Close your door. Turn off your computer monitor. Sit quietly and look out the window. Now – ask yourself the following question: "How much time do I spend on the wrong things each day?"
Don’t bullshit yourself. Answer it as honestly as you can. 5 minutes? 15 minutes? 30 minutes? 60 minutes? 2 hours? 4 hours? More?
Now, turn on your computer monitor. Scan your inbox, even if it’s 4,137 messages (aha – I see you aren’t a zero inbox person of a GTD guy.) Bring up the weekly view on your calendar and look at it. Look at your todo list (if you have one).
Turn off your computer. Answer the question again.
Are you spending your time on the wrong things?
As Q408 stumbles to a close, I’m seeing a distinct trifurcation of sales performance among the companies I’m working with. I’m pleasantly surprised by the companies that are solidly outperforming their Q4 plan, especially since Q4 is the hardest quarter to outperform (since the plan is now typically great than 9 months old.) Some are fighting to get to their Q4 plan and some are going to fall short regardless of what they do between now and the end of the month.
This is in direct conflict with what you might think if all you do is read the newspaper and watch television. If this is your information base, you’d conclude that no one could possibly have a successful Q408. Not true!
That said, in all of the companies I’m involved in, people are being very cautious about Q109, even in the ones that are outperforming Q408. Anyone who has ever played the MIT Beer Game understands how multi-stage supply chains can mess with your mind (if you don’t have any idea what I’m talking about, grab three friends and play the online beer distribution game.) Every startup is now living in an extreme version of this with a severe bullwhip effect.
Sales organizations – and decision making around them, especially in the forecasting part of the cycle – are especially susceptible to this phenomenon. Since most companies are now working on their 2009 plans, paying special attention to this on the top line is especially important this year. While talking through this at one of the SaaS companies I’m involved with, I made the comment "give your sales people all the knives."
In the software business, we’ve been struggling for the past few years with the transition from traditional perpetual software licensing to subscription based licensing. Layered on top of this is the split between desktop software, server-based on-premise software, and SaaS-based software. All are valid deployment, sales, and pricing approaches although on some days of the week you’ll notice that religion takes over, especially when VCs tell you "we only are funding SaaS-based software companies" or "enterprise software sales is dead." Ok – whatever.
My solution is to give your sales people all the knives. I’ll be more specific in another post, especially since it won’t really matter this quarter. In the mean time, go play the beer game before you finalize your operating plan.
A CEO friend (who also is an excellent salesman) sent me a fun post titled Sales 101 with the comment "here’s one that will make you laugh in a sad but true kind of way." Yup – this pretty much sums up the dark underbelly of high tech sales. If you are a VP of Sales in a high tech companies, read slowly and see what you can do to improve the situation.
At the end of every board meeting I’m a part of we have a closed session. This is a session that includes only the board members. All of the boards I’m on include the CEO as a board member so the CEO is part of the closed session. If there are multiple founder / management board members, they attend. But – no observers and no members of management that aren’t on the board.
I was on a board call yesterday that was confusing. The company is doing well, the management team is very solid and stable, and the board packages are comprehensive and transparent. I’ve worked with the CEO for a long time and we rarely have any misunderstandings (we have plenty of disagreements, but we know how to talk through them.) The company is mature enough that we’ve shifted into an eight per year board meeting tempo; two meetings a quarter – one in person that is usually deeper and strategic; one by phone that is an update call.
When I got back from vacation on Wednesday, I read the board package. No surprises. There are no strategic activities going on for the company (no fundraising, no M&A, nothing "fancy") – just strong and steady execution. The tempo of the call started off a little odd – the CEO brought up some forward looking concerns of his. While he was describing them, I was having a hard time connecting what he was saying to the board package I had just read. As we went through the management team review of the business, I got even more confused as many of the tactical things we had discussed at the previous meeting had been done well and everyone sounded upbeat, although appropriately cautious. The CEO highlighted a few more concerns of his and then asked an open ended question – something like "what do you guys think?"
We were all on the phone so it was hard to read any nuance. I expressed my confusion. I asked a few clarifying questions. My confusion increased. Maybe it was jetlag, but my brain was just not connecting the dots. At some point the CEO took us in a different direction to try to address another issue that he was potentially concerned about. While the issue he raised had some short term issues, he had extrapolated it as a long term trend. I didn’t agree that it made sense to extrapolate the trend from one data point, made some suggestions, but felt the awkwardness increasing.
We ended the meeting and went into closed session. We all took a deep breath. I told the CEO I was confused. He was confused. The other board members on the phone were confused. If we had a giant time machine we would have gone back 60 minutes and started over. Instead, we had a great ten minute conversation where we realized that we were just talking past each other. We hit the giant mental reset button and in a few more minutes had recalibrated.
Even though we usually end after the closed session, this time we decided to bring the management team back in to clarify things. We realized that when we ended the meeting, we had a leadership team that was likely as confused by the meeting as we were. I imagine there was sixty seconds of discomfort while everyone gathered where they were wondering what was going to happen next. We had a short reset of the discussion, clarification of what the CEO was really trying to communicate, and reaffirmation that we were on the right track, even though this was a weird and confusing meeting.
I talked to the CEO today just to check in. We had a good call and we both reaffirmed that all was cool. He said he’d learned something important – that if he was just going to "think out loud" during a board meeting that he should preface this with a statement indicating this. I agreed that this was the right conclusion – that I’d much rather he "think out loud" vs. feel compelled to figure it out all. I also suggested to him that if he thought I was lost in space, he should just hit me over the head with a brick.
I’m really glad we had the institution of the closed session firmly in place for this board. It gave us room to figure out what was going on, where the miscommunication was, and reset the discussion. Without it I expect everyone would have scattered to go back to work with their confusion firmly intact.
I got the following email on 1/25/08. The Subject Line was "Naming Bathrooms."
Mr. Feld:
My name is A, and I am a Cadette Girl Scout who is selling cookies to fund my dream of becoming an astronaut. This upcoming summer, I am returning to Huntsville, AL, for Advanced Space Academy, an opportunity offered through Girl Scouts. I am not sure if my dreams will take me to ATLAS at CU (my dad is a professor there), or Cal Tech (and the Jet Propulsion Lab, where my dad is on sabbatical), or even to MIT, where my dad went to school (Course XVI, 1978-1987).
My mom says that it is too bad that MIT did not accept your naming a bathroom offer — she thinks that you should have offered to build more women’s bathrooms at MIT as they can be somewhat hard to find when you need them. She also says that while the Sloan School and other east campus buildings had adequate facilities, you had to plan carefully if your work took you to the Humanities or Science Libraries.
I am writing to ask if you would like to make a contribution of $2008 to help me attain my goal. This translates to approximately 618 boxes ($3.25/box), of which there are eight available varieties. Of course, that might be a lot of cookies, even if you distributed them amongst all of your companies’ employees as a business expense. Instead, we can donate boxes to your choice — EFAA, the local food bank that was started in 1917 to help the families of World War I soldiers in Boulder, or directly to our soldiers overseas.
The 2008 cookie campaign is now taking orders with the cookies due to arrive in mid-February. I would enjoy discussing this with you further (I have prepared a presentation as to how businesses can use Girl Scout Cookies). You may reach me at myemail.com or my phone numbers, 303.xxx.yyyy (cell) or 303.aaa.bbbb (home).
If you decide that your 2008 charitable support does not include Girl Scouts or that you have a Girl Scout who is already your supplier, thank you. I would appreciate a reply regardless of your decision.
I thought this was absolutely brilliant. I responded with:
A – thank you for writing me! I’m a big fan of the Girl Scouts and one of the organizations that I’m chairman of (the National Center for Women & Information Technology – www.ncwit.org – which is based at CU in the ATLAS building) has a partnership with them.
While I’m not interested in buying $2008 worth of cookies, I would be willing to buy 24 boxes (three of each type.) Tell me the best way to coordinate this with you.
My cookies showed up today and I got to meet A. She’s a neat young lady in high school who is learning to sell at a young age. Awesome. Her parents (I got to meet her mom also) should definitely be proud of her.
A humorous view on sales executives.
My apologies to all my friends that are in sales. I love each and every one of you. (Thanks for the link Tim.)
As SaaS companies start to mature and go public (there were several in 2007 and a flood expected in 2008 and 2009) there is starting to be some interesting discussion about the real economics of a SaaS business.
A new debt financing firm named SaaS Capital recently released a white paper titled Understanding the Financial Implications of the Software-as-a-Service Business Model.
My experiences don’t agree with everything they say, but I find it fascinating that there is now a dedicated SaaS debt financing company.
Following on the "sales" theme I received the following question yesterday from a regular reader.
Are you aware of any blogs that regularly deal with issues that arise when startups sell technology to customers? I am thinking of issues like:
If you are a VP Sales blogger (or sales guy (or gal – Amy made me say that) blogger) that is writing about this stuff, please leave a comment with your link. Wendy Lea – time to start blogging!
While I know a lot of entrepreneurs and folks in small companies read this blog, I also know that there are plenty of folks in big companies that do also. I ask those of you in a big company two questions:
In case you are wondering, these are rhetorical questions. In 2002, Niel Robertson sat down with me and my partner Seth Levine and went through his vision of how the packaged application market was going to evolve. He had a few key premises, including:
This was a set of PowerPoint slides and a bunch of ideas in Niel’s delightful brain that fit nicely in a theme we loving refer to as “IT Management.” Five years later, his vision is embedded in a rapidly growing company called Newmerix that we are proud to be investors in.
Newmerix recently launched their Newmerix Automate! for Oracle E-Business Suite and Automate!Test for SAP completing the development of the third generation of their products (for those keeping score at home, remember the Microsoft 3.0 cliche – if you don’t know it, hang around and I’ll tell you about it some day.)
Congrats Niel and the entire team at Newmerix. It’s really cool to see a vision like this come together in real products for real customers.