What I didn’t tell them in NYC and Chicago…
I spoke to Newpreneurs™ at Inc. Magazine/Alibaba.com conferences in New York and Chicago this week about the 5 key things it takes to be successful in growing their businesses explosively through large account selling.
Here’s what I told them:
- Focus. Pick your 4% marketplace to attack and weed out “toxic clients and black hole prospects” as quickly as possible
- Solve your prospect’s real issue. Companies are not focusing on pain, features or benefits. They are buying on time, money and risk.
- Get a bigger buyer’s table. The people who will kill your deal are often times not in the room. Invite your detractors into the process. They will work against you anyway so you might as well face them head-on and work through their issues with them.
- Think like a big prospect. Interest is generated by your compelling advantage, but the decision to buy from you comes from how much fear your big prospect has of your ability to deliver.
- Hunt heavy. Take a big team and all of the resources. If you have to err on how many resources to expend, err on the heavy side.
Here’s what I didn’t tell them:
- It’s not about the product. Many of the contestants in this national Newpreneur™ of the Year contest sponsored by Alibaba.com are product companies. As I listen and judge their presentations, the recurring theme of their 90-second elevator pitch is “my product is best.” Their distribution channels are not necessarily looking for the “best” product. Whether they will take their products to market through dealers, distributors or retailers, these Newpreneurs have challenges that have nothing to do with the quality of the product. Quality and value of product to the end buyer is an issue of returns.
- Distribution channels want to know about:
- Velocity. How quickly will the product move in and out of my DC?
- Margin. How much will be made per unit and palette in total dollars and in percentages in comparison to same or similar product in the warehouse?
- Risk. How long will it take for the sales to be the same or better than whatever it was that filled that space in the DC and on the end sale point shelf?
When they focus on the quality of the product, companies are focusing on one-off sales, not on the big deals that go through 2-step distribution.
- It’s about the supply chain. As my brother Tim likes to say, “In this marketplace, companies don’t buy from other companies, they buy from supply chains. You are not just you any more, you are you plus all the partners you bring with you including your bank, your landlord, your business partners, and everything that makes up the composite picture which is what you offer.” To be successful in going to market, companies have to bring the full solution and the complete team to the table to land their biggest deals.
- Passion will only get you so far.Every contestant has a dream. Their passion inspires to the point of making you want to weep. I’m serious. It is energizing just to be in their presence and if you can get to one of these events coming up, you should. You will leave fired up and confident in the future of our economy. That having been said, very few of the contestants would have survived the TV show “Shark Tank.” Push in on their business plans, poke at their go-to-market-strategies and everything is a little squishier than you would like to see. A couple of glaring gaps:
- Money? For the most part, these new business people are looking at their businesses in a hand-to-mouth fashion. A big order, an investor, even an inheritance would probably not be used well based upon the answers to the questions we heard. There has to be a plan for what the next level of money would do for the business.
- Team? You can’t do it alone. Each of these businesses needed a MasterMind group of advisers to guide them.
- Scalability? One of the first things a big company is going to ask a product company is “Can you keep up with demand?” This is a question that was not well answered by most of the contestants. A strategy that says “We’ll figure that out when we get there” will run out of runway the moment the business is “there.”
The Newpreneuer™ series of events has been great and I am looking forward to the remainder of the tour. Even with these small critiques, I understand why almost two-thirds of Americans surveyed believe that the economic turnaround will be fueled by new entrepreneurs, not the large, old-line companies of the past.