Over the years I have been a part of several startup teams and am now involved with the birthing process of security start-ups. What has become evident is that great and innovative solutions to BIG problems, better mousetraps, and totally obsessed start-up CEOs far too often fall short of the goal line… Why?: because they do not see their job is to sell.
Startup CEOs fail to understand that getting and keeping their first customer is far harder than finding outside investment… they may well find someone to invest the first time, but without real paying customers the game is over.
Last year was an exciting year for entrepreneurs as investment firms ponied up more than $1.4 billion to security startups and companies in 239 deals (through June 2013). However, only 27% of companies in 2013 were able to secure outside funding within one year. Ultimately, only 36% of accelerator companies since 2005 added to their seed and angel rounds after graduating from the accelerator – due in large part to their inability to gain sales traction in the market.
Every day, we see angel and early seed investors who usually focus on the CEO and CTO — the leader with the vision and the guy/gal who is putting hands on the keyboard — what they overlook is the sales process. Too often the CEO and CTO don’t see themselves as the sales person or closer. This is the Achilles Heel – great ideas and products don’t sell themselves: the startup founder must … sell the idea, sell the vision, sell the Proof of Concept, sell the solution, sell the team, sell … sell … sell… and get a paying customer who believes and shares their vision of the solution.
Start-up founders who are going to jump into this big pond, must be focused on selling during every waking moment. If not, their start-up dream will come to a sudden (and not so pleasant) end quickly.