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Monday, July 16, 2012

Sales and Marketing Is Up to the Startup CEO

Entrepreneurs are not often equipped with the sales and marketing experience for products.  They have a burning desire to develop a business and create products.  They come with a set of experiences most often that are industry related.  Some professional marketing and sales trained individuals are entrepreneurs, but many of the startup CEOs do not have sales and marketing experience.

Critical product sales and marketing staff are future hires to a startup CEO.  A company with no products does not need dedicated people early in the company development.  Consultants or advisors can provide the needed experience in this area.  However, the CEO soon realizes there is a product that requires extensive marketing and sales early in the company cycle.  The product is the COMPANY and the sales and marketing person most responsible is the CEO.

Raising capital to run a company can take an extraordinary effort.  The marketing information comes from a business plan and data from the plan is incorporated in a pitch deck for investors.  The CEO must learn how to find and attract the attention of these investors.  Then meet, present, and close the sale.  A successful set of meetings will end up with a closure of a financing and cash to run the company.

CEOs sometimes hire finders or bankers to facilitate in the sales and marketing of a financing.  These finance professionals help to bring interested parties together like a matchmaker.  The selling and closure of the deal still comes down to the responsibility of the CEO.  Many times the CEO has helpers like members of the senior management in the company.  The senior staff is often part of the road show, but investors are mostly betting on the CEO.  If the CEO comes across in the wrong way, the investors go no further than listening to the pitch. 

The technology does carry a lot of weight in the attraction of investors.  The CEO usually does not even get a meeting if the technology is not a fit.  In the situations where the technology is stellar but the CEO is the wrong person, the investors may invest on the condition that they replace the CEO. 

Learning to sell the company is not much different than selling one’s self in a job interview.  Most entrepreneurs have this level of experience.   Some learn to enhance that skill and others do not.   Interestingly, the selling requirement is not simply for financings.  The selling is required for business deals with partners.  Partnering does allow more help from the team as they interact extensively with the potential partner. 

Over time, every entrepreneur will develop the needed skills to attract and close with investors or partners.  If they do not, the company will fail!  Startups need money and/or partners to grow.  Most often, the funds come from investors or partners.  Lean startups may need fewer funds, but they will soon start selling product or services.  Marketing and sales are extremely important to startups and in many cases not limited to the final products.  The CEO entrepreneur must learn to make the transition to a sales and marketing expert.  At least in order to convince investors or partners there is value in the company and they should be interested.