The Importance of Founder-Led Sales for Startups

Introduction

What if there was a way to keep your thumb directly on the pulse of your business? With founder-led sales, that’s exactly what you can do to propel your startup to the next level. 

While some founders may feel too busy to spend time making sales calls, founder sales is an important strategy if you want to better understand and serve your clients. 

What makes founder-led sales so important? There are plenty of benefits to taking the time to incorporate this strategy, especially if you value strong relationships with your customers. 

Let’s dive into what makes founder sales so important, plus see how successful startups have tapped into this tactic to scale their businesses.

What is "founder-led sales"?

Founder-led sales refers to the process where a founder of a startup company becomes thoroughly involved in the startup’s selling processes and sales strategy. This methodology allows startup founders to roll up their sleeves and become directly involved with the selling process, from defining the company’s overall sales strategy to making sales calls and taking meetings with clients.

Benefits of founder-led sales for your startup

So, a startup founder hops on some sales calls or sends cold emails to potential clients. What’s the big deal? As it turns out, founder sales is a popular and effective way for startups to stand out from their competition.

Startup founders typically have extensive business knowledge and passion for the company mission that allows them to more authentically connect with potential clients. This method also allows founders to be the ones directly receiving feedback from clients in order to shape the future of the business.

Here are some of the benefits of leading with founder sales as a startup:

Unique knowledge about the business

Who knows a business better than the founder? With a startup, the founder is typically the person who dreamed up the business and planned it all out, so they will have a strong sense of how the product will solve specific client problems. That naturally makes the founder ready to sing the product’s praises to clients. 

Plus, with founder-led sales, the sales strategy will directly tie into the business plan and the founder’s goals for the business. While trained sales reps and sales leaders will still be able to direct a strategy toward the business’ goals, the process is more streamlined in the startup’s early stages when the founder is leading the process.

Then, there’s the credibility that founder sales add to the sales strategy. The founder will know the product better than anyone, so clients can trust that the founder knows all the features and how the product will solve the clients’ problems.

Building connections with potential clients 

While startups need to gain new clients, customer loyalty and returning clientele are also essential to doing business. As Forbes reported, acquiring new customers can cost five to seven times more than retaining existing customers, meaning customer loyalty can really pay off.

So, how do you retain customers? Excellent customer service and strong connections will help build satisfaction and trust. By having the founder of the company speak directly with potential and recurring clients, they can put more trust in the brand and feel more secure in doing business with your startup.

Better use of startup resources 

It’s no secret that startups, especially in the early stages, are strapped for funds. According to Embroker, startups can spend about $10K to $125K on equipment alone, and the average payroll cost for startups is around $300,500 for five employees. As such, tapping the founder to lead sales, especially in the beginning, can help save resources. Rather than paying to hire sales reps and buy equipment for a bigger team, the startup can use founder sales to conserve money until revenue increases.

Plus, the founder is already equipped with the knowledge and passion to sell the products, meaning the startup can save time and money on training sales reps, too.

Opportunity for feedback 

Receiving feedback from clients is a pillar of any sales strategy, but when the founder of the company is the one communicating directly with clients, that feedback can have a much stronger impact. That’s because founders have the power to make direct changes based on client feedback, unlike at major corporations, where customer service reps have to pass feedback up the chain of command before anything can be done.

But this isn’t just a benefit for customers. By speaking directly with clients, startup founders can hear about company weaknesses from people in their target market and adapt the business strategy and product development before booking more sales meetings or pitching to investors.

The ability to leverage existing networks 

When founders take the lead on sales, they can tap into their existing network during the search for potential clients. 

“For example, we've invested in a company recently where the founder had spent the last decade working in construction, and he is selling to construction companies,” explains Olivia O’Sullivan, partner at Forum Ventures, in a Startups Scaling Smarter interview. “He's actually spending a lot of time in these different environments and different events where he knows that audience is going to be.”

Founders can also leverage their network in order to get “warm” introductions to their target audience by having a colleague introduce them to potential clients rather than trying to convert a cold lead.

Cold sales have a conversion rate of just 1% to 2%, which is why warm introductions are so important for companies, especially startups that are trying to make those first sales.

Why founders need to build their personal brand

Regardless of whether you feel more introverted or extroverted as a startup founder, building a personal brand is an important step to building credibility, expanding your network, and growing your business.

Many founders do this by creating engaging social media profiles and posts, particularly on LinkedIn. In fact, many startup founders today are driving millions of dollars to their companies just by having a strong personal brand online.

Take, for instance, Alex Boyd, co-founder of Aware and founder of RevenueZen, who posted recently on—you guessed it—LinkedIn about driving more than $6M in revenue through posting on this particular social media platform.

Then, there’s Taylor Udell, head of growth at Champify, who convinced the company’s CEO to build a stronger personal brand on LinkedIn. Now, the company gets 33% of its demos—a.k.a. a large portion of leads—through the platform.

But you don’t have to focus on making a sale with every post. Just by communicating with your audience naturally on LinkedIn and other social platforms, you can create organic interest in your startup.

“What's going to happen is, ideally, if you keep doing that, you're going to get engagement, and people are going to start commenting. Then, the comments are where the magic is,” explains Josh Garrison, VP at Apollo. “If somebody comments on your thing, comment back. If they comment back, start a direct message that might lead to a conversation that's vastly more authentic than what you would get from what we call pitch slapping, where you just find them on LinkedIn, slap them with a pitch, you're not going to get anything.”

Similar to cold versus warm introductions, building a personal brand online driven by passion and industry knowledge will be far more authentic and fruitful than creating less personable sales content on your profile. Ultimately, the authenticity will help readers feel more connected to the startup founder, potentially even converting them into product users.

How the founder of Clay scaled his unique sales approach through ‘reverse demos’

Using a founder-led sales method allows startup founders to get creative in their approach to sales. In experimenting with providing self-serve motions to clients, Varun Anand, COO of Clay, developed “reverse demos” that allowed the company to better serve customers and collect feedback all by taking a founder-led approach.

Rather than walking clients through trials of the product, Anand was able to ask clients to come to meetings with specific questions or problems, then use screen sharing and digital annotations to guide the client as they were using the product to resolve these concerns with what the company was selling. 

Not only did this familiarize clients with the product right away within the demo, but it also gave Anand a direct look at how the product was functioning, allowing the team to make adjustments after every single client interaction to improve the product.

“For me, it was also great because I watched them use the product every day, several times a day,” Anand says. “So I could be like, ‘That button's wrong,’ or ‘This copy is bad,’ or ‘This was confusing UI,’ or ‘This thing isn't working.’ I would get a list of five bugs or problems after every call. I'd work with my team or Eric, who was one of our engineers, and just be like, ‘Let's fix this.’”

Founder sales allow startup leaders to bring their interests and skillsets into the sales space, which can completely transform how the company does business, as evidenced by the success of Anand’s reverse demos for Clay.

Potential challenges of founder-led sales 

Using founder-led sales isn’t without its limitations, though. There are some things to consider before diving into this methodology, but by preparing for the challenges, you can better adapt and still get the most out of a founder-led sales strategy.

One of the biggest challenges to founder-led sales is time. In addition to pitching to investors, tailoring the business plan, and handling the financials at the beginning, founders would also need to make time to prepare and lead the sales strategy. To counter this limitation, founders may consider incorporating AI or building a team of founders to help automate or spread out some of the workload and increase productivity.

There’s also an opportunity cost to consider. For every hour a founder is spending on making sales calls or taking client meetings, they could be missing out on networking events or partnership meetings that are also essential to business.

Unfortunately, kicking off the startup sales strategy with founder-led sales is only attainable for so long, and it’ll be important to have other tactics prepared for when the business scales. The more clients and revenue the startup is bringing in, the more difficult it will be for a founder to continue leading the sales strategy. Have plans in place for how to pivot the sales strategy as the startup scales.

Finally, by leading with founder sales, a startup may take longer to bring in dedicated sales reps or even a sales team, which could hinder the startup from closing more deals. When building a sales strategy involving founder-led sales, be sure to account for how the strategy will transition and delegate the work to sales reps as the business scales.

Finding your founder sales strategy

Founders put a lot of their passion, skills, knowledge, and resources into starting their companies. With so much invested in the success of the startup, it makes sense that founders are a clear choice for leading the company's sales strategy, at least in the early stages. 

By understanding the importance and benefits of founder-led sales, startups can begin building an innovative strategy using founder sales to build brand credibility, secure trust from potential clients, collect valuable feedback, and close deals to take the company to its next milestone.

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