Mark is the classic entrepreneur who knew “there has to be a better way.” While at Fox Television, his task was to constantly track all the new projects across the other broadcast and cable networks. So in 1999, Mark set out to build a B2B solution to track the activity and players for the entertainment industry, and then charge a subscription to the networks, studios, and industry firms who all need accurate and current information as to what is going on in this ever-changing industry. Within the first year he was able to pay back his investor (his father), and a year later turn profitable. To date, he has acquired over 250 of the leading entertainment brands and owns the leadership position.

Altus: How did you fund the company to get started?

Mark: I took out a $20k loan from my dad and paid it all back with 8.5% interest six months later. We got traction pretty early, but I kept things very lean and did not really take a salary. I ended up selling the company [the first time] to iFilm in 2000, which enabled me to draw a salary and expand the company. But in 2001 I decided I wanted to buy the company back. So again, I did not take a salary but tried to pass everything I could through the company. I remember my bookkeeper once said, “Mark, you are paying all your employees more than you are paying yourself.” But I knew that is what had to be done, and knew nobody is going to work for free besides me.

Altus: Why didn’t you take on additional investors?

Mark: When I took the company back, we felt like we had been a little bit burned. We had seen how disorganized so-called ‘larger operations’ can be, and in 2001 there was no investment dollars in the market. I always knew if I brought in investors I would have to give something up. I felt like we had the right people and the right model and should just do it! In hindsight, it was a great way to do it actually. It really forced us to be smart, think lean, be clever with marketing, sales, and product – and really became our culture, which also aligned with the culture of our customers.

Altus: What have been your most proud sales or revenue accomplishments?

Mark: It became interesting to me how you realize you are your own biggest obstacle in terms of sales. Because it’s your baby you want acceptance, and I would end up pricing the product to ensure a win rather than its true value. You end up believing your own value system. And in my case, within a niche and fixed market size of entertainment, there are only so many customers. So l later discovered I needed to raise my prices to achieve our full potential. I found that the most difficult part was walking into those sales calls convincing myself of a premium price. The thing that changed our business most significantly was when I decided to tell companies that we charge based on the size of their company. That model ended up being very successful to increasing our revenues and nobody would challenge me on it.

Altus: What was the biggest mistake you made within Sales and Marketing?

Mark: Oh my god, every mistake…every mistake. Most were spending too much on glossy materials and premium marketing campaigns that would yield zero sales. Our guerrilla tactics were always the big revenue and brand generators.

Altus: What key measures do you use to track sales effectiveness?

Mark: I measure my salespersons’ effectiveness based on the number of sales meetings they setup. I believe if you are presenting to enough companies, then the product will ultimately sell itself. The salesperson, no matter how good or bad they are, can never get in the way of the product. Just get in there!

Altus: How would you define greatness in someone from your sales team?

Mark: I always tell my team that you are entitled. It’s a little like the book The Inner Game of Tennis which is about knowing and believing you are entitled, an equal member in that relationship. In our case, when we reach out to someone, we believe we have something that will really help [our prospects] and when you believe that they are not going to hear fear in your voice, they are going to hear that ‘gentle calm.’ It is that confidence and non-arrogance that will make a salesperson successful.

Altus: What advice would you give to entrepreneurs or division heads leading a new venture?

Mark: My dad gave me some advice when I started TVtracker and said you are going to have 150 things to do every day and you are going to get addicted to Things To-Do lists, where you add and cross off tasks, but to always remember the number one thing on the list should always be Sales. Sell it. Get the money in.

Ready Fire Aim

Ready, Fire, Aim is a frequent joke among startups. There is some truth to it, of course. A young company cannot know all the ways in which the market and its customer will respond. In this post, I’ll share some thoughts on how to shift that phenomenon to preparation, focus, and execution.

While there are many pitfalls along the startup path, one of the earliest problems new companies face is identifying, acquiring and nurturing the customer base that is optimal for growth. Finding those customers who have a clear need for the product or service, are willing and able to purchase, and ideally become enthusiastic advocates once they become users; fueling the early expansion of the startup. An additional challenge is that many tech products are solving a problem that customers may not even know they have (think about a better contact management or project management or document storage solution).

Finding this best customer is not as straightforward as it sounds. There are several factors at play between a fledgling company and enduring success with a loyal customer base.

Problem: Even with social networking, no one has heard of you.

Often early stage entrepreneurs with great ideas produce products that are new and innovative. Even though friends, business contacts and other engineers rave about the product, the company still fails to get revenue traction. Revenue does not expand as expected, and new customer acquisition turns out to be much harder than anticipated. Those critical early adopters don’t materialize.

Preparation: What are the 3 most important benefits you provide your customers? Just as important: How you are finding these new customers? How you find them is often as critical as finding them. What are you doing to help those customers find you?

Michelle Riggen-Ransom, co-founder and CCO of Providence-based start-up BatchBlue Software (makers of social CRM BatchBook) recommends a two-pronged approach. “Certainly create accounts in Facebook and Twitter and make sure you are engaging and responding there as you build your online network,” she says. “But don’t neglect the power of making connections in real life. Some of our best customers have come attending local meet-ups, conferences, or when we’ve sponsored an event.”

Problem: A “product for everyone” has high value for almost no one.

When the new product or service has many potential customers, in many different industries or groups, there is a tendency to make the product generic to meet the wide range of marketplace tastes. By making the product “generic”, often it does not have enough value to any one group of customers to be compelling. Instead of being adopted by multiple groups of customers, penetration into each segment is limited because the product has not been “honed”.

“There is a benefit to casting a wide net when you first go to market,” counters Riggen-Ransom, “But you should have the flexibility to adapt once you see where you are picking up traction.”

Execution: How do product enhancements get prioritized?  Who is providing input to that process? Of all the potential customer types, do you know who will be compelled to buy the most, who will buy first, and who will buy again? Conversely, are you willing to throw your plan out the window and create a new one if it looks like your initial assessment was incorrect or changes once you’ve launched your product?

Problem: Crawl, walk, and then run.

While long term success for the business may require acquisition of large customers, it is better to prove technology and sales process with smaller companies first. Targeting the so-called elephants in the room (large customer prospects) as the first and only customers can lead to disappointment.

Focus: Regardless of company size, are you asking yourself why you lost a deal or why you won it? The answers can reveal gaps in your customer communication process.

Problem: Drinking too much of your own Kool-Aid.

Just like finding bugs in a piece of code is hard for the person that wrote the code, many companies have their own image of what their products mean to their customers and what value they provide.

Surprisingly this is often without talking to the customer to really understand how the product affects their lives or business. Without truly “getting inside the customer experience”, there is no way a fledgling company can really understand what it is they offer. So they need to develop an understanding what customers think about the product or service and its value to be successful.

Preparation: How do you regularly communicate with customers? Is there a communication process or flowchart guiding what you say and when? Given the social nature of customer service today, do you have a social media plan?

Problem: Jumping into a crowded pool.

Is there an “obvious” customer out there? Many companies go to market believing there is an obvious customer that will be easy to reach. This may or may not be the segment that will be the best in terms of profitability, top line growth and enduring customer loyalty. The “obvious” customer segment may be crowded with competitors, with price competition and margin erosion. There may be so many product alternatives that customers feel no need to be loyal. From the customer perspective the choices boil down to price and availability, there being little or no meaningful or significant feature differences between the multiple offerings.

Focus: How are you segmenting? The biggest segment is not necessarily the best. Early gains and growth are critical. Pick the segment that can give you early gains, not the one that looks like the largest.

Conclusion: As your customer base expands, and you start to take on more customers providing more features and delivering more value, you will find that these preparation and focus questions can keep your execution on track. Ready, Fire, Aim will not be in your vocabulary but replaced with preparation, focus, and execution. Or, as Michelle from BatchBlue says: “Research, Reassess and Repeat as necessary.”

Image Credit: cliff1066™

David C. Jones is Managing Partner, Altus Alliance, located in Seattle.

Leadership is a critical element of any expedition, any venture, any startup, but too often the real value of leadership is lost in a hierarchy. This post will offer foundational pillars to lead in a more complete, holistic style that develops a balanced and effective leader.

I recall a story about a NASA space shuttle crew in training with the National Outdoor Leadership School (NOLS). Not surprisingly, the group was flush with natural leaders, all of which were fully capable of assuming a designated leadership role. They were training as a team in a remote slot canyon in Utah, a geography specifically selected to place this team in an environment that none of them were familiar with. The experience was new to all of them.

They rotated the Designated Leader (a term we’ll explore later in the post) role each day. On just the second day of their 10 day trip during the ascent of a slot canyon they came upon a steep dry waterfall that they would either have to climb, or turn around and abandon the ascent. Slot canyons are deep, narrow canyons cut by flash-floods – like you may have seen in the recent movie 127 Hours – and they are no simple hike/climb.

Assessing risk and making the right calls are critical to safety and success. In this situation, if they decided to go forward, they would have to climb down into the water-filled hole at the base of the waterfall cut and form a human ladder to ascend, not knowing what lay ahead. The crew commander, and the designated leader that day, felt the prudent choice was to turn around. He did not want to risk injury or worse, prior to the shuttle launch. But he polled the group and found that most wanted to push on.

This was a tense moment since there had been much passionate discussion and he was clearly in the minority. But like his shuttle mission, this was not necessarily a democracy. The tension broke when he deliberately walked into the pool to form the base of the ladder, and committed to move forward.

Leadership should run deep and broad, but is much more than a bunch of highly confident individuals, all trying to call the shots. In other words, a good leader has the ability to change leadership types as the situation demands.

Highly functional organizations recognize that leadership must run deep, regardless of whether it is a sales organization, a climbing expedition, or a space shuttle crew. In this post, we are going to explore how the VP of Sales is “the Leader” of sales and therefore fully responsible for that part of the organization.

While it is the VP may be ultimately responsible for the resulting contribution of the sales organization, it is misguided to think that leadership can or should come exclusively from the VP of Sales.

NOLS outlines 4 pillars of leadership that define the roles within a fully functional team and 7 elements of leadership that define the characteristics found in any good leader. Taken together they can provide a clear picture of a fully functional team – particularly in a startup environment – and a framework for achieving above and beyond expectations. The four pillars include: Designated Leader, Active Followership, Peer Leadership, Self Leadership.

Designated Leadership: This is the classic definition where one person leads the company, or organization.  In typical startups and small companies, you need the ability to collaborate, to get more ideas, but then a decision is needed. A good designated leader will embody all four of these pillars and be wise enough to know when to move into another leadership type or style.

Active Followership: This means throwing yourself 100% into what the group has decided, after processing, seeking clarity, and making a logical decision yourself. It is showing support, acknowledging the group, the strength of the collective. I consider this one of the more important pillars for a startup and its leadership to focus on.

Peer Leadership: In peer leadership, each person sees what needs to be done and does it without a hierarchy. People exhibiting this pillar, this trait, demonstrate by example. Peer leadership works better when members clarify who is responsible for what.

Self-Leadership: This pillar is often illustrated by the self-motivated person. The person who has the “natural” virtues of leadership. A person with self-leadership skills and talent is often one by virtue of who they are and how they influence others, not by the position they hold. They will step up in almost any circumstance, not necessarily to overtly lead, but by their comments, ideas, and actions, people will naturally follow them to get the job done.

Let’s head back to that slot canyon in Utah briefly. Everyone on the NASA team knew at the moment the designated leader stepped into the water that they were developing into a strong, fully functioning team. They knew then that they would be successful ascending the slot canyon – and ultimately on the space shuttle flight.

The Designated Leader had the self-awareness to recognize the situation, clearly and objectively assess the best course of action even though it was not his own selected path, and proactively take on the role of Active Follower, thereby solidifying the dynamic of the team and the future success of their space shuttle mission.

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About NOLS and Dave Jones:

NOLS is the world leader in teaching wilderness leadership skills. Besides their core clientele of aspiring guides and outdoor educators, NOLS teaches Navy Midshipman, Wharton Business School students, and NASA Astronauts.

Dave has completed NOLS’ 30 day mountaineering course in the Wind Rivers mountain range in Wyoming, participated in subsequent NOLS trips and seminars, been a member of the NOLS Advisory Council for 10 years, and served as the co-chair for the Advisory Council for 2 years.  Dave believes in the organization and that the lessons are directly applicable to the high risk of an entrepreneurial startup.  Email Dave.

Resources:  Sales Leadership: http://www.buzzle.com/editorials/6-4-2006-98250.asp

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Inc. Magazine recently wrote a piece entitled How Great Entrepreneurs Think and it starts out asking “What distinguishes great entrepreneurs?” A question we believe we know something about, too.

From the Inc. article:

The piece highlights the work of Saras Sarasvathy, a professor at the University of Virginia’s Darden School of Business, set out to determine how expert entrepreneurs think, with the goal of transferring that knowledge to aspiring founders.  Sarasvathy identified 245 U.S. entrepreneurs who met her criteria, and 45 of them agreed to participate. Revenue at the subjects’ companies—all run by the founders at that time—ranged from $200 million to $6.5 billion, in industries as diverse as toys and railroads.  “I always live by the motto of ‘Ready, fire, aim.’ I think if you spend too much time doing ‘Ready, aim, aim, aim,’ you’re never going to see all the good things that would happen if you actually started doing it.”

On ready, fire, aim, I have to say interesting.  There is a big difference between quantitative research and qualitative research however. We call it a market-driven baseline and it is more qualitative than quantitative. Any company can and should do such a baseline assessment. It focuses on in-depth customer engagement – from a sales perspective. We are not just sizing markets (quantitative); we are trying to develop those HOT (high odds target) customer profiles. By talking to them (qualitative).

This is where a lot of startups fail (and even larger companies with new product initiatives). You have to engage with the customer base. So I think there is a risk here of taking the implied “analysis paralysis” message above and over stating it. While I agree that you can’t let yourself get caught in ready, aim, aim, aim and ever get anywhere, Sarasvathy did not ask or was not able to ask questions that took her deeper than a surface answer.

What an early stage company does need to do is quickly figure out the customer profile that can give them the best results in the shortest period of time. Yes you have to think about it, so at some level it is theoretical, but the real results come from hands on engagement with paying customers, and finding out what the product or service really does for their business or life. These successful entrepreneurs did not succeed by shooting from the hip, they learned and adapted. A market-driven baseline approach helps you figure out that customer profile.

More from Sarasvathy

“I would like to get from them…by meeting with them or getting their input on what they think of the limitation of existing programs….just kind of sit and listen to them telling me…what new features they’d like. And I’d just listen to them talk, talk, talk and then be thinking and develop something between what they want and what’s possible technically.”

Sarasvathy says executives rely less on firsthand insights, because they can afford to place bets on multiple segments and product versions. “Entrepreneurs don’t have that luxury,” she says.

I have to agree here. Basically she is saying here that the value of deep interaction with early customers is key. These CEOs understand what the first real customers do for the business. At some stage though the CEO cannot be the only person that talks to these valued customer/partners. The CEO has many other things to deal with as the company starts to scale. What is important is that the initial sales team is capable of that level of engagement (not just closing the deal) and can feed the critical information back to the rest of the team. What is working for the customer what is not?  Has this customer provided insight that gives you a better idea of what the next customer is going to look for or need? Just as the product may need to be honed, the ideal customer profile will evolve in these first few engagements.

Sweat competitors later

Entrepreneurs fret less about competitors, Sarasvathy explains, because they see themselves not in the thick of a market but on the fringe of one, or as creating a new market entirely. “They are like farmers, planting a seed and nurturing it,” she says. “What they care about is their own little patch of ground.”

Agree wholeheartedly with this one. It is not about market share until you become much larger. What stops most startups is execution, not competition. Most startups are not late entrants into a crowded space. They are innovators entering new spaces or new ways of doing business. They need to get to a significant size before established companies take notice, and those companies probably have too much inertia to react quickly anyway.

The faster the startup can secure customers and define their own market the more likely they are to end up being the dominant player in the (new) segment. The time to start looking at competition is later in the life cycle. That does not mean they don’t need to do their homework though. Knowing who else is out there that may be a threat is important, but execution at early stage pays way more dividends than deep competitive analysis and defensive strategy.

Don’t limit yourself
Corporate managers believe that to the extent they can predict the future, they can control it. Entrepreneurs believe that to the extent they can control the future, they don’t need to predict it. That may sound like monumental hubris, but Sarasvathy sees it differently, as an expression of entrepreneurs’ confidence in their ability to recognize, respond to, and reshape opportunities as they develop. Entrepreneurs thrive on contingency. The best ones improvise their way to an outcome that in retrospect feels ordained.

This is a tricky one. The entrepreneurial CEO is a great source of ideas, and needs to recognize opportunities that are possibly outside the original plan for the product. However where these CEOs stand out, is in balancing the possible with the execution.

In the example above, “It’s easy to see how within an hour you could name 10 products that would each address huge markets, like all employees in Fortune 500 companies, who are rich enough to pay $100 for it.” I cannot believe that the successful entrepreneur would advocate going after all 10 products at once. The startup CEO that succeeds will pick the product most likely to succeed and run with it, ignoring the other 9.

Yes, they stay adaptable, and are ready to change if they need to, but clear instruction and leadership is more important than a new idea every day. Too many companies fail because they thrash between the old direction and the new. There is a fine line that the successful startup needs to walk between myopia (not changing enough) and chaos (changing strategy too much).

Overall, I would say this article has some useful insights and data, but only scratched the surface.  We want to keep following Sarasvathy’s work and wait for her to continue peeling back the onion layers, as the saying goes.  There are some great second level questions behind some of these answers that these CEOs shared and we’re eager to hear the next phase results.

Read the entire Inc. article by Leigh Buchanan here.

5 tips to help entrepreneurs succeed in a meeting with a potential investor.

1.  Leverage your network and convince trusted individuals to introduce you to investors. An effective trusted individual is someone investors will listen to. Our investor pool pays attention to:

• Entrepreneurs whom the investor has backed and made money with, wants to back, or is currently backing.

• Other investors whom the investor has co-invested and made money with, wants to co-invest with, or is currently co-investing with.

2. We often get asked — where do I look for potential investors?  These three categories of Professional Services Providers are good sources, but hard to reach many times:

• Attorney
• CPA
• Investment Bankers

3.  YOU MUST be able to describe your company and it’s value succinctly and quickly. (Since I hate aphorisms I won’t say “you need an elevator pitch”) However you need to be able to describe your company’s vision in a single phrase or sentence. I.E. Groupon is a deal-of-the-day website that is localized to major geographic markets in the United States and Canada.

4.  YOU MUST have a short, concise investor presentation. It needs to include; deck that tells a compelling story about your team, product, traction, and plans. (see “5 things not to do, #1) Email me at  larry@altusalliance.com for the template we recommend.

5.  YOU MUST know your financial/revenue model and the assumptions behind the model backwards, forwards and in your sleep.

5 Things You Must NOT Do When Pitching Investors

1. DO NOT send business plans, we don’t read them.

2. DO NOT spam investors with your business plan, see above

3. DO NOT send business plans attached to items you think will get our attention like steaks, gorillas, coconuts etc. It makes our office smell and we will NOT get back to you.

4. DO NOT ask us to sign an NDA — we won’t sign one. We see far too many deals each month.

5. DO NOT tell us about “sweat equity” when asked how much of your own money did you put into your venture.  We like when you have your own money in the deal.

Of course, you’ve probably heard many of these things before.  As the president of the Keiretsu NY Chapter, I see a lot of plans and pitches. I meet a lot of startup companies.

Guest Post by Jill Konrath

In the movie Jerry Maguire, when Tom Cruise is in the midst of his proposal to Dorothy, she stops him with, “You had me at hello.”  Every seller dreams of hearing those exact same words when they approach corporate decision makers.

Unfortunately, the opposite usually occurs. Instead of capturing their prospect’s attention, most sellers create resistance with their opening remarks and blow the opportunity.

Why do bad things like that happen to good people?

In short, weak value propositions.

If you’re running into trouble cracking into corporate accounts, most likely the root cause is your failure to clearly articulate the business outcomes that customers realize from using your products, services or solutions.

A couple weeks ago, I did a new exercise while training a group of sellers. In small groups, they rated common value propositions that sellers could use when prospecting for new customers.

Using a 1-10 (tops) scale, they evaluated value propositions such as these on their effectiveness in initiating change from the status quo:

__ We offer one-stop shopping for all your (fill in the blank) needs.

__ We’re the industry leader in (fill in the blank) and have been recognized for our exceptional (fill in the blank).

__ We specialize in ( fill in the blank) and work with well-known clients such as Microsoft, Best Buy and Kraft.

After serious discussion amongst the sellers, these value propositions received scores between 4-6. Their rationale? They were nice benefit statements about the company, but not quite as punchy as they could have been.

Since my book, Selling to Big Companies, was required reading prior to the session, I assumed these sellers would ace this exercise. Not so! In fact, they were way off.

The truth is that all the above value propositions really deserve a score of one. Not four. Not six. Just a measly score of one.

“C’mon, Jill,” you might be saying. “How can that be? They’re not horrible statements. They’re nice.”

Yes, they are nice. I’ll give you that. But they’re grossly ineffective and that’s why they rated so poorly.

Capturing the Decision Maker’s Attention

While those commonly used value propositions listed above might be important at some point in the decision process, they’re totally and utterly worthless when prospecting.

When it comes to capturing a decision maker’s attention, here’s what you need to think about:

• Strong value propositions pique curiosity and entice. When prospects hear them, they want to learn more.

• Strong value propositions create a stark contrast from the status quo. When prospects hear them, they’re willing to consider making a change.

Consider this: If you were on the other end of the phone and a seller called with this message, what would your impression be?

“Eric. Jill Konrath calling from Selling to Big Companies. We offer one-stop shopping for all your sales training needs – everything from lead generation to closing. We use state-of-the-art methodologies to ensure our training sticks.”

Does it entice you? Not one iota. Does it get you to consider switching sales training vendors? Not likely. Does it make you want to invest lots of money that’s currently allocated elsewhere? Not on your life.

Statements about your company and what it does are NOT value propositions. Period. They are not value propositions.

If you want to get decision makers “at hello”, you need to clearly articulate the results the customers can expect from using your product, service or solution. That’s results, spelled R-E-S-U-L-T-S.

For example, a few months ago I trained the national accounts team of a well-known media company. All sellers identified one large corporate client with whom they wanted to set up a meeting.

As a result of the workshop, 87% of the sales force landed an appointment with their targeted account.

Those outcomes are unheard of in my business. Virtually every Vice President of Sales will want to learn more.

That’s the power of a strong value proposition. Even decision makers who weren’t considering a change will think it’s worth their time to find out about the sellers offering.

If you really want to “get them at hello,” then make sure you:

Talk results.

Decision makers don’t care about your products or services. They only care about the results they’ll see. Stress that and you’ll catch their attention. Omit those results and you’ve lost them.

Get real.

Refer to actual client successes and include measures or statistics. Success stories from other companies in their industry are especially compelling. By giving specific examples, you really pique their curiosity.

Test your message.

After you’ve planned what to say, ask, “If I were the decision maker, would this message entice me? Would it make me want to spend an hour of my valuable time with this person?”

If your answer isn’t a resounding yes, rework and revise your message till it is enticing. Don’t leave it to chance. Don’t hope that it will work. Your job is to make it so compelling that your decision makers “get it at hello.”

Jill Konrath’s fresh sales strategies, provocative insights & practical advice help sellers win business with crazy-busy prospects.  She’s an internationally-recognized author and popular speaker at annual sales meetings, kick-off events and professional conferences.

This post originally published at Selling to Big Companies blog at http://sellingtobigcompanies.blogs.com/selling/2008/06/are-you-losing.html. Reprinted with Permission.

http://sellingtobigcompanies.blogs.com/selling/2008/06/are-you-losing.html

You have been out selling your game changing product to your network of contacts, and have convinced several to install AND pay for your product. It is time to hire dedicated sales people. Beware – it is easy to believe that this it is simple to hire a sales team. It isn’t and these mistakes can cost you precious time and money.

The five mistakes are summarized here:

• Hiring a strategy-minded VP of Sales instead of a strategic Sales Person
• Hiring a number of sales reps prior to establishing a proven sales process
• Paying sales reps on commission only
• Hiring seasoned pros from big industry players
• Attempting to leverage the reseller market

Five Mistakes To Avoid – Explained

1. Once you are at the point of building out a sales organization, the type of experience described above may be valuable, at this point go find a strategic sales person, not a sales manager.
2. Hiring a number of sales reps prior to establishing a proven sales process with one or two reps will guarantee you an increase in expenses, but not an increase in revenue.
3. You need a strategic sales resource, a team player, by putting that person on commission you will get a tactical resource, focused on their own needs.  That may be appropriate later, but not now.
4. Your old colleagues who are great sales people, used to making lots of money on high volume sales performance. Without an established product, they will likely be completely lost in this unstructured environment, whining about prospects that cannot make a decision, a product that is incomplete, and a sales support infrastructure that is not fully baked.
5. You know there are resellers who would love to represent your product to their extensive customer base.  The challenge at early stage in your market development activity, you need to be fully in charge of explaining your new product to the marketplace, and responding to issues.  This is the ideal to listen and respond to customer feedback. There will be a time for a reseller strategy, but it is not now.

Your customers and prospects will look to you for answers. They will be expecting that your sales team will know how to help them. You have to make sure you have the right sales person for the right phase of your startup’s growth and allow you to gain revenue traction.

Note:  I would love to hear your experiences in managing your startup and how you’ve built your sales teams. I may be able to use your company and ideas in a future post.

A brief overview of what Startup America promises to do:

• Expand access to capital for high-growth startups throughout the country;
• Expand entrepreneurship education and mentorship programs that empower more Americans not just to get a job, but to create jobs;
• Strengthen commercialization of the about $148 billion in annual federally-funded research and development, which can generate innovative startups and entirely new industries;
• Identify and remove unnecessary barriers to high-growth startups; and
• Expand collaborations between large companies and startups.

Startup America is a well-conceived initiative. We believe both public and private organizations need to come together in a coordinated fashion to actually deliver a program and value that can be understood by the entrepreneurial community. The country has experienced successful public examples including the SBA, Dept of Commerce, Dept of Energy, and other grant programs. In the private sector, working examples of entrepreneurial programs include: Kaufman, Case, TechStars, investor groups, and a myriad of foundations.

Add a “Revenue Acceleration Program” to the Partnership

After seeing and participating in a number of these programs, we hope and expect that this next generation of startup support and education includes the critical phase of the initial sales and helping young companies find customers for their products/services.

Mostly these programs focus on the creation of a business plan (document) and the development of the initial product with little attention or remaining funds for the actual sales process.

Mark Leslie, founder and CEO of Veritas, and one of the Stanford professors who developed the Sales Learning Curve would say that a team and product that takes too long in the initial build-out (as it always does in the development) ends up rushing and pushing and spending too much money with a rushed and ill-defined sales strategy.

Our advice and contribution to the organizing committees is to create the framework into two phases: initial build-out and initial sales. Investments, education and support should be in those two phases.

What is essential in Phase Two (when a product is ready) is the development of the vertical segmentation, customer profile refinement, sales structure, value proposition (to name a few) all of which need to be rolled out and evolve based on real market experience.

We are not alone in advocating this approach. In addition to Mark Leslie, many prominent and well-known academics and professionals express how critical the sales and market timing stages are to a young company.

Many people cite Geoffrey Moore’s Crossing the Chasm to explain how the market responds and adapts to a new product or service: Innovator, early adopter, early majority. Or the concepts of Infancy, Childhood, Adolescent, and Adult are used from Michael Masterson’s book: Ready, Fire Aim. We believe that early revenue traction can achieved for startups, if the proper resources are committed from Startup America.

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Here are five recommendations that Altus Alliance partners want to share with Startup America:

1.    Expedite Disbursements: Once federal and state grants are awarded from government agencies, then please expedite the money disbursement to awarded venture start ups. Note: Now there are lags of many months to half a year– depending on the agency.

2.    Restore Qualified Programs: Restore grant funding to programs that have were slashed due to non-strategic across the board budget cutting – especially for R&D grants, and PhD hires. Example: New Jersey Commission on Science and Technology – closed in 2010 with no replacement grant issuing entity.

3.    Add Market Validation to R&D: Establish and increase market research and market validation related grants to enhance likelihood that funded R&D will more likely be commercialized in the marketplace. Currently there is too much emphasis on R&D and hardly any focus on commercialization. Perhaps the Department of Commerce could take the lead.

4.    Establish Net Loss Carry Forward Tax Program: Encourage all states to establish or maintain Net Operating Loss Carry forward tax policies. As a tax policy example, we applaud the US Federal Government for its Qualifying Therapeutic Development Project Grants which were part of the Healthcare Reform Act of 2010.These grants were established to cover past operating losses of life sciences companies. We advocate creating regulation streamlining and cycle reduction for U.S. patents and for FDA approvals because they would have a positive effect to current bottlenecked ventures.

5.    Recognize Sales Stages: Segment programs into pre-product and post-product development so that you create an ecosystem built on market realities. Product development, product creation happens on a different timeline than a Go-To-Market timeline and funding and other types of assistance should reflect this reality. Expand the channels for funding start ups and startup assistance – not just through traditional entities like universities, workforce state agencies and known players who may not leverage this spending in a way that truly impacts sales results, but instead create a challenge program open to those who know how to create new businesses and to reinvent the start-up ecosystem. Wired Bio-1 is an example of a program that was hamstrung and unable to make an impact with a grant from the United States Department of Labor Education and Training (USDOLETA).

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Overall, we believe the biggest issues that small companies face is moving from the idea, or initial product phase, to their first customers and sustainable growth. We want to encourage Startup America to accept and build on the idea that there is much more to growing a successful company (one that can generate profits from revenue, tax dollars and jobs) than just getting them started. In order to succeed, almost every startup needs help getting revenue traction with the right customers. To close, we’ll quote Peter Drucker – “The purpose of business is to create and keep a customer.” Let’s help today’s new startups do just that.

Seattle – July 15, 2010 – Altus Alliance, the Pacific Northwest’s leading revenue traction firm focused on startups and new ventures within larger companies, announced today that Portland business executive Kermit Yensen has become a partner and will lead the expansion of the company’s sales and business development traction services in Oregon.

Yensen brings to Altus Alliance over thirty years of executive, marketing and sales leadership at Oregon-based technology companies, including Massini Group, iMove, Tektronix, Pi Systems, and Hewlett-Packard. During his most recent tenure, as Chief Executive Officer of B2B database marketing firm Massini Group, Yensen provided overall leadership, with hands on involvement in company marketing and sales initiatives, resulting in 3x growth of revenue and strong profitability.

Prior to Massini Group, Yensen served as CEO of iMove Corporation, where he closed two rounds of financing and launched the first portable spherical video camera. He also held the position of Vice President of Worldwide Marketing for the Measurement Business Division of Tektronix, and served in a number of product marketing positions at Hewlett Packard, including Director, Product Marketing and Director, European Marketing Center.

“Kermit offers our clients the perspective of a seasoned start-up CEO, along with sales and marketing expertise to help them drive revenue growth,” said Dave Jones, Managing Partner at Altus Alliance. “This is exactly the skill set we want to bring to our practice in Oregon.”

In his new role, Yensen will help technology and healthcare companies in Oregon accelerate revenue traction through implementation of Altus Alliances’ core service offerings: Market Driven Baseline, Business Development Traction, and Sales Process Optimization.

“Altus Alliance has a successful, proven methodology for enabling revenue growth among early stage and growth stage companies, including more established companies moving into new market sectors. The methodology and partners fit well with my background, and I am looking forward to introducing Altus Alliance to the Oregon business community,” said Yensen, Partner at Altus Alliance.

Yensen earned a Masters of Business Administration from Harvard Business School and has a B.A. in Economics from Denison University.

About Altus Alliance

Seattle-based Altus Alliance is the Pacific Northwest’s leading revenue traction firm serving new ventures with customer-driven sales strategies executed through direct or channel sales results, cost-effective sales processes and structure, and placement services. Since 1999, Altus Alliance has accelerated revenue at over 75 public and private companies, including DocuSign, All Star Directories, AdReady, Netscape, Bloomberg Financial, and Sony. Altus Alliance partners each have a proven track record of start-up success as well as Fortune 100 experience at such companies as Apple, Dell, IBM, Intel, HP and Oracle. Altus stands behind its work with a highly leveraged business model based on compensation for revenue impact or direct delivery.  For more information visit www.altusalliance.com, email info@altusalliance.com or call 206.438.1890.

Media Contact: Annie Eissler, Mixtur, annie@mixtur.com, 206.965.9505, x2238

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Seattle, WA – June 15, 2010 – June marks a major milestone for Altus Alliance, the Pacific Northwest’s leading revenue traction firm focused on startups and new ventures within larger companies. This month Altus Alliance surpassed $100 million in revenue generated directly from the sale of products and services on behalf of its outsourced sales and business development clients. In addition, the firm has contributed another $150 million in revenue indirectly for clients through alliances and proprietary sales process optimization practices.

“Altus helped us define our target customers and close most of our key accounts, “ said Mark Vrieling, CEO of ScreenPlay Inc. “Within a few quarters we transformed a bi-product of our core offering into a significant revenue contributor that later eclipsed our other offerings.”

Since launching in 1999, Altus Alliance has helped over 75 startup, technology and healthcare clients accelerate revenue traction through three core service offerings, including:

• Market Driven Baseline: Developed in collaboration with ex-Veritas CEO Mark Leslie and Stanford University, Altus Alliance’s Market Driven Baseline service leverages the principles of the Sales Learning Curve to validate product and go-to-market assumptions during the initial sales effort and before a company incurs the high cost of deploying a sales force.

• Business Development Traction: With decades of both Fortune 500 and startup experience under their belt, Altus Alliance partners and associates validate a sales and market strategy by managing the sales process and closing direct deals and partnerships leading or along side the management team.

• Sales Process Optimization: By implementing proven sales process methodologies, institutionalizing those sales processes and then creating a winning selling environment, Altus has helped many companies build, re-engineer, or fine-tune their sales organizations.

“Altus Alliance’s business development and sales services, whether through our consultative practices or hands-on engagements, have helped 75 new ventures gain revenue traction while mitigating execution risk,” said Dave Jones, Managing Partner at Altus Alliance “New ventures must constantly evolve in response to market feedback and rarely have the time or resources to maximize their odds of success on all fronts. Altus’ leveraged business model, grounded in revenue delivery versus high fees, offers new ventures experience, best practices, and top line results that they might not otherwise be able to afford. With a proven process and team in place, our clients are able to grow revenue from a solid foundation.”

“All Star’s revenue grew to $37 million while working with Altus Alliance. By implementing their scalable sales management practices and methodologies focused on tracking, accountability and compensation, we improved sales by over 35% in a complex and rapidly growing environment,” said Doug Brown, President and CEO, All Star Directories.

About Altus Alliance

Seattle-based Altus Alliance is the Pacific Northwest’s leading revenue traction firm serving new ventures with customer-driven sales strategies executed through direct or channel sales results, cost-effective sales processes and structure, and placement services. Since 1999, Altus Alliance has accelerated revenue at over 75 public and private companies, including DocuSign, All Star Directories, AdReady, Netscape, Bloomberg Financial, and Sony. Altus Alliance partners each have a proven track record of start-up success as well as Fortune 100 experience at such companies as Apple, Dell, IBM, Intel, HP and Oracle. Altus stands behind its work with a highly leveraged business model based on compensation for revenue impact or direct delivery.  For more information visit www.altusalliance.com, email info@altusalliance.com or call 206.438.1890.

Media Contact: Annie Eissler, Mixtur, annie@mixtur.com, 206.965.9505, x2238