practices lead to dead ends. The best paths are new and untried. The goal is to create new products and services, as well as better ways of making them. Successful startups find value in unexpected places and they do it by working from the above principles, not formulas.

All contents copyright © 2014, Josh Lowry. All rights reserved.

Attitude: The Difference Maker

Attitude The Difference Maker 

Attitude: The Difference Maker
by Josh Lowry

“Attitude is a little thing that makes a big difference.” – Winston Churchill

Up until 60 years ago, running a four minute mile was thought to be impossible. Then, on May 6, 1954, Roger Bannister broke through the barrier in Oxford, England. Three years later, 16 other runners had also run a mile in less than four minutes. What changed? Did the runners get more talented? No. They changed their attitude. They knew that running a mile faster than four minutes was now possible. The mental barrier that had previously limited them was gone. They went from cannot do to can do in their mind. The same applies in business.

People at the top of their profession, whether in management, sales, etc., are often comparable in talent. What differentiates them is attitude. As leadership expert John Maxwell says, “Attitude is the difference maker.” While you cannot  always choose what happens to you, you can always choose what happen in you. Attitude is a choice. A positive, can-do attitude will help you do everything better than a negative one. Having the right attitude is essential to success. If fact, successful people proactively guard themselves from both negative people and negative self-talk.

Success requires discipline or the ability to show up every day and do the right things. You must be willing to do what no one else is willing to do. As motivational speaker Grant Cardone says, you must always be willing to do “whatever it takes” to win. To break through your next professional barrier, stop comparing yourself to the best people in your company. Instead, compare yourself with the best people in your industry. Do whatever it takes to be first. Your goal is to dominate, not compete. Your attitude will be the difference maker.

All contents copyright © 2014, Josh Lowry. All rights reserved.

Using Sales Benchmarks to Predict Revenue

Using Sales Benchmarks to Predict Revenue
 Using Sales Benchmarks to Predict Revenue
by Josh Lowry

Benchmarking is the process of comparing a company’s performance against the industry average. Benchmarks help companies to answer, are we performing better or worse than similar firms in similar industries against specific metrics (benchmarking against top salespeople is also helpful). Below are six benchmarks identified by Boston firm, OpenView Venture Partners, geared toward organizations with outbound sales methodologies and processes. Three of the benchmarks involve pipeline generation and three involve revenue forecasting. The six benchmarks are:

Pipeline Generation:

  • Calls-to-Connections = 9%. Divide the number of outbound calls by number of client connections. This metric indicates how effective sellers are at getting prospects to answer the telephone.
  • Connections-to-Meetings = 23%. Divide the number of client meetings by the number of client connections. Low conversions may indicate bad accounts, ineffective messaging or poor selling.
  • Meetings-to-Opportunities = 38%. Divide the number of qualified opportunities by the number of client meetings. This metric indicates the quality of client meetings being scheduled.

Revenue Forecasting:

  • Opportunity Wins = 27%. Divide the number of wins by the number of opportunities. This metric indicates how many opportunities need to be closed to hit the revenue target.
  • Pipeline Coverage = 306%. Divide the amount of pipeline by the quota for the period. This metric reveals how much pipeline is needed to achieve quota during the forecasting period.
  • Pipeline Slippage = 21%. Divide the number of opportunities forecasted to close, but pushed into next period, by the number of opportunities forecasted to close. High slippage may indicate pipeline fluff or poor forecasting.

In addition to comparing performance against industry and internal averages, benchmarks can help reverse engineer sales activity to predict revenue outcomes. For example, from 500 client calls, 45 client connections will be made (9%). From 45 client connections, ten client meetings will be scheduled (23%). From ten client meetings, four qualified opportunities will be generated (38%). From four qualified opportunities, one win will result (27%). Pipeline coverage and pipeline slippage can then be factored into the equation to complete backing into the revenue target.

All contents copyright © 2014, Josh Lowry. All rights reserved.

Business Scale in Sales

business scale, scale business, scale in business

Business Scale in Sales
by Josh Lowry

During the 12 years that I spent at Microsoft, scale was drilled into me every day. In sales, to avoid duplicated or unnecessary roles being utilized, scale means only the right people at the right time are involved in a client engagement. This standard ensures the highest and best use of each person’s time is taken into consideration.

Why is scale important in the sales process? Every organization has limited resources, especially people. If duplicated or unnecessary roles are utilized, there is a significant opportunity cost to be paid. These resources are not out working to acquire new clients or add other value to the business.

Sales leaders should regularly assess how effective their organizations are at scale. Over-resourcing client engagements is often the result of a lack of capability and/or confidence in one or more members of the team. These situations are coaching, readiness and training opportunities to ensure the right organizational capability is achieved.

Scale Questions:
* How can you grow both market share and revenue by X% with Y% less resources?
* What people, process and technology can you re-align to deliver more with the same resources?

All contents copyright © 2014, Josh Lowry. All rights reserved.

Best of Twitter – September, 2014

Best of Twitter – September, 2014

Best of Twitter – September, 2014
by Josh Lowry

A summary of my tweets and re-tweets during the month.

  • As much of a pain as it is, two factor authentication is becoming a necessity. @MCuban
  • Cloud computing helps businesses shift resources to customer-facing innovation and growth. @MarkVHurd
  • Dreams do not come true. Dreams are made true.” @DangeRussWilson
  • Funny how people view their excuses as reason. @LarryWinget
  • Good culture equals company growth. Create the work culture where your people want to be. @ResultsDotCom
  • Great leaders do not do greatest things. They get other people to do greatest things. – Ronald Reagan
  • Here to cheer on Mariners against Angels (09-28-14). Need M’s to win and Oakland A’s to lose! @Josh_Lowry
  • Horizontal growth companies bad bc they just copy existing biz and expand w/n competitive markets. @PeterThiel
  • If u are waiting for encouragement, u are doing it wrong. By time people think idea is good, too late. @Levie
  • If you cannot forgive and forget, pick one. – Robert Brault
  • In good or bad situations, always prepare your team to win versus stand back and hope they win. @Josh_Lowry
  • IT can better support the business by freeing up staff in the server room. @MarkVHurd
  • It is true that integrity alone will not make you a leader, but without integrity you will never be one. @TheZigZiglar
  • Leaders boost self-esteem of others. When people believe in themselves, amazing things happen. – Sam Walton
  • Looking for senior cloud account executive in Boston and NYC. Know any A-players on market? @Josh_Lowry
  • Looking for senior cloud account executive in Los Angeles. Do you know an A-player on market? @Josh_Lowry
  • One of my rules of life is always work with people you like. @MiltonGlaserInc
  • Perfection is achieved, not when nothing more to add, but when nothing left to take away. @ValaAfshar
  • Seattle Mariner’s beat Los Angeles Angles 2-1 (09-27-14). One game back. @Mariners
  • Shadow IT is enterprise code for AWS. @Mattray
  • Strategy is about being different; choosing a set of activities to deliver unique value. @MichaelEPorter
  • Success has nothing to do with what you gain in life for yourself it is what you do for others. @SteveGutzler
  • The magic of agreement is the first rule of sales. @GrantCardone
  • The more you know the less you need to say. @OfficialJimRohn
  • The only feedback that you can truly count on and trust is sales. @BarbaraCorcoran
  • The Seattle Mariners beat the Los Angeles Angels 4-1 (09-28-14). Great season M’s. @Josh_Lowry
  • The separation is in the preparation. @DangeRussWilson
  • There are only two options with commitment: You are in or you are out, there is no  in between. -Pat Riley
  • There is no return on drama (ROD) in organizations, yet it is in plentiful supply. @Benjamin_Akande
  • Things do not happen. Things are made to happen. – JFK
  • Today’s pair of AWS launches brings the total for the year to 302. @JeffBarr
  • Truly revolutionary companies come up with new ideas that take civilization to the next level. @PeterThiel
  • Watching Shark Tank on CNBC. Cuban is best, but O’Leary usually right about royalties vs equity. @DonDodge
  • Yesterday’s differentiator is tomorrow’s commodity. That is what keeps this industry so exciting. @Levie
  • You cannot be motivated if you are not honest with yourself. @GrantCardone
  • You do not build a business. You build people and then people build the business. – Anonymous
  • You do not have to preach to people or try to straighten them out. Just be a person of excellence. @JoelOsteen

All contents copyright © 2014, Josh Lowry. All rights reserved.

Strategy: 10,000 to 10 Feet

Strategy: 10,000 to 10 Feet

Strategy: 10,000 to 10 Feet
by Josh Lowry

Strategy is the intelligent allocation of limited resources to create a unique system of activities to outperform the competition. Being unique in the market is the result of the system of activities being different or being performed differently than the competition. Uniqueness is how new, differentiated value is created for clients. To achieve and maintain strong strategy execution, leaders must have both buy-in and commitment from employees at all levels. When they do not, strategy often fails or stalls causing missed opportunities or worse.

According to a study by Harvard Business School, 95% of employees in large companies are unaware or do not understand their firm’s strategy. Even if that number is high, it worth polling the team to gauge the actual percentage. Why? Successful strategy execution requires employees to understand the company’s strategy and the why behind it. They must also understand how the strategy relates to their job and will help them achieve their goals. When leaders take strategy down to a personal level, from 10,000 to 10 feet, they help to create employee buy-in and commitment.

All contents copyright © 2014, Josh Lowry. All rights reserved.

A Case for Sales Territories

A Case for Sales Territories

A Case for Sales Territories
by Josh Lowry

John Patterson of National Cash Register (NCR) is credited with the creation of organized selling. In fact, the majority of the sales practices that he established in 1893 are still in operation today, including assigning quotas and creating territories. Sales territories are pre-defined accounts, areas or verticals assigned to sellers to develop and grow existing and new business to deliver revenue targets. Below is a business case for why the advantages of implementing geographic sales territories outweighs the disadvantages of same.

Advantages of Sales Territories

  • Better allocate resources and assign quotas based on market opportunity. If the addressable market in Seattle is $X, more effective resource allocation and planning decisions can be made related to office space, people, quotas, etc. Focused investments and resources produce better returns.
  • Build markets versus acquiring accounts. Sales territories enable companies to build markets in specific geographies (e.g., San Francisco). Not having territories means clients are highly distributed. Building markets creates a local presence and enables key relationships to be formed.
  • Capitalize on local and competitive knowledge. Sales territories enable sellers to build and capitalize on local market and competitive knowledge that helps them to create better strategy and execution. Every market and region is different. Sales territories allow sellers to account for those differences.
  • Create the option to segment accounts. Companies often segment sales territories into enterprise, mid-market and SMB, with different teams calling into different sized accounts within the same geographies. Because each segment makes decisions and buys differently, better performance is achieved through focus.
  • Decrease travel and increase selling. Instead of spending unproductive hours in airplanes and cars traveling to distant clients, sales people can maximize their selling time by building relationships and closing deals. Minimizing travel also significantly reduces the cost of sale.
  • Increase effectiveness of sales operations. Managing sales activities, including aligning partners and assigning leads is easier with sales territories. Sales operations is also able to gain deeper insights and trends within geographies and markets, including business climate, client needs, competitive threats, etc.
  • Reduce conflict across the sales team. When companies do not have clearly defined sales territories, the potential for conflict is great between sellers. What if two sellers are unknowing calling into different divisions of the same account? Who “owns” the account? Sales territories alleviate sales conflict and client confusion.

Disadvantages of Sales Territories

  • Ambitious sellers limited. Opponents of sales territories believe that geographic boundaries limit ambitious sellers by restricting who they can do business with and where. If a talented salesperson is assigned to a set of bad accounts or territory, good leaders should find an opportunity to utilize them in a different region or role.
  • Lack of specialization.  Sales territories often have multiple industries within each geography. Companies that offer industry-specific solutions (e.g., healthcare) need sellers with specialized knowledge. Most of these companies tend to base territories on a named account or industry/vertical basis versus geographies.
  • Personal referrals passed to other salespeople. If a seller receives a referral from someone outside their sales territory, they cannot work it. While the client or person giving the referral wants the seller to work the deal, they cannot. In these situations, sales leaders should review the quality and relevance of the referral for an exception.

All contents copyright © 2014, Josh Lowry. All rights reserved.


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