Cutco Knives and startups everyone in a startup needs to learn how to sell

When I worked for Cutco Knives one summer in college selling the world’s finest cutlery, my dream was to sell the Homemaker +8 at every meeting.  It was the Rolls Royce of knife sets and in every sales call I had, I always tried to flog the deluxe set.  Of course, more often than not, I left with selling a spatula spreader or much smaller set.  Many a memory was brought back yesterday as my wife and I went through a sales pitch for Cutco knives from an enterprising college student.  His pitch was great…and entertaining…and the same from 20+ years ago – cut the penny with the scissors, cut some rope, lay out the catalog, and even the close.  Would you like the Homemaker +8 or the Homemaker +4?

How about the Essentials +5 or the Essentials.  As I sat in on the sales call, what I remember most about selling knives was that it was a tough and lonely job and my friends teased me the whole summer about being little more than a “door-to-door” salesman flogging kitchen utensils.  Looking back on that experience, I recognize that I learned so many valuable skills about selling and more importantly about myself in terms of constantly being rejected but still having the optimism and fight to move on to the next opportunity.  I am sure by now you are thinking, what does selling knives have to do with startups?I strongly believe that every entrepreneur should take a sales job at one point in their life, even for a summer.  Whether you are a tech guy or product guy or executive, you have to remember that you are always selling – not just to the external world like customers and VCs and partners but also internally as well, drumming up support, getting the team to buy into your ideas, and much more.  I believe there is sometimes a stigma for being a sales person but in reality no business can ever succeed without someone selling your product or service.

Selling Cutco Knives was great because I went through sales training which at the time seemed incredibly cheesy, became enamored with trying to win salesperson of the week and month, and learned how to use referral based lead generation to create sales appointments.  I learned about creating a great script to use on the initial sales call (great understanding for understanding the life of an inside sales rep), how to use a presumptive close (can we meet this Wednesday at 3 or 5), how to properly make a sales call, how to read my potential customer, and ultimately how to manage my own personal sales pipeline and funnel.  From that experience I went on to start my own window washing business and develop a deep appreciation for sales reps and how hard their job really is.  And I find myself selling every single day in my life as a venture capitalist – selling to potential investors, selling my value add to startups, selling to portfolio company CEOs on why they might try another way to accomplish a certain goal, and selling my own partner on why we should or shouldn’t do a certain deal.  If you are wondering what happened at the end of our sales call, my wife and I ended up buying the lovely Homemaker +8 and gave our rep a boatload of referrals.

Startups and Intellectual Property (IP)

Lately questions about Intellectual Property or IP have been cropping up left and right.  Eliot Durbin (my partner at BOLDstart Ventures) and I had a long discussion this morning in preparation for his panel today about IP and patents.  Last week, we met with a company and when we asked about their core IP, they launched into a 5 minute discussion about the various patents they filed.  Do startups really think patents are going to make or break their business?  Yes, having core tech or IP matters but patents are a different question altogether.  Your best protection is continuing to focus on building your business, your product, and getting market share.  So what is my and BOLDstart’s stance on IP and startups.

1. We look at the team and the product and market first

2. We like to think that all of our investments have IP.

3. IP does not mean patent.  IP in our mind is your “secret sauce” for doing what you do better, cheaper, and faster than anyone else. Its great if you filed for a patent but that is a long process taking 18-24 months and by the time you get a patent the market opportunity may have already passed you.  Focus on building your product and market share, not on patents.  That is your best protection and competitive advantage.  Waiting for the patent office to tell you that you have a patent is a nice to have, not a must have.

4. Even if you have a patent, it takes tons of time and shitloads of dollars to defend.  Trust me, I’ve been there, and it seems to me that the only person making money in these cases are lawyers.  In addition when defending patents you will inevitably fight with the big boys with billion dollar balance sheets so that is not a place to spend your time and money.

5. Don’t start a company where there is already a patent battle brewing like email on phones.  We are looking for innovations, the next big thing, not yesterday’s way of doing it.

Hopefully that gives you a good perspective on our view on IP, patents, and startups.

Never give up but move on quickly startups are tough, you always have to keep fighting

As a young kid, I was always taught the valuable lesson of never giving up or quitting.  No matter how many times you get knocked down, you have to stand up and keep moving.  That is the same trait that I also admire in many of the entrepreneurs that I have funded over the years.  This mentality is what carries many great entrepreneurs from near death experiences to ultimate success.  However, I do caution that entrepreneurs should temper this “never give up” attitude with a “move on quickly” one as well.

Let me explain.  Many entrepreneurs will take this same “never give up” attitude with the sales process or raising financing.  On the one hand this attitude is what is absolutely necessary to get things done but on the other hand it can be quite detrimental.  What entrepreneurs need to do is learn how to qualify their leads and to do it quickly.  The worst outcome for an entrepreneur i to spend countless cycles on trying to close a deal that is not closable or spending way to much time on a lead only to end up giving away the farm to make it happen.  Never giving up may actually prevent you from finding the next great customer or funder.  I have seen this time and time again from many companies and what is problematic is that time is precious for a startup.  You only have so much time to hit your milestones so use it wisely.  When you are meeting with potential prospects make sure to qualify them in  the first meeting and understand if they really do have a need for what you are selling, the decision making process, the timeframe in which a decision is made, and ultimately the potential budget.  If the information does not meet your needs, move on quickly.  You can take your “never give up” attitude by trying to qualify as many prospects as possible rather than “never giving up” on one or two.