When you engage potential customers, are you selling, or learning?
Getting to know your potential customers is essential for any startup. In early-stage, it is often the highest priority. One of the most significant challenges to that process, however, is a tension between a desire to learn from customers and a need to sell to those same customers—often at the same time.
Learning vs. selling
In early sales interactions with potential customers, we focus on demonstrating our value, and highlighting areas of agreement with the customer. We may employ a “consultative sales” approach (common in modern enterprise sales) and strive to deeply understand our customers’ needs. Even then, we do this with the intention of selling: we elicit customer needs to best position our product, and make it as attractive as possible.
On the other hand, when learning, we focus on unmet customer needs – beyond what our product or service provides, and on areas in which our plans don’t match the customer’s reality. We strive to understand where our assumptions are incorrect as early as possible – to avoid wasting time and making mistakes, and to identify opportunities to improve.
In theory, selling and learning can happen at the same time. In practice, however, they require different mindsets.
Selling is focused on demonstrating our strengths, while learning is about uncovering our weaknesses.
Selling aims to promote agreement, and learning, to expose disagreement.
Your mindset determines how you approach situations, what you look for, pay attention to, and ignore, and how you interpret information. The selling and learning mindsets couldn’t be more different.
How does this play out in real life?
This tension creates two challenges: prioritizing limited time with customers, and drawing the correct conclusions from interacting with them.
Consider the following scenario:
Clara, the CEO, meets with a prospect. She is highly focused on closing a deal (which will probably unlock her next round of funding), and wants full control of the situation – so she doesn’t allow anyone else in the meeting.
The company’s product is still taking shape, so Clara can be responsive to the customer’s requests, and promise just about anything they want. She needs a signed contract, and knows how to get one.
Coming out of the meeting, Clara will have valuable insight into the customer’s needs – which she just heard and promised to fulfill. Unfortunately, those conclusions are likely to be partial and misleading. The nature of the sales process means that Clara avoided discussing any shortcomings of the company’s offering. Exposing weakness, after all, reduces the chances of a closed deal. Furthermore, driven by a sales mindset, Clara may be blind to the limitations of her take-aways.
Based on what she learned, Clara may confidently advocate for roadmap updates in her next meeting with the product team.
Clara is fictional, but the two challenges she illustrates are real: first, the sales agenda limits the attention given to the learning agenda in customer interactions. While Clara may prefer to listen to customers’ challenges, she must move the process forward. Second, unawareness of the difference between the sales and learning mindsets can lead to drawing the wrong conclusions. While Clara listened and responded to her customer, her sales focus prevented her from seeing the other half of the picture.
Managing the tension
“The first principle is that you must not fool yourself, and you are the easiest person to fool” Richard P. Feynman, Nobel laureate in physics and fascinating person
At one end of the spectrum, some companies can ignore this tension and separate the learning and selling processes. This usually happens when companies sell to “consumer-like” customers, such as very small businesses, and companies using PLG. In these cases, the initial approach is often focused solely on learning, and some customers are “sacrificed” to accelerate learning. The tension exists, however, for almost any other company.
The tension appears as soon as the company is started. In the beginning, the company should strictly prioritize learning. At this point, the founding CEO usually owns both sales and product management, and must personally manage the tension between the mindsets. This is especially challenging for CEOs who lack any product management background, and are unaware of this tension. In the worst cases, CEOs create delusional convictions about addressing customer needs that are later revealed as inconsequential. Their companies rarely reach product-market fit. On the other hand, the challenge can be eased if the company works with more forgiving customers. This can be done at this stage by targeting the sales effort at design partners who are comfortable working with startups. These are customers willing to enable the startup to learn by working with them well before the product matures.
As the company grows, it splits sales and product management ownership between multiple people (and, later, multiple teams). At this point, the company should plan its customer engagement process ahead of time in light of this tension. It should verify that all team members are coordinated regarding their role in the process, and aware of the tension between sales and learning. And while each solution is different, some guidelines are useful to maximize efficacy:
Separate the sales and learning responsibilities between different team members (e.g., a sales leader and a product manager) as early as possible.
Involve the product team as early as possible in customer interactions, including those dedicated to sales. Product team member participation can be planned to support the sales process, through their subject matter expertise. Their listening with a learning mindset, even if not revealed to the customer, will improve the team’s customer insights.
In longer sales processes, plan dedicated customer interactions for learning (often called discovery in this context). Verify that these meetings are attended by users and relevant experts from the customer’s side, and not only by the executives driving the purchasing decision.
The selling vs. learning tension is a common pitfall due to mindset and cognitive biases, and it’s impossible to eliminate its effects fully. Despite that, awareness of the problem and implementation of the suggestions described here should go a long way towards overcoming it.
Thanks to Dr. Geoff Staneff and Tsvika Vagman, who helped me develop my thinking about this topic.
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