B2B SaaS Sales: How One Daily Habit Took MRR From $230 to $10K

0:00Good afternoon, micro comps. Hope you had a great lunch. All right, so today I'm going to be talking to you about engineering your sales machine. Now, when we started the conference, we kicked off with our why. Why do we wake up every day in the morning, do the hard things we do? Now, my why is not my cat.

0:22It's my family. Here's my wife and my two kids. We live in beautiful Copenhagen, Denmark. you're welcome to visit, come by. Um, and it's through learning how to sell and building sales machines that I've been able to afford my family some financial freedom and flexibility. So therefore, this is a really personal topic for me because getting into sales, building sales machines, learning how to sell has given me the thing that's really important, which is stability for my

0:50family. Now, we're going to go through this in a little bit of an autobiographical way when I talk about how to build a sales machine. And I'll be sharing my experience of how I've learned sales from working in sales teams at Facebook, AWS, the businesses that I've created and also my experience with failure as

1:07well. Over the last six months, I've also been a tiny seed mentor. I've spoken to a few of you in this room and a lot of this talk is actually inspired by the conversations I've had with founders over the last few months. We're going to talk a little bit about, you know, my journey, how it relates to

1:24you, of course, some checklists. There'll be some real life examples, some data, maybe a few jokes in there. And from it, you're going to learn how to engineer a sales machine. Are you ready to talk about sales? All right, my favorite subject. First, let's kick off with this cover. Does anyone remember this 2006 Business Week? All right, so the com era had o was over. There was a big lull in

1:52the tech industry in the early 2000s. And then around 2006, this came out. It was all about Kevin Rose, the founder of Dig, who created a a website where you could share links, a bit like Reddit. Reddit was their main competitor, but Reddit ended up being a lot more successful than Dig. I saw this article and I was like, I need to quit my boring consulting job in the city of London and I need to start a startup. So, this is

2:14where I started my journey. I created a an online news site, citizen journalism website called Scribbleheet and was written about here in TechCrunch and it allowed people to write blogs and articles a bit like Medium exists today and I thought I'm going to go out there and create this huge success. Less than a year later, we wrote our own obituary here in TechCrunch after the

2:38failure of the business. And so after this failure, I was thinking to myself, okay, it wasn't clear to me what to do. I need to figure out what should I not do if I want to, you know, build a sales machine and have success. So my first lesson was don't create a business with an adupported business model because this

2:59was an adupported business model. But sometimes it takes a while for people to actually learn from their mistakes. So I actually created a second business with ads supported business model which was a job board. Has anyone created a job board before? Jobboard. It's like a common one that everyone wants to come up with. Anyway, this one failed pretty quickly, too. But I also learned a second lesson here when not building a sales machine, which is don't go into declining markets. This is actually a declining market because we were doing a job board for political and nonprofit agencies. And the market was not so good and it was declining. So,

3:32that business didn't work out either. But then someone gave me this interesting idea actually that if I wanted to create something that would work, I should call into the market and try and extract some ideas from the market. So I first started calling property managers and asked them, okay, what's your problem? How can I help? Can software help your problems? They said, can you come up with some software that helps people pay their rent on time? I said, not sure I can do that. So then I went on to a new market, started contacting roofers, people fix roofs, and I said, what's your problem? How can

4:01I help? And um most of the time they were actually on people's roofs so they actually didn't want to have a phone conversation. So I was unable to come up with software for roofers. But then I finally came on to financial advisers and they said yeah we got a problem after the 2008 financial crisis. We kind of needed to have a better understanding of our clients risk profile and we

4:21should create some software around that. So I created a company called Pocket Risk. Around this time actually, this is when I got into the microcom community and started to learn from Rob and Mike Taber and others on how to build a software company. One year into the business, I'd quit my job and it wasn't doing so well. I had about four customers, $230 a month in recurring revenue. I' done about 46 sales demos and I'd spent about $39,000 on my living and business expenses. So,

4:51it was not this was not a side project. It's like a full-time thing I was working on. So this was not going so well. But then I started to learn from that mistake and say what was the issue that I was having with pocket risk. The issue is that actually I wasn't really speaking to customers very often. As you as you saw in the previous slide, I

5:10spoke to about 46 customers in a year. So it's like you know less than one a week and I had to change that. So my epiphany was like why don't I try and speak to a customer every day and maybe that could change my whole sales process. So two years later um we got to about 137 customers. Did about 10,000 MR. I did about 384 sales demos and of course we became break even sustainable. It started to work. It was like kind of working. I was quite pleased with myself as you can imagine. Uh and the only difference was that I just tried to speak to a customer every day. Apart

5:44from that I did the same thing every day. I did sales demos. I got leads in. I spoke to the customers. Tried to solve their problems and I closed them. And if anyone wants to talk about how to do webinar demos and the whole sales process around that, I'm happy to talk offline. I just repeated what worked and then about 5 years later, the business was acquired. Here's me signing the uh asset purchase agreement here with my daughter. I thought I'd try and get into entrepreneurship at a young age here on holiday. It came through and uh yeah, we signed the paperwork. You can't see the

6:15acquisition amount in that. So, but we're looking too close there. Um, and so I learned another important lesson in building a sales machine, which is that you shouldn't give up too soon. Um, this is actually one of the first businesses ideas I actually stuck with for more than 18 months. And it was that ability to stick with it. The fact that I didn't give up after a year that

6:34made it more of a success. So now I had a win under my belt and I was thinking, what am I going to start next? Now I wanted to do a new a new business because I just love creating businesses. It's a lot of fun for me. It was 2017 now and I was thinking hm what is a good hot market to go into

6:56crypto. So I said let's create a business around crypto. So I end up creating a digital marketing agency for Bitcoin and blockchain events and I'd help people essentially just sell tickets. This business was in a hot market so it did well pretty quickly. We had about 44 customers in the first year. Did about a million dollars in sales. Uh and it was very profitable as well. About 8,000 profits. Um I ended up selling my share

7:24in the business to some partners. But something interesting happened which is that of course Bitcoin crashed and uh the people I sold the business to while my partners were like, "Oh, we're not so happy about this thing, John, because we've gone down in customers. Revenue is down to 240. It's not really working so well." And then I learned of course another important lesson in this journey on how to build a sales machine which is don't get too stuck into unsustainable hype cycles um when starting a business

7:51and wanting to build a sales machine. So at this point now I've been building businesses for about eight years and I wanted to try and find a better way to you know just make something really work and build a sales machine. Yes, pocket risk had worked but I wanted to try and do more for myself. So I came up with this question, you

8:11know, how do I engineer a sales machine? How can I find a way to print cash and grow my businesses faster? Taking the lessons I'd learned in the previous eight years, I decided to focus on businesses and industries where it was B2B subscription, there were growing markets, where I can speak to a customer every day, where I'd stick with it for at least 18 months, and where I had a

8:34sustainable customer base. I came with a checklist with a very easy to remember acronym here. PCBCQTPSR. I actually said that. That's cool. Um, and let's go through it. Okay. So, the most important thing for me and for you when building a sales machine is the personal wherewithal. Can you actually stick with something for long enough to make it work? My experience is that it takes about 18 months to really

9:01get something really, really working. And so you should have that perspective. Commitment for me means at least working something seven hours a week um and willing to put some actually money down on the line as well. Second, can I speak to a customer every day? That's what I always try and do with my businesses because I find good things always come from speaking to customers, not from researching or reading different topics on the internet. I like growing markets because I've really struggled when I'm in flat or declining markets. Pocket risk was a good example. Although the business sold and it did well, the financial advisor market was actually

9:36growing quite slowly, like 5% a year or so. So, it was still a bit of uphill, there was no tailwind behind me. Fourth, you always have to have a compelling offer. So, I want to have something that's at least 10 times better than the dominant alternative in some vector that customers care about. I want to be quick to demonstrate value. So when I build a product, it should be easy once a prospect sees it to see that it's valuable for them. You know, in less than 30 minutes, that's like a demo time or ideally they should know the

10:08value in seconds. Now, continuing, there's a challenge of traffic of course and distribution, which we read about all the time on Twitter. Um, yeah, somehow you got to find a way to build traffic and we'll speak a little bit more about that later on. Product, does your product actually surpass customer expectations? Does it work effectively? Um, a lot of founders spend a lot of time thinking about acquisition models and how should I get customers, but the actual product

10:36underlying it is not very effective. Number eight is the sales math. So, I learned this with Pocket Risk actually, which was a bit of a challenge was that our product sold for I think our average customer was paying something likeundred $190 a month or so. So, we were kind of below this $300 per month limit that I've got there. But, it made it hard to hire sales teams and actually scale the business because the lifetime value of a customer was kind of too low. Now, I just go by the rule of thumb. If my product is less than $300 a month, then I need to use content marketing to make

11:10it grow. And if it's more than $300, then you can have a sales team. And lastly, referrals. Do I have a product that people actually want to share with the people that they know? I thought it'd be helpful to actually show you some examples rather than just sticking with theory and we'll go through a couple companies of products that I actually use and a little bit about their sales machines so you can

11:32understand what I mean in practice. First we'll start with card. Anyone familiar with card? Any hands? Yeah. So card is a uh onepage website designer app where you can create a a web page with just one page. It's mostly used for personal branding or designers might use it to show their portfolio and so forth. It's created by uh a guy called AJ semi anonymous on Twitter. You can check him out based in Nashville. He tells people

12:03where he lives but doesn't say his name. Uh and he's the founder of Cart. So let's look at his sales machine here that he's created. I went through all his past blog posts and all his interviews and wanted to try and give some information for you here so you can get an idea of how people scale their

12:16businesses. All right. So, he's doing about I think about just over $2 million in in ARR. Uh it started off as a side project that he ran for three years. Uh but it was very quick to get to $1,000 in MR. What I've learned is that you tend to stick with things when you get customers quickly and usually like $1,000 a month. At that point, it's not really an experiment. It starts to become something real. Below $1,000 a month, it's still in the experimental phase. Do people really want this? Do they churn? Do they like it? That tends to be a tipping point for many founders and it was uh for AJ. Um

12:51he was speaking to customers every day on Twitter. I think he was a designer originally. He used to make different templates. So he had a small following but not a huge one. But he used Twitter every day to speak to his audience and that's what got him some traffic. Uh he had a very um decently growing market. It was probably over 20%. This is the whole personal branding have your own website uh space which has been doing well recently. and uh he had a very compelling offer. I don't know if you've tried to create like a onepage website where you want to just put on, you know,

13:21your name and some information about you, but it can be a pain. I've tried to do this with WordPress and all the other platforms out there. Even using something like Ghost, it's still a pain, but this is very easy to get going and so I had a very compelling offer, quick to demonstrate value. What he was able to do is smart is that you can actually use his product without signing up. So, there's no sign up. you only actually have to sign up when you actually save your website. So, it gets people in the app very quickly and that's what he's used as his way, his

13:47kind of premium approach. Uh, going back to what Patrick said earlier today. Um, he's mostly used Twitter and a little bit of product hunt, but not much and the whole building public uh approach in order to get customers and I think obviously Arvid's a big supporter of that. What was challenging about his business though was his price. He charges his average price is $19 a year which is one of the cheapest software products you'll probably see. Uh and that's why I think it took him you know three years before he consider it not to be a side project. Um but no one wants to compete with him

14:22because he charges so little. So it's actually end up being a kind of a defense or a kind of moat because of the price that he charges. But he he didn't know it was going to work obviously going into it. But it's worked out to be quite a good approach. He actually has a lot of add-ons as well, going back to what Patrick said earlier, in order to increase the lifetime value of his customers. And websites of course are naturally referring. So every time someone builds a cool website using his product, they tell their friends about

14:45it. So that was his sales machine. This is another one. Give you another example. Screen Studio. Anyone seen this one? This is a new one coming out. So this is run by a guy called Adam based in uh in Berlin, Germany. He's originally from Poland. and he's created a you can say the product what it does is like a desktop recording for product demos. So you can kind of record your app and do a

15:08little demo about it. Um similar approach actually to AJ where he has focused on building in public tweeting about every day talks about his bugs and all the different challenges he has actually building the software. That's how he's been able to attract a lot of uh customers. He started it in September so not long ago uh and he's

15:27getting quite a lot of traction already. He's got a onetime fee product though. I'm interesting to see how that scales, but so far it's working well for him. Uh his secret weapon is that videos are naturally referring. Every time someone makes a video about their product, of course, they want to share it and everyone wants to see how this wants to

15:42know how this product was actually made. So that's really helped his growth. So now you get a bit of idea of how we do these these kind of sales machines. But you can see a lot of it when you especially when you charge less than $300 a month, a lot of it is based around content sharing and content

15:56creation. All right. Now I'll talk a little bit about what I'm working on here in the same model. So this is a product I've been working on for about three four months. It's called Rapid Reply. It's an AI email assistant for business owners and founders. And the goal is just to help you get through your inbox quicker. So this is actually a good example because I'm actually right in the middle of it now. So I can actually show you and kind of tell you what I'm actually doing. So um we got like a handful of customers. You see we're doing like $300 in AR. So we just got started. Um it's a

16:24side project for now. I spend about seven hours a week on it. Uh, and I'm speaking to customers probably probably every day, sometimes every second day. It's quite easy to get in front of the customer base because they tend to be on Twitter and so forth. The the offer the the market now this is where it gets interesting. Earlier when I said, "Oh, Bitcoin was an unsustainable market." So, this is now using generative AI. Is that an unsustainable market? I thinking it's going to persist more than than cryptocurrency has simply because of the

16:52productivity gains. But, we'll see. there's a chance that this is a hype cycle and it doesn't work out, but I'm minimizing my investment whatever to seven hours a week and not more than 20k. So, for me, I don't see it as a a big loss if it doesn't actually work out. It's still in the experimentation phase. Once it gets to more than, let's say, $1,000 a month, then I might consider it something that's really worth um digging into. Um the one challenge we do have though is that our product is a little bit unproven. A lot of these AI tools, they're not great at some of the the text generation and they

17:23need to be tweaked a lot and you need to tune them. So, they're not perfect. You've seen Chat GPT yourself. The jokes are terrible and so are some of the emails it comes out with as well. So, um that has to be worked on. The product is kind of naturally referring. You've got the, you know, you know, powered by

17:38rapid reply in the bottom of the email. So, that kind of helps some of our referrals. But this is how I'm going about it. I think our secret weapon is most likely to be the referrals. kind of powered by and the fact that it's premium that you can actually get started uh without paying for the

17:53product. Now, we've talked a lot about building the actual sales machine itself, but what about engineering yourself in order to be successful? How do you, you know, manage the uncertainty uh with confidence when creating a sales machine? Well, what I tend to do for myself is create a box. I like to put myself in a box when I want to actually get something done. So, let's say, for example, you're building a new way of doing sales demos. You want to send leads to your website, do a webinar demo and a phone call or video call, and then you want them to end up closing and buying your product. Well, you know, if

18:29I was to go about this kind of project, what I would do is I would set some allocated time for it. Make sure I'm only doing one product at a time, one project at a time, and then I'll find out some kind of benchmarks that work really well. So, I understand what is success or what is failure. In my case, I've done so many of these demos, I just know that, you know, I need to be closing at least probably 30% of the calls that I get on. Then I'd have some budget, tell people about it, and get going. And that's how I go about kind of

18:54building these sales machines. But mostly, it's actually about reps. Um, when it comes to sales and sales machine is if I could if you could do one just one thing, it's just speak to more customers more frequently and that will solve all your problems because it's with that information that you'll know how to steer your product and

19:11improve your messaging. But coming towards the end of my talk here, I want us to go back to the machine. And I know we all like kind of formulas and simple ways to uh to understand things. So I thought I'll try to write some PHP. I didn't I didn't quite define the variables, but let's see if we can uh figure this out together. So if your commitment is less than 18 months, uh and you're afraid of customers, you should probably just quit. Um, if your market is growing less than 20% year-over-year, you might want to find a new market. If your if the dominant alternative is uh less than 10

19:45out of 10, then build a product where they're not so good. Focus on that. If your average revenue per user per month is less than $300, do daily content marketing. Else, do daily outbound. And of course, don't forget to have fun building your sales machine. Thanks for listening. [applause]

20:07All right, we have time for a few questions. Alex. All right. Yeah, Tracy, I'm coming behind you. You can throw the box. Hi, John. Thanks for thanks for talking. Um, you mentioned working on a product for 18 months. What happens if you realize like what are the signs that you should quit before 18 months? If you've got no motivation to work on the on the project, if you've been working on it for like three, six months and you still don't want to, you can't get up down and do the work, then there's something wrong. That's there's something wrong with you where you don't want to commit to the project. So then

20:47that's what I'd investigate. Uh hi, uh thanks for the talk. Uh you talked a bit about the reps. Can you talk a bit about going from three reps and and larger? How you sort of manage that? Is that a head of sales role? Is that a sales manager or sort of your first rep that you promote? What what did you do if you're Yeah, I can talk about that. But when I said reps, I mean more like you need to put in the repetitions of doing lots and lots of sales calls. Uh hiring reps, I think founders should do sales pretty

21:16much all the way to a millionaire era. So I just think founders should just do lots of the sales calls. Um you can hire reps. Um it's complicated. Uh why don't we speak offline because that's a that's a long discussion actually.

21:35Hey John. Um, great talk. You talked a lot about going from zero, starting from something from scratch and how to build the sales machine over 18 or more months. What if you're at a plateau and you feel like you could reimagine or reinvent your sales machine? Do you just set a day zero and do everything that you just said or do you think anything

21:56changes about your advice? Yeah, I'll take the advice from CLA yesterday and speak to your best, most engaged customers and hear why they use your product, why they get value from, and try and find some information there to help you accelerate your growth.

22:17Other questions? Question in the back. Oh, okay. There we go. They got him. Who goes first? Maybe over here. Hi, John. I'm Antmanette. Uh, so you mentioned getting in the face of the customers a few times. Um, so how did you get in their face? Is it more of cold calls or cold emails or going to events that they attended? Like what worked best? Um, for me, people are not answering calls. I know I don't answer anyone calls. Um, [laughter] but emails, I have this email tracker so I can see if they're open the emails,

23:06but a lot of them don't open as well. And so, what was your best strategy in getting in getting in their face? Yeah, sure. Uh, first I use my network. So, I use my people I know in my personal network that could be customers. Then I use uh cold email. And I can show you the type of call email to write. I can actually show I think I actually might have a video about it on my

23:27website so you can check it out there. Um, and then DMs, people on Twitter talk about the problem that you have also even on Facebook DMs. Uh, that's been successful depending on your product. Even Instagram DMs can work as well. Um, so essentially I start with my network and then cold email. And then after that I start I do content. So probably YouTube videos as a way to get people in. Uh going to events could be helpful as well, but you're only going to get a trickle probably of uh of potential customers on that

24:04basu. Uh so a lot of people know how to open. You can talk about features and things in your demo for example. I think more people struggle with how to close asking for the sale. So, do you have any either phraseology type of terms, phrases, things you use to ask for the sale that you might be able to share with all of

24:23us? Yeah, sure. Um, I tend to ask in the negative. So, I would say something like, um, is anything stopping you from going forward today? Something like that. Or is there any reason why we can't get going immediately? And, uh, then they usually say, no, let's do it. That's it. Pretty simple. Nice. Kind of not asking for the sale.

24:51All right. Any last questions? Looks like we have one more. Um, when you talk about meeting with a customer every day, I'm curious, are you meeting with existing customers to hear their feedback or are you talking like demo sales calls? Sure. So we can do it broad and just say any kind of customer contact every any any day is good. I like that because whether it's a support ticket or it's a sales demo or interacting with someone on Twitter, you just need the me the

25:26momentum of every day speaking to them. Of course, ideally it's better to be be a sales demo because that's likely to bring you more revenue. Um but any kind of content every day, you know, if you can't do a sales demo, then speak to someone on Twitter or do some customer support, whatever it is. I love speaking to existing customers because you find out why they're using a product of value. That's helpful for retention and positioning and attracting new

25:46customers. Thanks so much, John. John's gonna hang out this afternoon.