Archive for January, 2007

Tips for Hiring (and Firing) a Sales Person

Written by Sean Murphy. Posted in Events, Rules of Thumb, skmurphy

I had the good fortune to attend the SVASE CXO Forum Dec-6-06 where Peter Bakonyvari, Vice President of Sales at JPMorgan SymPro, explored some of the practical realities in building a sales team.

Bakonyvari’s made the point that the first 90 days were critical for determining whether a new sales hire was successful. It is important to set realistic  expectations, put them in writing, and focus on shared success metrics that are easy to measure and agreed to by the salesperson. He offered the following timeline as a basis for getting up to speed on a complex product:

  • 30 days: learn product and be able to communicate value
  • 60 days: start calling and get in front of prospects, start pipeline
  • 90 days: should have prospects who are developing

He shared that he was able to hire successfully about 50% of the time and that is was important to cut losses (“take no prisoners”) and not accept excuses after 90 days.

James Connor, who runs the SVASE CXO forum, offered three simple tests that any sales candidate should be able to pass before being hired.

  • Show me a spreadsheet that demonstrates the ROI for a product.
  • Write me a short article on something you know about.
  • Call me and speak on the telephone.

If the candidate doesn’t have some facility with Excel, writing ability, and good telephone skills, then you should think very hard about extending an offer.

Some comments from the audience included

  • Be careful of a VP of sales from a large company as your first hire
    if you want someone who will “get out there.” You’ve hired a general
    when you need a soldier.
  • Understand when you need a business development person instead a sales person. A sales person needs a stable product with a proven sales process and works with a quota. Business development creates new opportunities and is measured on the markets that are identified that can be exploited.
  • Some sales hires will just work for base as long as you let them.
  • The marketeer makes the phone ring then sales guy answers it
  • It can be useful on a larger team to have someone who can cold call and generate leads
  • Expect to spend more than $100K in base for an enterprise sales person, don’t expect to find anyone worth hiring who will work on 100% commission.

Iterating Towards Bethlehem: Michael Sippey at SVPMA 8/2/2006

Written by Sean Murphy. Posted in Events, Quotes, skmurphy, TwoWeekSaaS

Michael Sippey’s original title for his August 2, 2006 talk at SVPMA was “Iterating Towards Bethlehem” was changed to a less cryptic Making the Shift From Being a Packaged Software Person to Being a Hosted Services Person. The original title was a riff on Yeats’ Slouching Towards Bethlehem (not the Joan Didion book or the Angel episode).

The talk was outstanding.

He started with a laundry list of everything that needs to be produced and packaged to ship software:

Disks. Disk labels. Disk sleeves. Manual. Manual addendum. Installation guide. Welcome letter. Invoice receipt. Box. Shipping box. Shipping label.

The software development cycle was

define > design > build > test > release
<---- Elapsed Time 12 - 24 months --->

Michael’s job was market validation

  • Is the market real?
  • How big is the market?
  • Does the product fit the market?
  • What are the sales costs?

How we did it.

  • Find 30 prospects. Set up meetings.
  • Demo your idea / alpha / beta / product.
  • Ask questions. (Lots of questions.)
  • Take copious notes. Score your results.

Critical questions.

  • Do you have this problem?
  • Does this solve your problem?
  • How much would you pay for this?
  • Base hit or home run?
  • How would you spend $100 of our money?

By going on-site and talking to prospects, they always learned new things. Sometimes, very new things. In one situation they abandoned the product they were working on to develop a second one based on the jumble of notes and post-its they kept seeing at trader’s desks they switched focus and developed a trade order management system called Moxy.

For his next act he raised a lot of money during the bubble to build a next generation jukebox and learned the difference between end user and economic buyer. It’s not enough to have cool features for the end user, you have to satisfy the bar owner who is going to agree to situate the jukebox in his facility.

He then touched on the TypePad‘s “Big Bangfailure over the July 4th weekend of 2005 when they tried to upgrade to version 1.6 of the service:

“Let’s change how users design their blogs. And how they’re rendered. And how users manage their communities. And most of the app’s JavaScript. I mean, hey! If it’s this big already, what’s one more thing? We get more bang out of QA, right?”

What went wrong that weekend scarred everyone involved (“Dude, you just had to be there”).

His talk included an excerpt from Yeat’s Second Coming

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

That he put early in the presentation but is probably more accurately a reflection of his state of mind after the 1.6 debacle. The failure to successfully execute a successful release (and more importantly foster user adoption) of 1.6 triggered a series of iterations that evolved “Let’s build a product” into “Let’s iterate a service.” SixApart determined that the right periodicity was a release every two weeks. This means that three key processes must proceed in parallel:

  • Define and Design
  • Build and Test
  • Release.

The keys to making it work include keeping the roadmap and schedule on a wiki, using lightweight specifications and FogBugz, and staying committed to gradual improvements over time.

Sippey proposed the following key takeaways

  1. If you can’t get 30 meetings…you don’t have a product.
  2. Nothing’s better than seeing a user in context.
    (My GOD, that’s how they use our product?)
  3. End users aren’t the only ones that matter.
    (Can’t ignore the other actors in the value chain.)
  4. Prove it with a prototype.
    Especially when you’re breaking new ground.

This concept of a making the transition from a software product to a service (or Software as a Service — SaaS) that’s on a two week release cycle will be a theme for this blog: we will explore in more detail why it brings significant business advantages and requires just as significant a set of changes in a startups development process.

SaaS Roundtable: Managing Rapid Release Cycles

Written by Theresa Shafer. Posted in Events

Gone are the days of annual release cycle. For many companies, weekly releases are the new standard. Picking the best software release cycle impacts your customers, team, and management. At this roundtable discussion we will exchange tips and gotchas. Provide a look at the impact on business models, teams and product development.

Tuesday October 30 2007, 11:30 – 1:00 pm
Fenwick & West 801 California Street Mountain View, California 94041
Cost for lunch: $20 After Oct. 24 $30

Register071030

About the Roundtable Leaders

Anthony Scampavia
At SKMurphy, he provides consulting for Software Startups focusing on Early Customer, Early Revenue

  • Reviewing and defining product release and test strategies
  • Developing test and development sandbox environments focusing on automated regressions and system level testing

Prior to SKMurphy, Anthony was a Director at Cisco Systems. He managed the growth from 1 test engineer to a division of 280 employees in multiple sites, and 20,000 sq ft of test labs. Anthony holds a BA in Computer Science from University of California at San Diego.

Sean Murphy
Sean Murphy has taken an entrepreneurial approach to life since he could drive. He has served as an advisor to dozens of startups, helping them explore new options and bring their businesses to new levels. His firm, SKMurphy, Inc., focuses on early customers and early revenue for software startups, helping engineers to understand business development.

Prior to SKMurphy, Sean worked in a variety of areas including software engineering, engineering management, application engineering, business development, product marketing and customer support. His clients include Cisco Systems, 3Com, AMD, MMC Networks, Escalade and VLSI Technology. Sean holds a BS in Mathematical Sciences and an MS in Engineering-Economic Systems from Stanford University.

SKMurphy: Getting More Customers Workshop

Written by Theresa Shafer. Posted in Events

Finding More Customers

Every business owner asks “How do I Find More Customers? How can I get the phone to ring?” Is your New Year’s Resolution to develop a plan to grow your business? Now is the time to get started.

SKMurphy offers a three hour Getting More Customers workshop where you develop a one-page ACTION plan and we provide follow-up to hold you accountable. We are not promising a fast and easy way to obtain customers. Our methodology of setting goals, developing plans, and exploring options will help you build a framework to maximize your resources as a start up. If you are a software startup or consultant, these workshop allow you to focus on building your business.

June 2006 SDForum Interview

Written by Sean Murphy. Posted in Books, Quotes, skmurphy

I was interviewed in June 2006 by Barbara Cass, Volunteer Director for the SDForum, the final text appeared in the July/August 2006 newsletter (see page 15 of the PDF version). I have updated it here to add links for many of the referenced works and the quotes. KV Rao and I did a one year term as co-chairs of the Marketing Special Interest Group (SIG), our term ended in December 2006. Filomena U and Ed Buckingham took over, and are now the ones answering the sdforum_marketingsig-owner@yahoogroups.com alias.

Volunteer Spotlight
Interview with Sean Murphy, Co-Chair of the Marketing SIG

Q: Sean, you are a long-time member of SDForum. What helped you to decide to volunteer as chair of the Marketing SIG?

I had attended a number of the programs over the years and found them useful not only for the information that the speaker offered but also for what I would learn from other attendees. SIG meetings are a good way to keep a finger on the pulse of Silicon Valley. William Gibson observed that “the future is already here, it’s just unevenly distributed,” The SDForum SIGs are one place that’s certainly true. And I wanted to show my support for what the SDForum offers.

Q: What has been your experience in organizing these meetings thus far?

I am fortunate to have KV Rao as a co-chair. He is bright, articulate, and deeply thoughtful. He was early at WebEx in marketing and business development and has an appreciation for both startup and established company marketing issues. He has pulled together our two best programs so far: the “DotCom to DotBust to Web 2.0” talk by Dave Thompson that was our January kickoff and our May panel on “Making The Leap From An Application To A Platform Business.”

I have enjoyed pulling together an eclectic mix of topics: “Guerrilla Marketing for Startups“, “Internal Marketing–Fostering Technology Adoption“, “Building Strategy and Driving Consensus through Shared Mapping“, and “You Named it What?” We have attracted a diverse and thoughtful audience. Bill Grosso, who runs the Emerging Technologies SIG has been an invaluable advisor to me to get this year’s programs off to a running start.

Q: What have you learned from the first six months of putting on programs?

I think we have run informative programs on a broad range of topics, often because the audience has contributed as much as the speaker or speakers have. It’s very important to get a good title and to explain early in the description the speaker’s key experiences that will equip them address the topic as an expert. We are the Marketing SIG for the Software Development Forum so we tend to get a very technical audience: the key to successful programs is adequately preparing the speakers.

Q: What is the focus of your own business and have you seen value to your business since meeting with this group each month?

Our firm offers business development consulting to early stage software startups with a focus on early customers and early revenue. I think the value for me is the insights I get from the people I have met, either because I invited them to speak, or they were attracted to the topic for that night’s program. The SIG has given me a good reason to reach out to some individuals and have conversations that I otherwise might have missed out on. I would encourage folks to get involved, but I believe that it’s more about creating a community that we would all like to live in, and listening to and learning from strangers.

Q: Have you seen changes in the ways companies market or should be marketing their products in today’s world?

My firm’s focus is on strategy and business development for software startups. We work with early stage startups who sell to businesses. I personally have an interest in new technologies for collaboration–things like wikis, blogs, IM that are “new” in the sense that they are only a little over a decade old–and knowledge management methodologies like the “community of practice” model. So I look at the marketing issues from perspective that’s distinct from the consumer-oriented “get big fast” model that seems to be coming back into vogue: 2006 feels a lot like 1996 to me, with all of the various “pitch events” that are going on every month now. And I tend to work with teams that are bootstrapping both because it’s a mindset I find easier to relate to–I prefer pitching to prospects rather than VC’s–and because they tend to be more innovative than the VC-backed folks, who are normally channeled into a handful of predictable trajectories.

So, what I tend to see are startup teams who have a firm grasp on technology and product development issues but are less clear on one or more of the key concepts for successful new product introduction. Bill Davidow’s “whole product” paradigm from his “Marketing High Technology” book is fundamental to understanding the different between selling an invention and marketing an innovation. Geoffrey Moore’sCrossing the Chasm” framework, best expressed in his “Inside the Tornado” book is the solid explanation of the evolution of technology markets. Clayton Christensen’s “sustaining vs. disruptive innovation” model in his “Innovator’s Dilemma” book is the best “anatomy lesson for a karate student,” explaining to startups how and where to attack an established firm. Steve Blank’s “Four Steps to the Epiphany” is filled with detailed checklists for how a startup team must distinguish between product development and customer development as they explore a new market.

Postscript: I think answering this question started me down the path to the December 2006 Marketing SIG Program: Twelve Business Books in One Hour for the Busy CEO. I wish I could claim “anatomy lecture for the karate student” as mine but it’s based on a line from Chapter 18 of Red Dragon by Thomas Harris: “The others listened like karate students at an anatomy lecture.”

Q: What are some of your aspirations for the Marketing SIG in the near future?

We want to continue to fulfill our promise to provide practical tips and techniques for anticipating, identifying, and satisfying customers needs for emerging technologies profitably. We have several exciting programs in the hopper for the second half of 2006 but are always looking for good speakers on interesting topics. Contact us at sdforum_marketingsig-owner@yahoogroups.com with suggestions or to volunteer.

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