Authors: Bojan Stojkovski and Bogdan Iordache
As an early sales employee in a tech startup that has since grown to hundreds of employees worldwide, Giorgio Pontillo has a rare perspective on building sales processes from the ground up.
The startup in focus is the Czech network analytics startup, IP Fabric. Giorgio began his journey there as the 8th employee, leading the sales team and eventually taking on the role of global VP of revenue. His work helped IP Fabric raise a Series A, and then a $25M Series B round and expand to London, New York and Boston.
What is his “superpower”? After years in the industry, Giorgio now identifies sales shortcomings and turns uncomfortable tech founders into comfortable sales leaders. He’s the mentor tech founders may find challenging, yet also the one they rely on to help them establish a robust sales infrastructure.
Selling Value Versus Selling Features
“You can’t have a techie pitch if you’re looking to sell. You need to have a sales pitch explaining why customers need your technology, or what the problem you’re trying to solve is.”
Pontillo always emphasizes the distinction between a tech pitch and a sales pitch to tech founders. He recalls a situation when he first heard the pitch from the IP Fabrics’ CEO.
“The pitch was a pretty techie one and it focused only on the features. And I was thinking, but what are you bringing to the market? You don’t bring features – you should bring value. Why should customers buy your product? And while we are at it – do you know who your potential customers are?” Giorgio explains.
Soon after having this discussion with the CEO, Giorgio joined IP Fabric and began creating the structure for their sales process, as the first step. He also began noticing common sales mistakes tech founders make. Selling features instead of selling value is one of those common mistakes. Nailing down the ICP is another one, he points out.
“The ICP is the most important thing for a startup to consider. Most of the time tech founders don’t know with whom they should talk. Maybe they know with whom they are talking, but they don’t know if these people are not the right people to talk with. Often, they don’t realize that they are not selling to the tech people and that they have to sell to someone that’s more business-oriented.” he says.
How do you explain this to tech founders in a way that resonates? For Giorgio, while this road is not an easy one, he enjoys taking it. Most tech founders have an engineering background, meaning they need to see the data before placing their trust in something.
What about the business-oriented founders? According to Giorgio, they can often prove much harder to work with, mostly because they believe they have everything figured out. As he says, this oversight can happen mostly due to their lack of experience, especially if they are at the beginning of their entrepreneurial journey.
Improvement Requires Measurement
“The sales process is a lot about the culture, and a lot about what the product does – it’s many things together. Still, it’s not just art, and there is science and data behind it.”
Giorgio is very strict when it comes to running the sales process. Among the first things he tells the startups he mentors is that data is the key to building a healthy sales infrastructure.
“I do an assessment that is based on various criteria, such as pipeline velocity, customer time to value, customer expansion, revenue operations (RevOps), sales numbers target, do you have a sales team or not – there are many things that I’m analysing,” he explains.
At the same time, he encourages founders to conduct their own self-assessment, which he then compares with his own findings. Typically, this also marks the turning point where founders understand the disparity between their perceived sales process and its actual implementation.
“You often hear from founders, not just from the tech founders, but also from the business-oriented ones, that the truth is in their minds. This is not good enough. Any company that is looking to raise money or wants to grow and expand globally, can’t rely on what’s in the mind of the founders, you need to write it down. You need to change that behavior right from the start.” Giorgio explains.
This means that founders need to adopt a process-oriented mindset, where they meticulously track every detail of the sales journey.
“You can’t have a sales team that doesn’t track the pipeline in the CRM. Your CRM is the mirror of how the company is doing, and how the salespeople are performing. And the steps need to be clear for everyone in the sales team,” he adds.
What comes next? It’s essential to clearly define the message you want to convey to your sales team about what you’re selling.
“You want to create a playbook that tells whoever you’re going to hire for the specific role – this is what we do, this is what we sell, these are the values that we bring. This is your job, this is what we expect you to do, and this is how you do it,” Giorgio is adamant.
Building the Right Sales Team
“I’d rather prefer the founders to sell the product for less of its value than to hire someone that promises them relationship-based sales.”
You’ve got the product, the sales process, and the perfect message. Now, how do you choose the right people for your sales team?
Ideally, your initial team members should be capable of handling all aspects of the sales cycle, from business development to account management and customer success. At IP Fabric, the early hires juggled all of those responsibilities simultaneously.
“They were the top performers at the company, even when the jobs were separated and there was a distinct business development team, a customer success team, and a sales team. Why? Because they knew exactly what the customer was searching for, and they knew how to treat customers, even after they made the sales,” Giorgio explains.
The most common mistake that founders make in this stage is hiring someone that promises relationship-based sales.
“Today, no one is going to buy technology because he’s a friend of yours or because you sold them something five or 10 years ago. The people promising this are not selling value. They’ll say that they will sell the product, but the only thing they’ll actually do is blast emails to all of their contacts, saying “I work here now, please check out the demo”. And that’s not a quality process at all,” Giorgio says.
Data and metrics help founders tell the good salespeople from the not-so-good ones. When you have a CRM and a pipeline, you can evaluate salespeople based on how many promising opportunities they bring in and how those opportunities progress.
“Let’s say that you have five stages – you measure how these opportunities move across from stage one to stage five. What’s the conversion rate between the stages, and how much are we closing at the end. Because the only thing that counts in the end is the revenue,” Giorgio points out.
Thus, you have to set the right expectations across the whole company, sales team included. If your company operates under a KPI-driven model, consistency is key. Failing to maintain this consistency can result in culture fragmentation, fostering a culture of excuses rather than accountability.
“If you say to the sales team that you have a yearly target and that by each month you expect to have a specific quota, then this needs to be the same for the engineering team as well. You need to have a company that rolls in one direction and that’s driven by the same culture. I often see startups that have three, four or five super fragmented cultures of how things are done. Then, you’ll have a team that will eventually start to use excuses for why they’re not achieving their own target,” Giorgio adds.
Moreover, synchronizing the tech and sales teams is also crucial for the success of any tech startup.
“These two should go hand in hand. I always encourage startups to have a product sync-up with the sales team at least once a week. In turn, they can be aligned on what they are working on, and what are the things that can be done better to close more deals,” he explains.
Improving the Product Through Customer Feedback
“Customer feedback is important only if it comes from the right customers.”
As the product evolves, some early-stage customers may not be aligned anymore with the ICP of the company, Giorgio points out.
“With IP Fabric, we had 23 paying customers in the Czech Republic. After nearly two years, only one of those customers remained, and they’re still there. Why? Because they were the only ones aligned with the real ICP of the company. Getting the feedback from the other 22 customers in terms of how the product should look like or what it should be, would only destroy the value of what the company was trying to build,” he highlights.
Thus, according to him, comes another common mistake that many startups often make, and that’s to run a demo for everyone. If you run demos for everyone, it consumes time and resources.
To connect with a wider audience, start by pinpointing your ICP. Then, concentrate on communicating with your core ICP first.
“You need to prioritize a certain ICP you are focused on, both in demo’s and actionable feedback. You might change the offering, you might change the price, or undersell. So, there are too many reasons why the ICP is among the important things that you need to figure out.” Giorgio explains.
Another crucial aspect is that sales people always need to sell the product that they currently have. “Most salespeople go into the market and take customer needs, come back and say that once those needs are delivered, they’ll sell the product. No – once you deliver those needs, it will take six months, 12 months or more – your customer needs will have changed already 20 times. Never sell a roadmap, sell what you have today,” he says.
However, in the earliest stages, selling a bit of vision helps – while that’s not a roadmap, it sets a direction for future development.
A robust sales process, a streamlined pipeline, and an ideal sales team – armed with these essentials, do founders still need to do sales? For Giorgio, it really depends on whether they are passionate enough to sell.
What he often notices as well is that after handling sales themselves at the start, most founders do prefer to hire someone who can efficiently grow their sales and manage a larger sales team.
Mastering Retention Instead of Accidental Sales
“Once you sell, the very next day you must sell again.”
Founders need to run away from accidental sales like hell, or at least try to prevent them, Giorgio says.
Sometimes, when an account executive wants to sell to a specific customer just because they have the budget right now, but there isn’t the intention for a long-term deal. This too, according to Giorgio, is an accidental sale.
“It’s not in my interest to sell today, and not to renew next year. If you want to achieve growth, this includes retention. Most early-stage founders think that retention isn’t that important, and they choose to ignore it. They would sell to someone who has the money to buy the product right now but won’t renew it next year. I would not approve such a sale. Since, as a global VP of revenue, my job would be on the line if next year we drop 10% of our revenue because of this single customer,” he explains.
Hence, that mindset needs to change, and founders need to understand that they should not be selling for one year, but prioritise deals that grow and expand.
“Then, you’ll have customers that don’t just buy your product for just one year. In turn, these aren’t accidental sales, but very much planned ones. There’s a project behind them, and there’s a much bigger budget to catch,” Giorgio says.
Once you make a sale, you have to start selling to them again the next day to keep them interested. Many founders find it challenging to understand that consistent effort and continuous customer engagement are necessary to keep the ball rolling.
“Every quarter we need to show you what the values that we’re bringing are. We need to show you the date for why the solution you bought makes sense. Every time we have a new feature and we have a new product to launch, we demo it to you first before it goes to the market. Then, you are engaged with us, you give us feedback, and you basically fall in love with us. We know that we can trust your feedback and we know that once we launch the product, you’re buying it,” Giorgio concludes.