IN THIS ISSUE
Congratulations. We all made it to 2021.
This issue does not include any of the common editorial tropes for a New Year:
- A retrospective of the past year
- Predictions for the new year
- A list of favorite books, articles, podcasts, and other content from the past year
- New year resolutions or suggested goals
I skip most of that in my reading, and I'll bet you do too.
Instead, you'll find a lineup of topics to help you achieve your goals, overcome your challenges, and be a better version of yourself:
- How to hire the first head of sales for a startup
- How to benefit from the fast growth of cloud marketplaces
- How to meet changing customer expectations in 2021
- How to make better decisions in business and life
SALES & SELLING | STAFFING | EARLY STAGE
How to hire your first head of sales for a young company
"The first sales leadership hire is the hardest, because it’s difficult to ascertain the right characteristics of the ideal candidate."
Why it matters
In early-stage companies, it's hard to choose the right sales leader for a newly created role.
The job of sales leadership is crucially important in a young company, and the cost of hiring the wrong leader can be staggering.
Some SaaS founders from science, technology, engineering, and mathematics (STEM) backgrounds have little prior experience in managing sales, so it's especially easy for them to make mistakes.
In recent months, you've seen a few Driven articles that address this topic, each with different suggestions for how to do it right.
The topic is worth revisiting from different perspectives because it's so important to get hiring right and so easy to get it wrong.
An idea to consider
Tomasz Tonguz, a venture capitalist at Redpoint in the Bay Area, suggests you ask 3 key questions of candidates for the job.
Here's the first (in 3 parrts):
Knowing what you do about our business, what kind of sales methodology would you run?
And how does that compare to your previous role?
What are the differences between your previous company and this one?
For the other 2 questions and a rationale for asking them, click through to the article: "The Three Questions to Ask When Hiring Your Startup's Head of Sales." Tomasz Tonguz. December 15, 2020. Redpoint blog.
Related
"Founders Shouldn't Hire a VP of Sales – Here's Why." Amy Volas. December 8, 2020. OpenView Partners blog.
tomtunguz.com
SAAS | INDUSTRY TRENDS
How might your SaaS company benefit from the fast growth of cloud marketplaces?
"B2B marketplaces unlock larger buyer budgets, accelerated deal velocity and valuable co-sell opportunities with the cloud providers.
"Not to mention 73% of B2B buyers prefer the convenience of digital buying through ecommerce, web direct or marketplaces..."
Opportunity
B2B cloud marketplaces are huge, and they're growing at 25% a year.
Why it matters
Almost half of software buyers have bought through a marketplace in the past year. And almost three-quarters say they’re likely to make future purchases through marketplaces.
If you can hitch your wagon to an engine that's already on a fast growth track, you can grow revenue much faster and at lower cost.
An idea to consider
See if your company can benefit from getting your software listed in an established cloud marketplace.
Here are a few of the top marketplaces to consider:
- AWS marketplace (Amazon Web Services)
- Azure marketplace (Microsoft)
- Google Cloud Platform
For details
"25% of B2B SaaS Sales Are Headed to Cloud Marketplaces." John Jahnke. OpenView Partners blog. December 15, 2020.
Related
"State of the Cloud Report." Byron Deeter, Elliott Robinson. Hansae Catlet. Mary D’onofrio. April 20, 2020. Bessemer Venture Partners blog. [This post provides a summary of the findings of the report. It also includes a link to download a PDF of the 27-page report at no charge.]
openviewpartners.com
BUYERS | RESEARCH
How tech vendors can meet changing customer expectations in 2021
"The purchase process is becoming even more complex in terms of the time, analysis and number of people involved in the decision-making process."
Challenge
Buyer behavior is changing much faster than many B2B companies are adapting. COVID-19 has further accelerated the pace of change.
Why it matters
Sellers and marketers who don't meet the new expectations will be at a disadvantage against competitors who do.
A solution to consider
Read this report of survey research and look for others like it.
A note of caution
When vendors sponsor a research report, it's safe to assume they want to sell you a product or an idea.
Keep these thoughts in mind:
- A sponsor's desire to sell their product may skew the information they share in their report.
- Sponsors are unlikely to publish findings that subvert their sales and marketing goals.
- Their research methods may be flawed.
For example, the survey sample size may be too small to be representative. Or the sample may be skewed in ways that don't represent your target audiences.
For these reasons it's always best to do your own research of your target audiences.
For ideas on how to do such research, see the second item under the Related section below.
Despite these cautions, insights from vendor-sponsored survey research reports can be useful and informative.
They can give you an idea of general trends. You can then use those ideas to conduct your own research with your customers and prospects. Your goal is to test whether the general trends apply to your specific target audiences.
For details
B3B Buyer Behavior Study. Demand Gen Reports. September 2020. [Downloadable PDF, 22 pages. No charge.]
Related
"How the B2B Purchase Process Has Changed in 2020." Ayaz Nanji. October 7 , 2020. MarketingProfs blog. [Ths article summarizes findings of the longer PDF report. Registration required. No charge.]
"Voice of the Customer Methodology: All You Need to Know." Savan Kharad. October 6, 2020. G2 Learning Hub.
rackcdn.com
MANAGING | YOURSELF
How to make better decisions in business and life
"Most decisions have a mix of upside and downside potentials. When figuring out whether a decision is good or bad, you are essentially asking if the upside potential compensates for the risk of the downside.
"To do that, you need to know the possible outcomes and the potential gains and losses associated with each of them. That’s why mapping these out is essential to good decision-making."
Why it matters
Making good decisions is among the most important roles of senior executives. It's also one of the most important skills for getting almost anything you want in life.
The uncertainties of 2020 aren't going to magically disappear in 2021.
We all make dozens of decisions every day. Some decisions are more important than others, but they all add up to what can be major effects on outcomes.
If we can improve the quality of our decisions by even a small amount, we can greatly improve our outcomes.
You can make better decisions in both your professional and personal life.
You can also help your customers and prospects make better decisions.
Who needs this
Three categories of Driven readers are likely to benefit:
- People who sell. It will help for you to understand how the best of the best of your customers and prospects make good decisions. You'll be able to help coach those who are reluctant to make a decision.
- People who lead teams. You'll be able to make better decisions for your team. And you'll be able to coach your team members to make better decisions on their own.
- People who want to improve their personal life. These skills will help you in almost every aspect of your own life, including your relationships with others.
Challenges
For those of us who have never been trained in how to make better decisions, we keep falling into the same traps:
- We incorrectly judge the quality of our decision-making process by the outcome of our decisions.
- We don't understand our biases and how they cloud our decisions. (There are more than 100 documented sources of bias.)
- We don't consider enough alternatives. We don't seek enough divergent views.
- We don't adequately weigh all the risks.
- We don't adequately weigh both the upside and downside.
- We don't estimate probabilities.
Sure, outcomes are important. You try to make careful decisions specifically to achieve better outcomes.
But chance always plays a role in determining outcomes. Unforeseen risks arise.
A black swan or a gray rhino event can always occur. (Think how few of us foresaw COVID-19.)
The outcome of many decisions relies heavily on luck and has little to do with the quality of your decision-making process.
If luck is a major factor in the way you evaluate your decisions, you won't learn how to make better decisions.
If you equate outcomes and decision quality, you might as well flip a coin and forget about making better decisions.
Symptoms
Do you or your leadership team usually evaluate the quality of a decision by its outcome?
In other words, do you think a decision was a good if its outcome was favorable? And you think it was bad if its outcome was undesirable?
A solution to consider
Separate decision outcomes and decision quality.
Focus instead on the strengths and weaknesses of your decision-making processes.
Establish a process for making important decisions. Record what you know and don't know at the time you make your decision.
List your expected outcomes and all the other outcomes you considered. List the probabilities you assigned to each outcome.
In looking back at important decisions, pay more attention to the quality of your process rather than the outcome of your decision.
Resources
I recommend 2 books by Annie Duke, a former professional poker player who holds a Ph.D. in cognitive science. Both books are great reads.
If you don't have time to read an entire book, I suggest the 2 Medium articles by Patrik Edblad.
How to Decide: Simple Tools for Making Better Choices. Annie Duke. 2020. [Formats: Paper, Kindle, audiobook. 288 pages in paper. 93 ratings on Amazon. Average rating: 4.6.]
Related
Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts.. Annie Duke. 2019. [Available in hardcover, paperback, Kindle, Audiobook. 288 pages in print. 833 reviews on Amazon. Average rating: 4.8.]
"5 Mental Models to Help You Think More Clearly, Rationally, and Effectively." Patrik Edblad. December 3, 2020. Mind Café. Medium.
"How to Better Avoid Stupid Mistakes in Life." Patrik Edblad. September 24, 2020. Mind Café. Medium.
Dave Vranicar at Driven
ABOUT DRIVEN
Driven is a fortnightly digest for busy revenue leaders in business-to-business SaaS.
It's likely to be most useful if your company sells higher-ticket products that require moderate to heavy involvement of professional sales people.
Driven is here to help you:
- Achieve your most important goals
- Overcome your biggest challenges
- Solve expensive problems
- Become a better version of yourself.
You'll find an online archive of back issues 12 through 43 at this link.
A word about links, commissions, and endorsements
When I provide links to articles from vendors, does it imply an endorsement?
Only of their content. Not of their products or services.
If I recommend a service or a book, it’s because I think it’s likely to help you. Period.
I get nothing from providing links to any commercial service, including the books for which I provide a link to Amazon.
That may change. I’ll tell you when it does.
Dave Vranicar at Driven