Few founders start a company because they want to sell, market, and promote. As a group, they see a big problem and have a novel idea for solving that they are passionate about. They want to breath life into that thing – the innovative technology, financing model, process or service – that will help solve the big problem. They want to turn a Zero into a One. It’s hard enough to think about how to assemble all the resources together just to do that. Some may even think that the solution they envision will be so cool that it will sell itself. Everyone will see the clear genius, the overwhelming benefits of what they are inventing. The corporate overviews and pitch decks of climate-tech start ups consistently show this logic. Many read something like this – “Climate change is a huge problem. With my solution we can reduce emissions by X. The world will avoid catastrophe and thrive.”
Selling is also not native to most founders. They are often technologists, inventors, creators, organizers. It’s a set of skills and a mindset for creating and taking risks that is envious. Few have the urge to do it. Fewer can do it well. Alas, sell they must. Turning that Zero, that unmet need, into a One, the creation that fills that gap is just the first part. Turning it into a sustaining enterprise that where customers are excited enough in their creation to pay to have it, more and more customers want it and those customers keep coming back for more requires a different type of zeal. Selling is an integral and necessary part of value creation for any company and perhaps even more important for climate-tech companies.
Startups in general and climate-tech startups in particular have the challenge of executing early-stage sales – those initial sales that get the company launched as a “going concern”. Funders love it when the process of getting a product into market seems seamless, organic, low cost and fast. They hope that the sales and onboarding process can be designed into the product or service. Climate-tech companies as a category skew towards providing large technically complex solutions to business and government customers, that don’t lend themselves easily to this. The next great silicone-valley startup giving everyone with a cell phone a new way to virally share their photos, thoughts and memes isn’t going to decarbonize the energy sector, reverse ocean acidification, or stop rainforests from burning. Addressing climate change more than not requires big complex solutions provided to big complex customers. Thus, there are some unique sales challenges that founders must be prepared to lean in to. Here is a quick summary of some of those challenges and frameworks for how to think about them.
Let’s assume like with many or most climate-tech startups the product or service is complex, mission critical and sold to large-scale enterprises for a significant value. For example, an vehicle fleet electrification solution that includes charging systems, vehicles, management software, vehicle telemetry software, power supply and maintenance services for the entire solution. Or, a carbon accounting system to help companies track and report all their ESG metrics required for internal tracking and optimization as well as public reporting. What are the unique challenges here.
Complexity – they require detailed technical explanations and demonstrations
Cost – enterprise solutions usually cost large amounts of money upfront and on an ongoing basis
Criticality – these solutions are often mission critical, where failure results in operational delays and costs for the customer
Duration – very often these products and services have a usable life of 5 years or more.
Specialization – technical requirements for a product or service may vary by customer segment
What does this mean for the selling and onboarding process?
Technical sales = Founder-led sales. In early-stage start-ups usually the founder has the greatest understanding of the product. Customers need a technical understanding of and confidence in the solution that only the founder can provide.
RFPs and Proposals. Complex solutions, especially in competitive markets can require detailed responses to specific customers requirements and detailed evaluation of specifications required by the customer
Multiple Stakeholders. You aren’t selling to one person. Complex mission critical solutions for large enterprises will involve numerous stakeholders, some of them will be directly engaged and others you may never know
Pilots and Proof of Concepts. If it’s new and it’s mission critical, many organizations will want to do a pilot or a proof of concept before they commit to a full implementation. Beyond that they may continue to rollout the solution in a series of phases.
Customer Success and Upsell/Renewal. For many mature enterprise solutions companies, a large proportion of their sales come from existing customers. And, happy customers are your most efficient source of new business through referrals, word of mouth, references
In short, your sales cycles are going to be longer, involve more back and forth, requirement flexibility and stronger relationships. As the chart below shows below, there is a continuum of customer relationships one can have. As the value of the product increase, it becomes more complex and mission critical, and as the term of service lengthens, the relationships needed move to the right.
The sales process may be long and iterative. A typical buyer journey might look like the diagram below, but imagine this with multiple stakeholders, changing requirements, budgets.
Given limited resources and the time and energy an enterprise sales process can take, climate-tech startups will likely need to target their initial market niche narrowly and qualify potential customers carefully. Your goal at this stage is not to sell to the entire world. Each lead and opportunity may require a great deal of nurturing to become a customer.
Staying the Course and When to Change Course
It’s also very common for the sales process to kick up all sorts of new product requirements, especially when you are interacting with a broad array of potential customers. Staying close to your strategy, trusting your market research and the product you’ve built is important. Qualifying prospects against what you have to offer is important. New requirements will inevitably come up, but rationalizing those into your product roadmap is important to stay on track.
In short, climate-tech sales is uniquely challenging. It puts a special burden on startups with limited resources hoping for the quickest path to market. In the early stages of a company’s journey, founders necessarily bare much of this burden. In a future post, I’ll provide a check-list of tactics to get founder-led sales moving right.