Ideas|Products|Startups|VCs

Startups are generally founded by technology/ product management guys and face challenges when they go out in the market to sell the product. Its a very common scenario every startup faces and it simply points to a question – who to hire for their first sales position.

How do you decided who to hire, startups prefer hiring people from close references but again question arises would you hire a VP sales guy from a similar space who is good in closing deals or hire a young but promising guy who is raring to go and will come on board at far less remuneration.

First and foremost step for startups to do is understand what they really need. Most startups have several specific needs that your first sales hire must fulfill. Hiring a wrong salesperson at the first stage can really make a big dent in company’s growth plan, literally can make or break the company. Best thing to do is chalk out the specification for the position, management team should agree on that specifications and then hire accordingly. Some of the questions you can ask while interviewing your first sales guy –

1. How to build sales momentum
Every startup simply needs to begin making sales. Look for someone who has sold a similar product successfully in your space. Hiring a successful corporate salesman into a startup can be a disaster. You need someone who shows evidence of self-sufficiency. Has the candidate launched a product in new geography? Have they set up any channel sales partners in new territory.  Ask your candidate to cite examples of creating momentum in their past jobs.

2. Test Sales Pitch
Resumes can be deceptive so just don’t blindly trust resumes, make the candidate demonstrate their sales technique. Ask the candidate to formally present tentative sales pitch/strategy to the entire management team of your startup, sales pitch can be either for their current product or a rough version of the pitch they would use for your product. Question him on why he chose that approach. That management team should be able to get a sense of candidate selling abilities.

3. Reference Check Your first sales hire is going to bring back critical market feedback on your product as he sells. The right salesperson will be a very important member of your product development team.Check their abilities by talking to past or current clients. Does candidate listen well to potential clients? Has the candidate gone out of the way to sell the product as per the clients need? Talk to at least 2 clients and find out.

-Hitesh, vcBytes.com

I had an opportunity to attend a session on High tech product management at recently concluded Nasscom Product Conclave Meet. Session was phighly useful. I am highlighting one topic from the session which is “Lifecycle of a product”.

The Product Lifecycle Stages:

Development – this is the most costly stage of the cycle as there are no revenues to support development efforts. Losses occur in the short-term, as precious resources are allocated to development efforts.

Introduction – Product is introduced in the market, in this stage losses continue due to high costs and low revenues. There is little or no competition and demand needs to be generated. Customers need to be .sold. on trying the new product.

Growth – Sales effort bring results, costs reduced from economies of scale, sales volume increases significantly, and profits are earned. Competitors begin to develop competing products while prices are at their maximum.

Maturity – costs are relatively low as the need to generate demand has decreased; sales volumes peak, competition starts to heat up. Prices drop based on competitive pricing, mergers & acquisitions occur, and brand & feature differentiation becomes more important.

Decline/Stability - Its that stage where product demand tends to decrease, sales volumes level off or begin to decline as competitors chip away at market share. Prices diminish and production & distribution efficiency become top drivers of profitability.

-Hitesh, vcBytes.com

If you running an e-commerce portal and would like to leverage on existing users by getting repeat orders, the essence is to treat them well after they placed their initial order then only there is high probability of repeat purchases.

Maximize Cross Sell opportunities - Cross selling is the strategy of pushing new products to current customers based on their past purchases. Cross selling is achieved by including in your confirmation email other items they may like, as well as mailers included when the product is sent.

The essence of any successful cross-selling strategy is recommending the right product at the right time. To do this, you must have information on the purchase history of the customer and product relationships. Cross-sell items in similar price points, or higher priced items

Incentive customers to buy again – Always include coupons with the package. Customers who have just brought from you are your best prospects to come back and buy again.

Consider product and money return policy - Having a money back return policy shows customers that you stand by your product and increases their confidence in buying from you. It also shows that you care about the satisfaction of your customer. Specify clearly how the customers should handle the process of returning the item, and when and how they can actually expect to get their money back. However, use this feature only if you can back it up and you are indeed willing to return their money back.

Unless you are selling questionable product, few people will actually take you up on the offer.

-Hitesh, vcBytes.com

E-commerce ventures have suddenly taken off in india since couple of years and lot many players foraying into this segment, some selling books, flowers, apparels, shoes etc. Important marketing and acquisition tool for ecommerce portals are affiliate programs. Affiliate program is form of marketing by which you drive traffic from one website to another.

Let’s investigate if affiliate program is really helpful and the need for your ecommerce portal. You may need to find the answers for these queries -

• First and foremost question is does your product will appeal affiliates to sell, is it good enough users will buy online, affiliates will thoroughly assess your product offering against other vendors.
• Do you have the right kind of setup, infrastructure to support the affiliate program, need to have marketing team which will work with affiliates like true partners. Ui team will be needed to handover the htmls, banners, images etc to the affiliates and guide them in its implementation.
• How easily affiliates can join your program. Steps to be taken to make sure joining is simple and hassle free.
• Do you have billing system in place to pay out their commission – billing system has to transparent and robust to display all their sales and conversion commission and can be easily accessible by the affiliate partners. Does your affiliate program stand out with other ecommerce players, why they should choose you.
• How easily you can carry out payment. End of the day what matters is the commission amount to the affiliates. Any delay or tedious procedure to redeem commission can really hamper your affiliate program.

In short affiliate programs are not easy to set and run it. Having said that portals like shaadi.com, simplilearn are doing well from their affiliate programs.

-Hitesh, vcBytes.com

What’s the first thing it strikes your mind on hearing About Us page, its a page where top honchos experience, credentials and achievements are written/displayed in a profound manner or simply put its basically a corporate dumping ground.

That’s where the problem lies, About us page can do wonders for your company especially in increasing sales, forging partnership and alliances.

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