The Sales Playbook for Founders | Startup School

At YC, we work with a ton of founders who are navigating the B2B sales process for the very first time. And I often notice some very common and easily avoidable mistakes that I want to talk about today. So I'm going to describe the typical progression that a B2B founder goes through, normally starting with something like a really poorly defined, an overly long unpaid design partnership, all the way through to the like the Pro Move, which is a rapid, well defined, tightly run sales process that results in contractually recurring revenue straight off the bat. In other words, I'm going to talk about how to close your first B2B contracts. So in general, the goal for most early stage companies is to progress through this sequence as rapidly as possible, so that you're able to close new ARR every week and grow your company. And really 90% of the time, the vast, vast majority of the time, founders get stuck in the very early stages. It's the very long, unpaid design partnerships. And my job is encouraging them to advance to the next level as quickly as possible. Occasionally though, really only 5% or 10% of the time, founders will try and speed run the entire process and leap right to the end, before their product is mature enough or without enough social proof, i.e. other happy customers who will vouch for you. That's pretty rare though, honestly. Most founders are too slow to progress through these stages. So, let's try to lay out the different stages and talk through them. The first is the design partnership we've talked about. Maybe you're very early in your company journey, perhaps you've got some Figma mock-ups or really just an idea, barely any code written at all. Or perhaps you're selling into an industry like law or accounting, where there's a ton of domain knowledge, and maybe you don't have that knowledge yet.
So founders at this stage will often pitch what's sometimes called a design partnership. They'll spend a bunch of time with a customer, often a customer with a big fancy logo, in their office, observing how they work, and co-designing this product alongside the customer to meet their needs. It sounds really good in theory. The issue is that these design partnerships are often way too long, three months, six months, and they're poorly defined in scope, and suffer from really low engagement from the customer as a result. Since the customer isn't paying for your time, and frankly, they've got their own business to run, they just don't spend that much time with you co-designing the product. The entire engagement is all kind of, I don't know, like vague and meandering. You've got this fancy logo on your website as a design partner, which feels like progress to you and you're pretty proud of it, and so you don't want to remove it from your website, but really you're not getting any closer to real revenue with this customer. It is extremely valuable to be able to sit next to a customer in their office and observe their work, sit next to their keyboard and see what they're doing for a few days. When doing so, I generally suggest founders try to identify narrow pieces of work that they can automate. Maybe you ask a customer something like, what's the part of your job you hate the most? Or if you could wave a magic wand, what part of your work would you get rid of? You can even offer to do the work yourself manually for the customer, so that you really understand what's involved. We've seen some of the best founders even go undercover and get qualified to work as an auditor or a real estate agent or an accountant, and actually go and do the work, get a job for a couple of months, so they deeply understand the problem and the domain space. Really, the goal of all of this is to identify a really narrow burning problem, and you'd be able to go away and build a narrow wedge product in as little as 48 hours, and bring it back to the customer and ask them to try it, see if it solves their problem. I'd keep iterating over different problem and solution sets until you find an initial wedge product that they absolutely love. If they are happy to pay you and use your wedge product, I then actually wouldn't build more stuff. I try and take that wedge product and try and sell it to another 10 similar customers. What many founders do, which is a mistake, is to try and over build a really broad platform, which is a mistake at this stage of your company because you just don't have the resources. You can waste a lot of time without any real signal that customer wants what you're building. Founders often justify this as trying to reach feature parity with the existing software, which because you're such a small startup is very difficult. Instead, I just focus on doing one part of that solution really well, like really focusing on a narrow wedge. The problem with building something very broad is that rather than telling you, look, this sucks, I wouldn't use it. The design partner instead tries to be helpful. And maybe they imagine just one more feature that they might want that might make it valuable. Really, they just don't want to hurt your feelings by saying, no, this sucks. I've also seen customers treat founders in a design partnership as like an unpaid dev shop. The customer gives the founders an extremely detailed list of software requirements that's only really relevant to their business, and the list keeps growing. The founders understandably want to make their first customer really, really happy, but they're too meek to ask for money. So they do all this bespoke work for free, and it ends up kind of seeming like an abusive relationship. I'm not saying that all design partnerships are a waste of time, just most of them. Generally speaking, more and more features are not the answer.