Cautionary times? Sure!
Just when I was feeling somewhat comfortable with where the economy was going, I attended the New England Executive Healthcare Network conference yesterday morning with a panel of five experienced investors that reinforced the cautionary stage of early stage investing:
- Money is available but in reserve for dry powder for existing investments
- Difficult environment for fundraising without connections
- Cut the burn and extend the time to fundraise
- Entrepreneurs need to dig deep into specifics and details and go far beyond "the story"
- Do not focus on valuations; be practical and reasonable
A great organization and speakers! Nothing really new in what I heard that I am not experiencing in my own fundraising for our new startup, but it was very good to hear it all consolidated with deep expertise and practical experience plus makiong new connections at the event.
And then this morning on WBZ, as I was driving into Boston, I listened to the downward caution (business confidence enters pessimistic territory) issued by the Associated Industries of Massachusetts, where I'm a board member. Again, no real new news here in this environment of unknowns and caution.
So, the question of the morning: Cut the burn or not?
I would love to hear your opinions and, of course, I'm expecting to hear comments leaning heavily to the same level of general caution with a fair amount of "it depends".
Personally, where I would not make cuts is in the Sales organization where today, I would actually be investing in deeper and more frequent sales training in process, in uniform tools and in platform technologies. All aimed at increasing productivity, not in reducing personnel.
The reason is the math of getting to what we term as "ramp speed". By the time I make the actual decision to hire, go through the recruiting process with repeated interviews, presentations, skills reviews and attribute assessments plus a rigorous onboarding process, my actual timeline is going to look something like this. Then with that new warrior in place, it's time to quickly ramp. In complex product or service sales, the math will look like this:
- 12 to 18 months to get to full ramp speed where the sales cycle is consistent
- Even when a formal sales process exists with consistent training
- Even with high CRM utilization
Plus, I need to make sure that I do not lose anyone I want to retain along the ramp buildup, and unfortunately, in tech sales, the average life of a salesperson in the same position is 2.8 years.
In a year where the unknows and uncertainties are going to continue, for me, this is the time I would be doubling down on:
- exploring future draft choices and having discussions even if I could not hire yet
- adding a less expensive BDR at the front end for increased lead qualification
- increasing the communication and tightening up on team culture
- investing in process and technology training
HAVE A GREAT DAY SELLING TODAY AS WE KICK OFF JUNE!
Just some thoughts for the beginning of the last month of the most important quarter of the year!
2023 SALES PLANNING
Check out our updated sales productivity site page. Just page down to get our new edition of Writing the Winning Sales Plan for 2023. Or you can just email me, and I will send you a free copy. Connect with me at any time for some quick ideas and feedback. There's never a cost for a call or two, plus I love listening and talking about Sales & Marketing.
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Derby Entrepreneurship Center@Tufts.
