Upshift @ Hustle Con - Lessons Learned From Bootstrapping Sales From 0-25mm
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Upshift @ Hustle Con - Lessons Learned From Bootstrapping Sales From 0-25mm
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Upshift @ Hustle Con - Lessons Learned From Bootstrapping Sales From 0-25mm
Editor's Notes
- My name is gabe luna ostaseski, I’m the founder of upshift partners and we help startups scale sales
- Like many of you I’m an entrepreneur and I’m here to share with you how I hustled my last company to a multimillion dollar success without a penny of outside funding To say that my journey here is unique is a huge understatement I didn’t go to an ivy league school, in fact…in fact I dropped out of college. I didn’t get funded by a VC…instead I bootstrapped my way on credit cards and home equity lines
- Growing up I didn’t have many examples of what it meant to be an entrepreneur….I grew up on a hippy commune.…we had no electricity, internet, or televisions and the only entrepreneurs I knew were in let’s just say…..“farmers” 8 years ago……. I started tech company in silicon valley without an email address or computer and bootstrapped it to over 20m If I can do it…anyone can.
- Today, I would like to share three powerful lessons that I learned the hard way in the hopes that you don’t have to make all the same mistakes that I did. The power of focus The system is the hero and let data drive decisions
- All of these lessons and takeaways are available at upshiftpartners.com/dispatch so you can put your pens and computers and phones, write down that one url so you can focus on listening.
- Example: We were running a marketplace for local services and had grown to about 3 million in sales but we were stuck. Like many of you we were incredibly ambitious and wanted to continue growing as fast as we could…our goal was doubling revenue each year. I remember sitting down late one night after a long day to look at what we would have to accomplish in order to actually double the revenue of the company and feeling deflated. At the time we were still struggling to hire the right sales people that would perform consistently so it required hiring almost 3 people to have one person become a top performer. Running the numbers I saw that in order to accomplish our goals we were going to have to grow our sales team by 3x…I knew in my gut that there had to be a better way. I think curiosity and a bit of what i call being productively lazy made me think…there’s got to be some easier way to do this. I started digging through our customer list and saw two of the companies in our top 10 were spending almost 10x what the average customer was spending. This caught my attention….Then I hired a researcher on Elance to research both the top and the bottom companies to find other attributes on them like how many counties they covered, how long their website had been up, and what our entry point had been into the account…when it got the spreadsheet back I sat down with some beers and started to examine it. What I found were a few key attributes of these customers that were spending 10x our normal customers. I then built a list of 100 more companies that matched this same criteria. After building the list I designed a coordinated campaign to hit these 100 companies from all sides, phone calls, emails and cleaver little gifts sent in the mail. Then I started sending out the mail pieces each week to these 100 people and ensuring that each of them got a follow up phone call. To my surprise…absolutely nothing happened for 4 weeks of mailing, calling and emailing…I as even beginning to doubt myself. then it happened…my phone rang and it was the CEO of a multi billion dollar company. he said…"ok, you’ve got my attention, how can you help me?” The next week I got another call and another the week after…4 months later we had signed up over 2 million in contracts and after tallying up the spend it cost us around $2000 and we didn’t have to hire a single sales person. What I learned in this experience is not only the power of hustle but also the incredible power of focusing on doing less…If we were flush with VC cash the odds are that we would haven’t been as creative and potentially just pushed our foot on the gas
- If you’re just starting pick a market with the most urgent, pervasive and costly problem that you can solve If your already running, take a step back to take a huge step forward by analyzing the attributes of your top 10 and bottom 10 customers then look for 100 more that match the criteria of your top 10 and pursue them with all that you’ve got.
- When I was in college I got an internship where I got to start and run my own house paining company over a summer. I learned a lot of things but two that I remember were how to hustle, and the power of having a good system in place. I’ve never forgotten these two things and have taken them with me in every company I’ve started and every company that I advise and invest in. When we came up with the concept for our last company and wanted to start a marketplace that connected homeowners with local service professionals we didn’t know how to build a website, software or even use spreadsheets. In order to test the business we wrote down scripts on binder paper and took 4 yellow not pads and 4 pens then went around to houses asking people if they would want to get free quotes on projects…to our surprise when we met back up at starbucks at the end of the day we had collected 10 leads. The next day wrote another script for service professionals, then looked in the yellow pages and started calling the contractors with the biggest ads to see if they would be willing to pay to get connected to the homeowners we collected. We set 3 appointments for the following day. During our meetings we pitched them the idea and asked them how much they would be willing to pay for names and phone numbers of people that would want work done…the first one said $80, we literally made a photo copy of the yellow piece of paper and sold it to them on the spot. The we took the money, refined the script and hired college kids from the local campus to knock on doors for us the next weekend and collected 30 leads.. We repeated this process, refining the scripts and process each for months on end then followed this same process of documenting the system, testing it and iterating on it every single week. Over the years this helped us to go from 0-50 sales people and run a highly organized company with a relatively small staff.
- Takeaway: Your playbook is one of the most important things you will create as a startup Document everything that you do more than twice Review weekly to start then start reviewing monthly
- Example: When we had a 50 person sales team and were closing 4x the number of deals that we were before…I can remember looking at the numbers from the past 6 months and seeing that we had lost over 1 million dollars ramping up the team and deal volume had increased sharply but we hadn’t seen any boost in profits and infactchurn had increased which meant that our lifetime value of a customer was cut in half We were in one of the most challenging spots that we had ever been in. We were on a very rough rood and one that called for a serious correction. Again, we dug into the numbers looking at churn by rep, average deal size and customer happieness. We found 6 sales people that were profitable and in order to save the business from going under we made one of the most challenging decisions we could make…letting go of 42 sales people and going back to the drawing board. Although it was one of the most challenging decisions I’ve ever made it was also one of the most fruitful…After our layoffs we focused intensly on the specific measurable things that made these 6 sales people so successful. We looked at everything and approached it like a science. What we found were some very interesting similarities in terms of where they came from, the approach they took and the specific customer segments they were going after. We then emulated everything they were doing and cut out a lot of what “thought” made for a successful sales person, instead only focusing on the what the data told us. Over the next 12 months we grew revenue by over 50% with a team of 6.
- Happy to answer questions about my own experience building my own companies as well as what I’ve learned in helping to ramp up 7 other startups in the last year through our sales accelerator, Upshift.