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I recently watched the movie “The Intern” starring Anne Hathaway as CEO of an eCommerce startup and Robert DeNiro as her “senior intern”.

It was a fun movie, and I thought it might also be fun to look at what the movie got right and what it got wrong about startup life. Let’s start with what it got right, which is a lot:

  • The CEO’s life is totally consumed by the startup, leaving little time for family or friends
  • The CEO is lonely and stressed. Heavy is the head that wears the crown.
  • The CEO is obsessed about the user experience, down to taking customer service calls, dictating font size on the home page and instructing how to fold tissue in packages.
  • The CEO’s obsessiveness and micromanagement, that worked so well when the company was small, is starting to impede the companies ability to execute as it grows. Overly centralized decision making is slowing down the company
  • Everyone in the company is incredibly aware of the actions and words of the CEO and parses them for meaning all the time.
  • People are packed in incredibly tight in the office. The “feel” of the set reflects the feel of many startups
  • Everyone uses Macs
  • An intern is able to get noticed and get more responsibility by noticing and taking on additional tasks that are “beyond the job description” without being asked. In contrast, a really well qualified and hard working employee (the CEO’s assistant) doesn’t get opportunities to advance because she does exactly her job and no more.
  • Being close to the CEO gives you more opportunities to get ahead. Even in small companies, politics is real

What did it get wrong?

  • The board wants to replace a charismatic and well loved founder with a “professional CEO” when the company is growing really fast but starting to see operational breakdowns. In such a situation it is more likely that the board would look to supplement the management team with experienced people at the COO or VP level. Usually CEOs get replaced when the company isn’t growing fast enough, not when it is growing too fast.
  • The board broaches the prospect of replacing the CEO through a conversation with someone other than the CEO. There is no way that a topic as sensitive as that would not be discussed directly and discreetly, without involving any other members of the management team.
  • The CEO flies in first class, has a personal car and driver, and stays at fancy hotels. And not only does the CEO fly first and stay in fancy hotels, the intern does too! Startups lose money. If the CEO is maxing out their T&E then everyone else in the company follows their example, and that is a very bad place to be.
  • Most of the employees of the company look like, well, actors and actresses! The typical startup staff isn’t as young, slim or good looking as is represented in the movie. They also aren’t nearly as white as in the movie (probably 90% of the extras were white, with the rest evenly distributed among other ethnicities). Facebook’s demographics are probably more representative of most startups; 55% white, 36% asian and the rest other ethnicities.

Overall, a fun movie and it gets more right than wrong about startup life. What else did you think it got right and wrong about startup life? Add your thoughts in comments.

 

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I once witnessed a first-time entrepreneur pitch his very early stage startup, vision, and product with so much passion, precision, and authority to a well-recognized Global consumer goods brand that the CIO agreed to a POC (proof of concept) even before the entrepreneur finished his 30-minute pitch! For a large multinational to take this leap of faith was no small feat – especially considering the relatively early stage of the startup. I knew the product was revolutionary and the vision was indisputable, so at the time, I thought that success was also inevitable. However, as I facilitated more conversations with other CIOs and the entrepreneur started sending his newly-hired salesperson in his place, I saw the salesperson flounder time and again: he was unable to secure follow-up meetings, let alone win POCs. Clearly, a revolutionary product and grand vision were not enough: a carefully crafted and delivered sales pitch is a very critical component of the sales process.

Through this and other such experiences, I have started identifying the differences between a great sales pitch and a mediocre one. At Lightspeed Venture Partners, I have the privilege to coach our portfolio startups on their go-to-market strategies and connect them with CXOs from Fortune 1000 enterprises. The smallest of differences in the sales pitch alone can be the difference in getting a POC right after a meeting or getting punted for a “let’s stay in touch” (read: I’m not interested) treatment.

Whether you are a first-time tech entrepreneur trying to land your first deal, an aspiring business development candidate, or a seasoned sales leader, I hope this series can help you land your next customer (and many more). While a sales pitch is both an art and a science with a splash of your genuine personality, I believe that several common characteristics are almost always present in a successful sales pitch. Over the next few months, I will break this topic into several blog entries, broken out by the sections that I think are critical in getting to a Yes:

Preparing for your (first) sales meeting: The more work you can put into preparing for your pitch meeting, the better your odds will be of success. Pitch preparation ranges from researching the company to personalizing the presentation for the prospect to understanding each individual’s pain point, as well as understanding the politics among the key stakeholders.

Pitching effectively: I break down a successful pitch into three key sections and discuss how much time to spend on each section: Introduction & Qualification, Company & Product Overview, and Demo & Discussion. I will also offer some specific best practices every salesperson should know.

 

Following-up effectively after the pitch: Here I’ll share some thoughts on the appropriate follow-up techniques, timing, and approaches.

 

So let’s get started: You’ve worked your network, leveraged Google and LinkedIn, and attended industry conferences to turn those cold leads into warm ones. Or perhaps, your top-tier VC has helped facilitate a meeting with a prospect. Regardless of how you arrived here, congratulations on finally landing that elusive initial prospect meeting! Now, the most important part of the process starts: preparation!

The Most Important Part of Your Pitch Happens Before Your Pitch Even Begins

Preparing for your meeting

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” – Abraham Lincoln

Preparation is arguably the most important part of the sales pitch, yet many salespeople stumble out of the gate and effectively lose the sale before getting to a demo. If you think that you can use your pre-packaged pitch deck that Marketing put together last year, your chances of winning the deal are no better than betting on a random horse at the Kentucky Derby. Below are some of the best practices I have witnessed and preached to my teams to effectively prepare for a sales pitch:

Research, Research, Research

Before you walk into any sales pitch, you should understand your prospect’s business model (how they make money) and their key initiatives. Depending on how deep your product penetrates the company, and how many stakeholders are involved, you’ll want to spend anywhere from a few minutes to several hours understanding the company’s business. At Deloitte, we often spent several days fully understanding a client’s business model, industry, and competitive landscape before an initial sales conversation or a new project. Conversely, at E la Carte, I started out spending several hours to understand the customers’ financials, missions, and business models but I quickly realized that I never engaged in those discussions with my prospects. So I shaved off preparation time by focusing on researching specific topics that IT and operations executives were focused on (e.g., new menu items, promotions, other vendors). If you’re unsure, err on the side of over-preparation and then fine-tune as you learn more.

Understand the personalities and the political landscape

There are many great books on identifying the Decision-makers, Influencers, Buyers, Champions and specific sales tactics. I think you should read them. A particularly good book for any up-and-coming entrepreneur or salesperson is The Challenger Sale: Taking Control of the Customer Conversation by Matthew Dixon. Equally important is understanding the interpersonal dynamics of the group: Do they get along with each other? What are the team dynamics? Who is the unspoken leader? Who can break or make your deal? Who is friendly and has enough influence on the group that you can try to win over? If a VC is facilitating the intro meeting, you can ask the VC for this info. If you’re self-sourcing, get creative in finding the information beforehand. Salespeople at your prospects could be invaluable sources of information because, well, let’s face it, salespeople love to talk! If you’re unable to gather this information beforehand, you can still gather critical information on people’s working styles and relationships by paying attention to their body language and verbal cues.

One of the best books I have read on the topic of identifying work styles while in a meeting is People Styles at Work…And Beyond: Making Bad Relationships Good and Good Relationships Better by Robert Bolton. The beauty of this approach is that you can easily identify a person’s work style within 30-60 seconds of talking to him and adjust your own style to complement his. This can be extremely useful – especially if you’ve never had an interaction with the prospect before. You waste valuable time and lose the sale if you talk numbers to an “amiable” or give an “expressive” only two minutes to make his point.

 

Make it easy for your prospects to buy

You probably have a pretty good understanding of the potential use cases for your product. When delivering a sales pitch, you should always understand which use cases are most relevant to your specific prospect. Drive your presentation to address these use cases so your audience can relate; make it easy for them to buy your product rather than trying to sell it to them. One of the best pieces of advice I received was from my first boss at The Toronto Star, where I started selling newspaper subscriptions door-to-door at the age of 13: “People hate being sold to but they love to buy, so figure out how to get them to buy what you have.” Although I probably never put this advice into practice at the time – my frail frame and raw enthusiasm were likely more persuasive to people answering my knocks during dinner time – this is a truly important principle to keep in mind and utilize during your pitch. At E la Carte, when I first made contact with the Johnny Rockets team, I tried to sell them on the standard use cases that we’d established and sold to many of the other accounts. It was usually a matter of finding out which of the four to five key benefits mattered most to them and then focusing on that key benefit. However, none of those use cases resonated with Johnny Rockets and my sales pitch not only fell flat but I practically killed the opportunity. By chance, when I re-engaged with another team member six months later at a conference, I probed into the specific use cases that could be applicable to Johnny Rockets and found one that was so obvious that I’d completely missed originally: replacing their classic but aging jukeboxes with digital jukeboxes integrated into our product. And voilá, we were off to the races!

Prepare for every meeting – not just the initial meeting

If you have prepared well in sharpening your axe, cutting that tree will be much more efficient. And by the way, you should prepare for every meeting with your prospect, not just your initial meeting. At E la Carte, for example, after we successfully re-engaged following my initial outreach blunder, we were in a very competitive battle for Johnny Rockets’ business. We knew it would be a long slog for either startup to win the deal so we could use any advantage we could get. As I prepared for our mid-POC review, I came across an article introducing Johnny Rockets’ new menu items. With the help of our Product and Engineering team, we incorporated those new items into my presentation and showed the Johnny Rockets team how the new menu strategy would fit into our product. The client was impressed that we not only knew about the changes but also were able to speak to them, whereas our competitor had not done so. These seemingly small tactics helped us win a multi-year, multi-million dollar contract, even though our competitor had achieved comparable or better results on some other key criteria.

Preparation is an important first step. But you must also pitch effectively and capture your audience. I will discuss specific strategies for pitching effectively in my next post.

“By failing to prepare, you are preparing to fail.” – Benjamin Franklin

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One of my favorite things about the tech industry is that reputations and relationships matter. Unlike Wall Street, or Hollywood, people in the tech industry pay it forward and treat each other well.  This isn’t just Northern California touchie feelie; life goes in cycles and startups are a repeat game. We will all see each other again if we hang around the valley long enough. The path that led Aaron Batalion to join Lightspeed as my partner, focusing on consumer investments, is one of those relationship driven stories.

My first job out of college was at McKinsey in the Sydney office. A few years later my boss there, Charles Conn (who now runs the Rhodes Scholarship program), left the Firm to found CitySearch, a first generation online cityguide business. I didn’t know anything about the internet, but I knew that he was a very smart guy, so I called him and asked if I could come. He said yes, so I found myself in Los Angeles during the first internet boom. It was 1996, so within 6 months anyone working in the internet was a relative expert, and I’ve been working in consumer tech ever since.

One of my bosses at CitySearch was John Pleasants, who was later CEO of Playdom, one of our portfolio companies, and sold it to Disney. But in between he was CEO of Revolution Health, and he introduced me to Aaron Batalion and the other founders of Hungry Machine when they left Revolution to go out on their own. These are some “smart and scrappy founders” he told me, keep an eye on them.

AB

A year later and the Hungry Machine team had one of the top apps on Facebook, a social network for book lovers called Visual Bookshelf. I loved the team and what they were doing and would have loved to lead their A round, but I was on the board of Flixster, a social network for movie fans, and the potential for future conflict seemed high. So we didn’t invest but kept in touch and I tried to be helpful.

Another year or two passed and Hungry Machine had become the biggest publisher on Facebook through a network of top apps, including Pick Your Five, the biggest single app on the platform. Again, I loved the team and what they were doing, and would have loved to lead their B round, but I was on the board of Rock You, a competitive publisher of Facebook apps. So once again we didn’t invest, but kept in touch and I tried to be helpful.

Another year or two passed and Hungry Machine had become LivingSocial, a local daily-deals website that was growing very fast. I still loved the team, I once again loved what they were doing, and this time I had no conflicts. We were able to invest!

Over the next four years I worked closely with Aaron and his cofounders as LivingSocial rode out the ups and down of the local daily-deals space. We worked together through good times and bad. I got to see him in all conditions, from trying to keep the site up through incredibly growth to making tough decisions about cost reduction, from finding clever new channels for customer acquisition to piloting new product lines at lightning speed. And throughout I saw him live and exemplify LivingSocial’s core values, (i) Make strong moves, (ii) Recognize others, (iii) Surprise and delight, (iv) Live hungry and (v) Champion good ideas. Aaron was not an introverted CTO. He was certainly incredibly strong technically, but he brought business, product and culture insights to the boardroom discussion that had a major impact on the way the company was run.

Three years ago Aaron moved to the Bay area, and eventually he left LivingSocial, planning to start another company. In the meantime he did what he does best, help other people. He became an in-demand advisor and individual investor in other startups, sharing the lessons learned through his own founder journey. He and I spent more time together as he pondered what his next startup would be. Eventually he came to realize that he was enjoying working with other founders more and more, and that he wanted to turn that into his profession.

When Aaron made this decision, a number of firms wooed him to join their teams. Happily for Lightspeed, the time that we had spent together over the last few years, and the way that Lightspeed has remained a supportive and involved investor in LivingSocial, in good times and bad, gave him a real comfort that he would find a cultural fit with our team. And so we’re so thrilled to have him join us, an overnight addition, seven years in the making!

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By: Will Kohler and John Vrionis

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http://datos.io/

We are thrilled to be partnered with Tarun and Prasenjit, founders of Datos IO, who just announced their Big Data recovery solution for customers of scale-out databases such as Cassandra and MongoDB.

Early …

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SaaS is no longer a new business model. One look at any of the market maps for marketing tech, sales productivity apps, HR tech or other functional areas within enterprises would tell you how crowded these traditional enterprise software landscapes …

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Today we are excited to announce Lightspeed’s $10 million Series A investment in Rubrik. Just as Apple built a time machine to protect Macs, Rubrik has built a powerful time machine for enterprise cloud infrastructure that unites data management with …

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Highfive will change the way we work together

Arif Janmohamed, Partner, Lightspeed Venture Partner

highfive

“Please enter your 9 digit meeting code and hit pound.”
“Sorry, that passcode is incorrect.”
“Please enter your 9 digit meeting code and hit pound.”
“At …

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Prescient words from the CEO/Founder of Nutanix, Dheeraj Pandey . . . he wrote this almost 4 years ago and the future is turning to look a lot like what he predicted . . . .

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Why Nutanix, and

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Today we are excited to announce that Lightspeed Venture Partners is leading Guardant Health’s $50M Series C. For the last few years, we have been closely following advancements in genomics that have brought down the cost of sequencing the …

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Today we are excited to announce that Lightspeed is leading Clever’s $30M Series B. When we first met the founders Tyler Bosmeny, Dan Carroll, and Rafael Garcia, we were blown away by both their vision for transforming education and the …

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