How Big is the Problem You’re Solving?
In a new survey by Inc, it’s estimated that 42% of software startups fail. This means that as a salesperson coming in to scale a new product, you have almost a 1 in 2 chance of joining a company that will fail.
The cause is very simple- your product is not solving a big enough problem. No matter how great your dev team is or how much money you’ve secured, if you don’t have a large, addressable market with need for your product, you will fail.
As a salesperson that has had the experience of selling a product that didn’t meet a market need or solve a large scale problem, nothing can be more frustrating. You’re prospecting your ass off, getting people to discovery only to find out you just don’t have a compelling offering.
Management might tell you it’s your fault, that you aren’t selling it correctly or hard enough, and that there are plenty of people you should be able convince to buy your product (whether they really need it or not).
The company might be able to pivot, but it requires changing the management team’s strategic direction and abandoning the original plan, which could take years and money and time the company doesn’t have.
How to Avoid This Situation
To avoid this situation, take the following steps before you join the company. If you’ve already joined, note this as a valuable life lesson and try not to let it happen again.
- Figure out who the company’s potential clients would be and find a contact that there that would evaluate the offering. They know the industry, the problems they face, and whether or not this potential offering would help them
- Ask existing or previous sales reps there about how clients have received the offering. Also, are they meeting their quota?
- How many clients are out there that would buy this offering? Harder to ascertain, but easy to run some quick calculations based on available territory, target companies in each sector, etc.
- Find out what the deal size is and multiply that by the number of companies
After you run the numbers, are you looking at something small or significant?
- Less than $1,000,000- very small
- Between $1,000,000-$5,000,000- small but potential for promise
- $5,000,000 and $10,000,000- great potential
Selling a new product that solves a big problem with a big market size will ensure your sales success.