Selling to the Big Guys

Great post over at Will Price’s blog. I’ve excerpted my favorite section here for future reference:

In order to sell against giants, Jamie laid out the following suggestions:

He joked that selling against incumbents is more like jetskiing with whales than like swimming with sharks

  • Focus on competing with bloated products that are overly complex to install, overly complex to price, and where the cost of sale requires very large deal sizes
  • Sell into a market frustrated, scarred, and damaged by the incumbent vendors – lots of shelfware and history of failed implementations
  • Pick markets where the incumbents illustrate a history of incompetence evidenced by frequent CEO changes, failed mega acquisitions, failed customer projects, etc
  • Don’t bloody your nose – sell where they cannot afford to compete (mid market or via delivery models they cannot afford to mimic). Don’t take them head on – nip at their heels
  • Sell deal sizes their sales teams, cost of sales, and quota models cannot support
  • Leverage start-ups strengths: Speed, agility, service
  • Executive sponsorship
  • Pricing flexibility
  • Attention and support
  • Fight FUD and vendor viability attacks: Sell your business fundamentals when they question your viability and staying power, Walk the customer through the clear demand for the product, customer references and case studies, profitability or revenue run rate, and quality of the team

I’m also reading Mike Southon’s "Sales on a Beermat", which is good reading for both novices and seasoned sales professionals. Shopping

Since CK brought it up, yes, I have started using Tesco to order my groceries online. The price points are good (Tesco’s cheap) and delivery is only £3.99. That compares very favorably to, who has Waitrose’s prices (high) and a £5 delivery charge + £5 if you live in central London.

At £3.99 for delivery, it’s really not worth me making the trip to the supermarket and burning my Saturday morning to stock up for the week. I can stop by Borough Market (one of the best markets in London) during lunch and grab some fresh ingredients any day of the week to supplement my online purchases (and we have a Tesco express downstairs if I need eggs, milk, etc.).

I’m sold on online shopping. It’s cheap, convenient and delivered to your door.

Tim Draper – The US is losing its competitive edge

As the guest comment in last weeks Real Deals, Tim Draper outlined his views on how the US is losing its competitive advantage and has lost its competitive governance. The key issues he points to are:

1. Stock Options. 409a forces US companies to value stocks in the future and if they get it wrong, penalizes them
2. Sarbanes-Oxley. It forces companies to spend between $2million and $6 million per year in compliance.

Again, two reasons why the UK is an interesting place to be making early stage investments- options are tax free, and capital gains tax is only 10%. AIM is lightly regulated and costs half as much for the initial listing vs NASDAQ.

However, I still think the West-coast approach to investing is the correct one – and is an approach very few VCs in the UK take.