How to shorten sales cycles the Silicon Valley way
One significant difference that makes Silicon Valley more successful than almost any other innovative region in the world, with similar resources and opportunities, is the attitude towards risks and failures.
This mindset of higher risk tolerance and no stigmatization of failure, is part of the Silicon Valley culture. Today we had a captivating two-hour presentation by our talented, famous and experienced mentor Julie Hanna (seen in the photo) on the whys and hows of successful startups in the Valley.
What makes Linkedin, Dropbox and similar tools succesful?
Can you imagine having a sales force with highly paid salaries and a sales cycle of anywhere between 6 to 18 months, only to sell an application for $70 per user? This is what makes B2B complex. As long as you are selling to large enterprises there is a good motivation to have such a sales force. But what to do with small and medium enterprises?
We learned, that in order to attract SME, we need to offer a solution that does not involve any investment in the beginning. Once the client find the value and gets addicted to the tool, they should be able to convert the product into a paid license. The term used in the valley is freemium. Even though this sounds simple, where should one draw the line between the premium and freemium versions?
The Linkedin example
Everybody can use Linkedin for free, but as soon as you need to contact people outside of your network, you need to upgrade to the premium version. Therefore, if you want to create a scalable business out of your product, you need to find a balance between the freemium and premium and define what is good enough to create addiction. This should be part of the freemium.
This is a simple rule to why a Silicon Valley-based company often becomes such a success. They create tools with freemium versions where a user can start interact with the tool and test it until they are ready to buy it. Simple as that. This approach will most likely shorten the sales cycle to maybe less than a month.
You don’t need to be afraid of somebody steeling your business idea. Remember that a business idea is only an idea, because everything is about execution and traction.
Stay tuned. We promise to publish more exclusive business advice on a daily basis.
/Falah Hosini and Dimitris Giannoccaro reporting from TINC in Silicon Valley